New Jersey Real Estate Report

From the NYT:

Manhattan Real Estate Finally Bounces Back to Normal

As vaccination levels rise and businesses reopen, residential real estate has finally bounced back to where it was before Covid devastated New York.

In Manhattan this spring, the number of apartments that sold was more than double what it was a year ago, when the city was locked down in the early days of the pandemic, according to a half dozen market reports released Thursday.

Though in many ways the market had no where to go but up — apartment showings were restricted for most of last spring — the surge in closed deals is even strong by historical standards. Not since 2015, a time of a major boom, has there been a three-month period with comparable activity, the reports show.

There was more of a mixed picture in terms of prices, with co-ops and condos trading for an average of $1.9 million and a median of $1.1 million, up slightly from last spring. Brokers say the so-so improvement can be explained by an oversupply of apartments, which has fueled discounts.

But the spike in sales volume seems to have the real estate industry wiping sweat from its troubled brow.

“The way people were looking at the city a year ago, it would now be a dystopian hellscape with nine people left in Manhattan,” said Jonathan Miller, the appraiser who wrote the report for the brokerage Douglas Elliman, referencing early fears that many New Yorkers would decamp permanently to the suburbs or second homes outside the city. “But it seems that cooler heads have prevailed.”

From Bloomberg:

Suburban NYC Housing Frenzy Slows With Buyers Showing Fatigue

Contracts to buy suburban New York homes have scaled back from their frenzied pace at the height of the pandemic.

That doesn’t mean buyers have lost interest in acquiring spacious abodes — they’re just not finding much on the market. And they’re getting tired of fighting off competitors for what little there is.

“Losing your fifth bidding war on a property is discouraging,” said Jonathan Miller, president of appraiser Miller Samuel Inc. “Part of this is consumers being fatigued with the process, and having other options in life these days, like vacations and travel.”

As Covid restrictions ease and more workers start plotting a return to the office, suburban sales are still rising at a clip that would please the owner of any real estate brokerage. But annual increases in signed deals are more measured than they’d been for much of the past year.

In Long Island, contracts to buy single-family homes were up 14% in June from a year earlier, according to a report Friday by Miller Samuel and Douglas Elliman Real Estate. That’s down from May and April, when deals soared 160% from the corresponding months in 2020.

Westchester County saw 20% more contracts last month than in June 2020. But in May, the annual increase was 81%. In Greenwich, Connecticut, June’s 50% jump in contracts was the smallest year-over-year gain in data going back to last July.

“You know what happened? We ran out of inventory,” said Scott Durkin, president of Douglas Elliman.

Updated Vaccination by Age Range for NJ:
6/22 vs 6/30

At Least 1 Dose
Total Pop: 9.2m
Total 1st Doses: 5.4m – 59% of total pop (Up from 58%) – Bloomberg reporting 62.8%

12-15 – 450k population – 162k dosed – 36% 1 Dose (Up from 24%)
16-17 – 240k population – 108k dosed – 45% 1 Dose (Up from 44%)
18-29 – 1.5m population – 756k dosed – 50% 1 Dose (Up from 49%)
30-49 – 2.4m population – 1.57m dosed – 65% 1 Dose (Up from 64%)
50-64 – 2m population – 1.46m dosed – 73% 1 Dose (Up from 72%)
65-79 – 1.1m population – 1.03m dosed – 93% 1 Dose (Up from 91%)
80+ – 415k population – 324k dosed – 78% 1 Dose (Up from 77%)

From the WSJ:

U.S. Home-Price Growth Rose to Record in April

U.S. home prices surged at their fastest pace ever in April as buyers competing for a limited number of homes on the market pushed the booming housing market to new records. 

The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 14.6% in the year that ended in April, up from an 13.3% annual rate the prior month. April marked the highest annual rate of price growth since the index began in 1987.

Home prices have surged this year due to low mortgage-interest rates, which have spurred strong demand, and a continued shortage of homes for sale. Many homes are getting multiple offers and selling above asking price. The home-price surge is widespread around the U.S., affecting buyers and sellers in big cities, suburbs and small towns.

The median existing-home sales price in May rose almost 24% from a year earlier, topping $350,000 for the first time, the National Association of Realtors said earlier this month.

From AllWork:

UK WORKERS WANT TO RETURN TO OFFICES OUTSIDE OF THE CITY

A new survey from Clockwise has found that the majority of Gen Z workers may prefer to work in an office.

