New Jersey Real Estate Report

From Politico:

How Covid-19 made New Jersey’s Phil Murphy the most powerful governor in America

New Jersey endows its governors with the most executive power in the nation. Chris Christie knew it and used that broad authority to become a hero of the Republican Party — a state-level strongman who forced Democrats to do his will or face his wrath.

Few thought Phil Murphy, his Democratic successor, would consolidate that power even further. Murphy struggled early on to move his progressive agenda through the solidly Democratic Legislature. Rival factions formed to oppose him. His signature proposal — a new tax on millionaires — was rejected twice.

Now, six months into a global pandemic that’s shattered the state’s economy and killed roughly 16,000 residents, Murphy has become one of the most popular governors in New Jersey history — and discovered just how much say he has over the state and its government.

The question is, how long can it last?

From the Star Ledger:

N.J. was just approved for the new $300 unemployment benefit. But you’ll have to wait to get it.

New Jersey was approved late Friday for an expanded $300unemployment benefit created by President Donald Trump after Congress couldn’t agree on a new stimulus plan.

But that doesn’t mean the payments will reach unemployed residents any time soon.

It took Gov. Phil Murphy several weeks to decide to apply for the benefit, which was announced on Aug. 7. The state didn’t apply until Aug. 26, in part because of confusion over how the program would be implemented.

Because the funding comes from FEMA, federal rules don’t allow the state to use existing unemployment systems or employees to distribute the funds. That means it will take time before the state can process the payments.

Labor Commissioner Robert Asaro-Angelo said the payments probably won’t be distributed until October, and it will probably come as a lump sum rather than as a weekly payment.

We haven’t taken a look at the mobility snapshot in a few weeks. Very interesting trends! Congratulations NJ – Keep Walking!

From Eater:

New Jersey Will Start Indoor Dining on Friday, While NYC Restaurants Still Have No Plan

New Jersey Gov. Phil Murphy has announced that the state’s restaurants will be allowed to resume indoor dining starting on Friday. Similar to NYC, the state was originally supposed to resume indoor dining at the beginning of July, but plans were postponed due to concerns about indoor dining and the spread of COVID-19.

To start, restaurants will be limited to 25 percent indoor capacity and tables have to be spaced at least six feet apart, according to NJ.com. Customers will also be required to wear a mask unless they are eating or have underlying health issues, and they will have to provide a phone number if making a reservation in order to help with contact tracing if necessary. 

Taking a similar approach as NYC restaurateurs, New Jersey restaurants have been campaigning hard to push the governor to announce a plan for the return of indoor dining. On Monday, Gov. Murphy said on Twitterthat “reopening responsibly will help us restore one of our state’s key industries” while continuing to fight COVID-19.

Nearby, NYC restaurants are still without a plan for indoor dining. The news now makes NYC the only part of the tri-state area still banned from indoor dining, as Connecticut and the rest of New York state were allowed to start indoor dining earlier this summer. Philadelphia is set to start indoor dining on September 8.

In a press conference on Monday, New York Gov. Andrew Cuomo said that he is “aware of the competitive disadvantage” that NYC restaurants are at while indoor dining remains off the table in the city. But he’s first watching to see how events like Labor Day and the reopening of schools play out before making a decision, and he’s also monitoring the upcoming flu season. NYC Mayor Bill de Blasio shared similar sentiments last week about waiting to see how things go with the schools reopening before considering a return to indoor dining.

“I want as much economic activity as quickly as possible,” Cuomo said at the press conference. “We also want to make sure the transmission rate stays under control. That is the tension. We’re trying to find the balance, and we’re calibrating every day.”

From the Jersey Journal:

Hudson County real estate market thrives as NYC couples, families, continue migrating for more value

For years, Hudson County real estate has enticed scores of New Yorkers to ditch the Big Apple in favor of more space and lower rents without sacrificing city access.

The coronavirus pandemic seems to be accelerating those migrations.

As New York City real estate suffers amid the pandemic, with vacancy rates spiking and rents falling, Hudson County’s market has continued to flourish, industry professionals say. In recent months it’s proven to be a haven for both renters and prospective buyers who are working from home and looking to spread out.

…

Average rent in Jersey City during April, May and June was up by 0.2% from the same time last year, according to Apartment Guide’s mid-year rent report. Meanwhile, in Manhattan, average rent was down about 6% between July 2020 and July 2019, according to the Douglas Elliman real estate company, signalling less demand for rentals. That difference grew to 10% when landlord concessions were included.