This revelation comes as the UK government weighs whether to grant workers the right to work from home permanently. This proposal would prevent employers from forcing staff to return to the office unless it is essential.

However, the survey finds that 30% of respondents miss the socialization of the workplace, while some are having trouble separating their professional and personal lives.

Additionally, 71% stated that the sense of community in an office makes for a more productive workforce.

Although many Gen Z and Millennial workers expressed wanting to return to the office, the survey noted that this does not make their return to cities a necessity. In fact, two-third of Gen Z professionals said they are staying in the suburbs after relocating out of urban areas during the pandemic.

This highlights the importance of companies incorporating regional and suburban hubs so employees who have moved have an office to come into, without a long commute.

In fact, 73% of respondents said they would prefer a local satellite office to prevent lengthy commutes.

From the Star Ledger:

Ad-Rock of Beastie Boys, Kathleen Hanna selling lakefront N.J. home, party boat for $975K

No sleep till … Jersey?

Adam Horovitz, aka Ad-Rock from the Beastie Boys, and riot grrrl singer Kathleen Hanna from the bands Bikini Kill and Le Tigre have put their Upper Greenwood Lake home on the market.

The California Mid-Century Modern home, located on the lake in the Hewitt area of West Milford, was built in 1958.

Horovitz, 54, and Hanna, 52, who have been together since 1996 and married in 2006, bought the three-bedroom home that year. They are selling the house and lake access for $975,000.

The listing for the home boasts “walls of windows” and a private road.

Horovitz was a member of the Beastie Boys with Adam Yauch, aka “MCA,” and Michael Diamond, aka Mike D.

From the Record:

‘A seller’s market’: Here’s where home prices are soaring in NJ even as the pandemic fades

On the hunt for a home last summer, Priscilla Gabela and her husband, Antonio Aluotto, gave up after a month. Bidding wars were everywhere, and the North Arlington couple decided to wait things out, taking a break from September through December. 

When they reentered the market early this year, they were in for sticker shock. If prices were too lofty in 2020, this year they zoomed into the stratosphere. 

“It’s been crazy,” Gabela said. “We’ve seen a lot of houses priced really high.”

Welcome to the post-pandemic North Jersey real estate market, where price appreciation is the brutal reality even with vaccines spreading, interest rates climbing and more homes going on sale. With demand still high, last year’s “COVID premium” isn’t fading away. 

In Bergen County, the median home sale price in Tenafly jumped 16% this May compared with a year earlier. Hackensack’s rose 19%, and Teaneck saw a whopping 33%, according to data from the state realtors’ association and individual agencies. 

Some axioms of North Jersey housing held true: Towns with quaint, walkable downtowns or easy access to NJ Transit fared well — Montclair prices leaped 22%.

But some of the sharpest increases occurred farther to the west, as the trend toward hybrid and online work schedules encouraged buyers to settle farther from New York. Morris County’s median price surged by $100,000, or 23%, in April, the latest month available. Sussex County soared as well, led by Sparta’s 23% increase.  

“Sellers are taking advantage of escalating prices and buyers are feverishly absorbing the inventory — it’s still very much a seller’s market,” said Max Stokes, a real estate associate at Christie’s International Real Estate Northern New Jersey in Ho-Ho-Kus.

From CNN:

The housing market is on fire. The Fed keeps adding gasoline

Bidding wars. All-cash offers. Homes selling for $1 million over asking. The housing boom has officially reached the ridiculous stage.

Despite surging home prices that are rising at the fastest pace on record, the Federal Reserve continues to prop up the housing market by purchasing $40 billion of mortgage bonds each month.

And while the Fed is finally “talking about talking about” removing some of its support, some fear the US central bank is creating another housing bubble as it deliberates.

That’s because the Fed’s emergency strategy is artificially lowering the cost of mortgages, and further boosting prices that already looked stretched in many markets.

“The Fed just continues to pour more gasoline on that fire,” said Peter Boockvar, chief investment officer at Bleakley Advisory Group.

Of course, the central bank certainly deserves credit for its historic efforts to prevent the Covid recession from morphing into an all-out depression.

…

“House prices are exploding right now. Everything in the housing sector is going up in price,” Jason Furman, a former top economic adviser in the Obama administration, told CNN’s Poppy Harlow. “It probably isn’t the case that the Fed should be continuing to artificially hold mortgage rates down.”

Danielle DiMartino Booth, a former Fed official, agreed that the most obvious starting point for the Fed to begin to remove stimulus is on the mortgage front. “Ultra-low mortgage rates have helped feed a frenzy in housing,” said Booth, who is now CEO and chief strategist at Quill Intelligence.

From NJ101.5:

NJ adds 13,600 jobs in May – but still down 314,000 in pandemic

New Jersey’s economy added 13,600 jobs in May but still hasn’t recovered 44% of the jobs that disappeared last March and April when pandemic-related shutdowns were imposed.

Last March and April, the number of jobs in New Jersey plunged by 717,200, nearly 17%. It has gained jobs every month since then except one, adding 403,000 positions in total – but still remaining 314,200 short of the pre-pandemic peak.

At the rate jobs have been added so far in 2021, it would take until the end of 2023 for the economy to recover its pandemic losses.

But next month’s report could look different. The state Department of Labor and Workforce Development noted that the survey took place before pandemic-related restrictions on New Jersey businesses were lifted in late May, so any impact on jobs would become evident next report, issued July 15.

Leisure and hospitality businesses added 6,200 jobs, followed by 3,000 more trade, transportation and utilities jobs and 2,500 more jobs in education and health services. Seven of nine sectors gained jobs, but losses were recorded in construction of 2,200 and financial activities of 400.

Updated Vaccination by Age Range for NJ:
6/8 vs 6/14

At Least 1 Dose
Total Pop: 9.2m 
Total 1st Doses: 5.1m – 55% of total pop (Up from 54%) – Bloomberg reporting 62.6%

12-15 – 450k population – 102k dosed – 23% 1 Dose (Up from 22%)
16-17 – 240k population – 102k dosed – 43% 1 Dose (Up from 42%)
18-29 – 1.5m population – 714k dosed – 48% 1 Dose (Up from 43%)
30-49 – 2.4m population – 1.48m dosed – 62% 1 Dose (Up from 60%)
50-64 – 2m population – 1.43m dosed – 72% 1 Dose (Up from 70%)
65-79 – 1.1m population – 1.0m dosed – 91% 1 Dose (Flat at 91%) 
80+ – 415k population – 306k dosed – 73% 1 Dose (Down from 77%) – Rounding issues?

From NorthJersey.com:

As NJ inches toward vaccination goal, don’t expect COVID-19 to disappear, experts say

A day before New Jersey launched its COVID-19 vaccination campaign in December, Gov. Phil Murphy drew an epidemiologic line in the sand.

He announced that at least 70% of adults, or about 4.7 million residents, would need to be fully vaccinated for the state to reach herd immunity — the nirvana of infection control in which a virus can no longer find enough hosts and fades away.

Seven months later, New Jersey is still inching toward that goal — more than 4.5 million were fully vaccinated as of Sunday — but the consensus now among many health experts is that herd immunity is unlikely in the foreseeable future.

Vaccine hesitancy among a significant portion of the population, the ability of the virus to mutate into more contagious variants and vaccine distribution problems across the globe are among the many reasons why the threshold for herd immunity may be much greater than the initial 70% goals set in New Jersey and the U.S.

“I think we’ve come to reckon that COVID will be around a lot longer, which means we’ll have to devise strategies to manage it,” said Jason Diaz, a professor of virology and molecular biology at LaSalle University in Philadelphia.

From News 12:

NJ has billions of extra revenue; Republicans accuse Murphy administration of keeping them in the dark

After years of scrounging for funding at budget time, New Jersey lawmakers say that the state now has more money than they know what to do with. And with just three weeks go to before the state budget deadline, Republicans say that the Murphy administration is cutting them out of choices on how to use the $4 billion tax windfall.

“It’s unprecedented. The whole time I’ve been here, we’ve been dealing with shortfalls,” says Republican state Sen. Declan O’Scanlon.

Since Gov. Phil Murphy’s budget message in February, the state has found itself with an extra $4 billion than it planned for, as the economy roars back from the pandemic.

“We have a lot more money than we anticipated and it’s time to give it back to the taxpayers,” says Republican state Sen. Sam Thompson.Republicans on Thursday demanded the Murphy administration include them in talks about where the money should go before the final budget is signed on June 30.

“We’ve been essentially shut out, left in the dark,” says Republican state Sen. Mike Testa.