“There’s a certain appeal to not being in Manhattan and saving the money and being near transportation,” said Jonathan Kushner, president of Kushner Real Estate Group. “We’re very definitely seeing some tenants saying, ‘I don’t want to be in Manhattan right now with everything going on … we feel safer here. There’s more space.’”

…

About 40% of renters who move into brand new buildings in Hudson County are relocating from Manhattan, Kushner said, adding that his firm has seen a slight uptick in that percentage during the pandemic.

From the Star Ledger:

Murphy hopes some N.J. indoor dining will reopen before mid-September

With the state’s gyms allowed to reopen with restrictions next Tuesday, Gov. Phil Murphy said he hopes to permit some indoor dining at bars and restaurants by the middle of next month as coronavirus numbers continue to improve.

Murphy was asked Wednesday during his latest coronavirus briefing in Trenton whether rumors are true about a Sept. 14 or 15 target date for the state to allow limited indoor dining.

The governor said he “hadn’t heard” that date but stressed “I hope it’s before then.”

“I hope that we’ve got some indoor dining before then,” Murphy said. “I’m not hanging my hat on it. I’m not trying to make news. That’s not a date I’m using at least.”

But, he said, “if data we look at stays as good as it is, I hope we beat that date.”

The governor also said it’s likely movie theaters will be allowed to reopen in New Jersey at the same time.

“My guess is, if I had to predict now, they will move at the same time, whenever that is,” Murphy said.

6 months…

From ROINJ:

Gov. Murphy, asking for some internet friends: Where is COVID finish line?

I didn’t intend for my tweet to start a Twitter storm. To be honest, I didn’t think it would draw as much attention as my shameless pic of some pretty good-looking fajitas I had whipped up Saturday night.

I was simply responding to a Saturday afternoon tweet by Gov. Phil Murphy — one in which he said the state is “not over the finish line” despite having dropped from 8,013 hospitalizations to 376.

I tweeted: “Not trying to be a wise guy, but is it fair to ask, ‘Where is the finish line?’ This is the frustration I hear from the business community.”

In the next 24 hours, I was bombarded by more than 150 likes, retweets and comments — that’s a lot for me. Clearly, I had struck a nerve. And no one thought I was being a wise guy.

Of course, the internet being the internet, you never what you’re going to get. Or from whom. Here’s what I got.

Some offered an answer, saying Murphy had given a finish line: When there’s a vaccine.

I’m not so sure about that. I’ve listened to all but a handful of his briefings, and that has never come up.

Many — including Pat Rowe, a former councilman from Madison — said the finish line was election day.

From CNBC:

July home sales spike a record 24.7% as prices set a new high

Sales of existing homes soared 24.7% in July from June, according to the National Association of Realtors. 

That’s the strongest monthly gain in the history of the survey, going back to 1968, and the highest sales pace since December 2006.

Sales were 8.7% higher from July 2019. 

The numbers represent closed sales, meaning contracts signed in May and June. 

The increase in sales came as supply fell, prices rose and mortgage rates stayed low.

The supply of existing homes plummeted 21.1% annually, with just 1.5 million homes for sale at the end of July. This represents a 3.1-month supply at the current sales pace, down from a 4.2-month supply a year earlier. It’s the lowest July supply in the history of the inventory survey, which has been tracking single-family supply data since 1982.

“The new listings are running a little higher than one year ago but all those new listings are being grabbed by the buyers and taken off the market,” said Lawrence Yun, chief economist for the Realtors.

That shortage drove the median price of a home sold in July up 8.5% annually to $304,100. This is a record high nominal price but also the highest price when adjusted for inflation. When adjusted, it is 3.4% higher than the bubble high set in 2006, when mortgage lending was loose and borrowers could buy a home with no down payment and little to no financial documentation. 

From ABC News:

NJ restaurant officials call on Gov. Murphy for timeline for indoor dining

The New Jersey Restaurant Association is calling on Governor Phil Murphy to give them a timeline for indoor dining as they try to prepare for cooler weather.

The Bistro at Haddonfield had a full lunch crowd with Tuesday’s mild weather, and even with ample sidewalk seating, there was a wait for a table.

But owners say on the not so nice days, there are big challenges with indoor dining still not allowed in New Jersey.