Updated Vaccination by Age Range for NJ:
5/13 vs 6/8

At Least 1 Dose
Total Pop: 9.2m 
Total 1st Doses: 5m – 54% of total pop (Up from 49%) – Bloomberg reporting 61.5%

12-15 – 450k population – 100k dosed – 22% 1 Dose (Up from 0%)
16-17 – 240k population – 100k dosed – 42% 1 Dose (Up from 19%)
18-29 – 1.5m population – 650k dosed – 43% 1 Dose (Up from 33%)
30-49 – 2.4m population – 1.45m dosed – 60% 1 Dose (Up from 50%)
50-64 – 2m population – 1.4m dosed – 70% 1 Dose (Up from 65%)
65-79 – 1.1m population – 1.0m dosed – 91% 1 Dose (Flat at 91%) 
80+ – 415k population – 320k dosed – 77% 1 Dose (Down from 87%) – Rounding issues?

From the Star Ledger:

If almost 20% of N.J. adults don’t get vaccinated, will the state achieve herd immunity?

In a Rutgers-Eagleton poll released Thursday, 17% of New Jersey adults said they will not get the COVID vaccine.

Nearly half of all parents polled said they have concerns about the vaccine for their children.

As of Friday morning, about 57% of adults in the state have been fully vaccinated, according to state data. The state has set a goal of having 70% of New Jersey’s 6.9 million adult residents vaccinated by the end of June.

But if 17% of adults say they won’t get inoculated and nearly half of parents aren’t sure, will the state reach herd immunity,which is defined as having a large portion of the population immune to a disease either through vaccination or natural infection?

It’s not a simple question, medical experts said.

…

Stephanie Silvera, an infectious disease expert and professor at Montclair State University, said herd immunity isn’t an on/off switch, but more of a dimmer.

“The higher percentage of the population that is vaccinated, the lower the probability that someone who is infected will come in contact with someone who is vulnerable,” she said.

She said if another 10% of the adult population that isn’t vaccinated decides to get the vaccine, and if more parents have their children vaccinated, that gets us closer to herd immunity.

“The challenge will be making sure that parents feel safe and comfortable getting their children vaccinated and this will likely require outreach and listening to their concerns so that they can be addressed,” she said.

Johri said the poll’s findings about parents — 43% said they will wait to see how the vaccines work out before getting their child inoculated, 4% said they were not sure, and 53% said they will get their child vaccinated right away — is actually heartening, especially when you take into account the margin of error.

From NJ1015:

Most small businesses across NJ and the U.S. continue to struggle to fill job openings

Nearly half of small business owners could not fill job openings last May, according to The National Federation of Independent Business’ monthly jobs report. That is a record high. In fact, May marks the fourth consecutive month of record-high readings for unfilled job openings.

Small business owners are doing everything they can to get workers back on their payrolls. NFIB Chief Economist Bill Dunkelberg says owners are offering higher salaries but in the end, higher labor costs are being passed on to the consumers in higher selling prices.

As the summer tourist season gets under way, there’s a fear that small businesses won’t be able to open at full capacity because there’s just not enough workers.

“Perhaps it’s time for Governor Murphy to offer bonuses for those returning to work instead of the $300 additional unemployment subsidy,” said Eileen Kean, NFIB New Jersey state director.

From CNBC:

Housing boom may be cooling as weekly mortgage demand drops again

High prices and low supply are finally taking some of the heat out of the housing market.

Even with interest rates falling slightly, mortgage application volume fell 4% last week from the previous week, according to the Mortgage Bankers Association’s seasonally adjusted index. It fell to the lowest level since February 2020.

Applications for a mortgage to purchase a home fell 3% for the week and were 2% lower than a year ago. This is the second straight week that purchase demand was lower than a year earlier, even though mortgage rates are still lower.

Pending home sales, which are counted by signed contracts and are therefore an indicator of future closed sales, dropped a wider-than-expected 4.4% in April, according to the National Association of Realtors.

Buyers are clearly starting to hit an affordability wall. This is especially clear from the government loan demand. FHA and VA loans offer low or even no down payment options for borrowers with lower incomes and credit scores.

“Tight housing inventory, obstacles to a faster rate of new construction, and rapidly rising home prices continues to hold back purchase activity,” said Joel Kan, an MBA economist. “The government purchase index declined to its lowest level in over a year and has now decreased year over year for five straight weeks.”