“It started raining around 7:00 p.m.,” said owner Nick Lavdas, recalling a recent storm. “I had a full house. I didn’t know what to do. I was packing up food.”

On King’s Highway, Villa Rosa Restaurant sits empty after the owners closed over the weekend because of COVID-19 related financial strain. A GoFundMe is now up and running, as management hopes to reopen in another location.

The New Jersey Restaurant and Hospitality Association says with current restrictions in place, more closures are bound to follow.

…

Monday, the association called on Murphy to give an anticipated date for when indoor dining might be allowed again.

“It’s been said to me that going out to eat is a luxury, it’s not important. That’s not what this is about. This is about the 25,000 small business owners in this state and their 350,000 employees,” said Halvorsen.

At P.J. Whelihan’s in Cherry Hill, management worries about the cold winter months, saying it’s especially frustrating when their Pennsylvania restaurants can offer indoor dining at 25% capacity.

“When the weather does start to chill down, we’re going to lose our outdoor dining. So we need to have some sort of a plan. What are we going to do? said Mike Perro, director of New Jersey operations for the PJW Restaurant Group.

From MarketWatch:

Did the expired $600 federal jobless benefit keep people from going back to work?

Did generous unemployment benefits discourage many workers from returning to their jobs? A big drop in people seeking or receiving benefits in the past two weeks after the end of a $600 federal stipend hints the answer might be yes.

Initial jobless claims fell to 963,000 in early August, a decline of almost 500,000 from two weeks earlier. New applications had largely been flat at around 1.5 million a week from June to mid-July.

The number of peopled receving benefits, meanwhile, tumbled by 1.5 million in the last two weeks of July to 15.49 million just as the benefit was expiring. That’s the lowest level for these so-called continuing claims since early April.

Some economists say it’s no coincidence new and continuing applications for benefits began to tumble right around the July 31 expiration of the federal stipend.

“This is not rocket science, folks. When you pay people more to sit at home than to go back to work, they sit at home,” said chief economist Stephen Stanley of Amherst Pierpont Securities. “When you don’t, if they are offered a job, they go back to work.”

From InsiderNJ:

NJ Business Coalition Urges Governor to Let New Jersey Reopen for Business

With coronavirus numbers in the state declining, the New Jersey Business Coalition, a collection of more than 100 business and nonprofit groups, submitted a letter to Gov. Phil Murphy today urging him to end the “pause mode” of the reopening of New Jersey’s businesses.

The coalition’s Recovery and Reinvention Framework 2.0, a comprehensive update to the original framework issued in early May, points to improving numbers in reported cases, decreased hospitalizations and better capacity in the state’s healthcare facilities and strongly encourages a broader or regional reopening of New Jersey’s economy.

The letter states: “If ‘data determines dates’ relative to reopening, as Governor Murphy has consistently said, it is appropriate that as our COVID-19 cases continue to go down, New Jersey’s economic numbers should rise. Unfortunately, this is not the case, and we find ourselves and our economy in an unnecessary and extenuated ‘pause mode.’

“With a rate of transmission of .98 and a positivity rate of 1.6%, there is no reason not to proceed to reopen our economy.”

Absent an immediate move to continue the reopening process, the coalition called on Gov. Murphy to immediately present plans for three coronavirus-based scenarios, with triggers driving levels of reopening activity, to allow businesses to properly plan for whatever comes next.

The coalition also called for a regional approach to opening, based on data, if there is not a willingness to fully reopen the state for business.

“Decisive action is needed immediately so businesses will know whether to plan for a further reopening now or a prolonged limit on their business, necessitating greater government support,” the coalition explained.

“As such, a grid of ‘safe’ vs. ‘cautious’ counties can easily be developed. We should continue to reopen in regions of the state where the trend lines indicate the ability to do so.”

From NJ.com:

Why Murphy’s borrowing plan scares me to death

When this pandemic crushed New Jersey’s economy, it seemed obvious that the state would need to borrow money to survive it, and reasonable to spread the pain across at least the next few years as we pay it back. If I lost my job, I might do the same.

So, it struck me as nuts, at first, when Republicans filed suit to block Gov. Phil Murphy’s plan to borrow up to $10 billion. They don’t have a better plan, so I dismissed it as a spitball from the cheap seats in the run-up to next year’s election.

But now I’m scared. Because the state Supreme Court just ripped the mask off this thing, asking a series of shrewd questions at a hearing on Wednesday that revealed the beast underneath.

This is not just about coping with the pandemic. Murphy is using the pandemic to claim new authority to spend borrowed money on anything he wants, leaving the bill to his successors. The design of this thing is badly flawed, and our best hope now is that the Court rides to the rescue by putting up some boundaries.

My moment of clarity came 1 hour and 58 minutes into the hearing when Chief Justice Stuart Rabner pressed Murphy’s attorney to describe what type of spending might be justified, on an emergency basis, with the borrowed funds. 

“Could the money be used to subsidize a sports arena to the tune of $1 billion?” Rabner asked.

“Yes, your honor,” said the state’s lawyer, Jane Reilly. “If the Legislature, who has a wider view than I do of the economic needs of the state and the best means to remediate that, if they were able to come up with an explanation of why the sports arena was necessary to meet the fiscal emergency the pandemic caused, then yes, that would be acceptable.”

More than a million more Americans lost their jobs last week, and we’re celebrating these numbers as good news? Because initial claims fell? The US is still losing jobs at an alarming pace, NJ still losing jobs at an alarming rate. Even worse, these new applicants aren’t going to be eligible for any additional stimulus payments.

From NJ.com:

New unemployment claims in N.J. reach lowest levels of pandemic

New claims for unemployment benefits last week reached their lowest levels since the coronavirus and efforts to fight its spread began putting New Jerseyans out of work en masse in March.

Another 16,573 New Jersey workers filed for unemployment benefits last week, according to the state Department of Labor and Workforce Development. That’s down from more than 28,000 the week prior and well below March and April, when more than 200,000 workers were filing new claims weekly.

…

Nearly 1.5 million workers in the Garden State have filed unemployment claims since March 15. Of those, 1.3 million have been deemed eligible for benefits and 96% of eligible workers have received some payment, the Labor Department said in its weekly claims report.

…

New Jersey’s unemployment rate, 16.2 percent, is at the highest level since record keeping began in 1976.

From NBC News:

N.J. sees spike in COVID-19 cases as residents slack off on masks and social distancing

Alarm bells went off in New Jersey on Monday as a state that appeared to have successfully flattened the coronavirus curve saw the number of new cases spike by 175 percent in the last two weeks, an NBC News analysis of the latest figures showed.

As of Monday morning, New Jersey had reported 185,537 confirmed cases and 15,836 deaths, according to the latest numbers. The state’s rate of transmission had climbed back up to 1.48, equal to the levels in April when the pandemic was at its worst in the state.

From July 20 through Aug. 2, New Jersey logged 5,070 new cases and 134 deaths, the NBC News figures showed.

Gov. Phil Murphy responded Monday by tightening restrictions on the number of people who can gather at indoor venues or parties from 100 to 25.

“Limiting indoor gatherings to 25 people is a pretty meaningful step,” Murphy, a Democrat, said. “We knew as we reopened we’d take on more risk.” 

The governor on Friday conceded that the state was “standing in a very dangerous place” and he placed the blame squarely on the “knuckleheads” who fail to follow the rules.

“Everyone who walks around refusing to wear a mask or who hosts a house party is directly contributing to these increases,” Murphy said. “This has to stop, and it has to stop now.”

From NJB Magazine:

NJ Unemployment Claims Rise 8.8% Amid Broader Implications

Unemployment continues to mount in the Garden State, with 28,063 new claims filed for the week ending July 25, marking an 8.8% increase when compared to the week prior to that, according to the New Jersey Department of Labor and Workforce Development (LWD).

The cumulative total of unemployment claims filed in New Jersey since March 15 is now 1,441,936, out of an entire statewide nonfarm workforce of approximately 4.2 million.

At least some of these 1.44 million individuals have returned to work since initially filing for benefits. Meanwhile, the United States Bureau of Labor Statistics reported on July 17 that for the month of June, New Jersey had an unemployment rate of 16.6%.

Some experts are concerned that as unemployment continues to rise, demand for goods and services may decrease, potentially further imperiling the economy and potentially creating even more unemployment.

Food banks have additionally seen a spike in demand, with Gov. Phil Murphy this month directing $20 million in federal CARES Act funding towards these entities (in two phases) for the remainder of 2020.

Feeding America projects a 56% increase in New Jersey’s food insecurity rate in the coming months as a result of the coronavirus pandemic, and The Community Food Bank of New Jersey’s President and CEO Carlos M. Rodriguez said at a July 9 event that this translates into 432,000 state residents.