Really Zillow?

Posted on February 7, 2022 by grim

From Fortune:

Zillow: Our 2022 housing forecast is way off—home prices now set to spike 16%

Homebuyers got crushed last year as home prices soared at their highest clip on record. Housing economists saw that price growth—which peaked at a year-over-year rate of 20% last year—as simply unsustainable. Their economic models agreed: Among the seven forecast models reviewed by Fortune heading into 2022, every single one predicted home price growth would slow significantly this year.

But over the past few weeks, that consensus is no longer so unified. Now, more industry insiders are throwing out their previous forecasts and replacing them with more bullish short-term outlooks. Indeed, some experts say the 2022 spring housing market might go down as one of the most competitive on record.

Look no further than Zillow. Back in December, the home listing site predicted that U.S. home values would climb 11% this year. Economists at Zillow now say that forecast is too conservative. Their latest forecast finds home prices are set to spike 16.4% between December 2021 and December 2022. If it comes to fruition, it would mark another brutal year for home shoppers. 

Why is Zillow raising its 2022 home price growth forecast? A lot of it boils down to housing inventory. During the pandemic, inventory has plunged to a four-decade low as more buyers rushed into the market. That trend was predicted to reverse late last year as forbearance protection programs lapsed and mortgage rates rose. But not only has that not happened, the inventory situation has gotten worse. In January, there were just over 923,000 U.S. homes listed for sale on Zillow. That’s down 40.5% from the pre-pandemic level in January 2020, and down 19.5% from January 2021.

Posted in Economics, Housing Bubble, National Real Estate | 46 Comments

Lawwwnguyland

Posted on February 5, 2022 by grim

From Newsday:

Long Island home prices surged 60% since 2012

Long Island homebuyers today have to spend more, move faster and choose from a vastly smaller roster of listings than a decade ago, according to a new report from real estate brokerage Douglas Elliman and appraisal firm Miller Samuel.

The median sale price for a Long Island home rose 60% over the past decade to $560,000 last year compared with $350,000 in 2012, according to the data, which excludes the Hamptons and North Fork and wasn’t adjusted for inflation. 

In Nassau County, the median sale price rose 60% to $640,000 over the decade, and in Suffolk increased by about 62% to $490,000, excluding the Hamptons and North Fork. It took 54 days on average between the time a home went on the market and when a sale closed, which is down by more than half from the 128 days it took a decade ago.

The median price of a single-family home sold last year on Long Island, excluding the Hamptons and North Fork, was $580,000, or about two-thirds higher than a decade ago. The median price for condos, which make up about one-eighth of the Long Island home sales market, rose 52% to $365,000 in the past decade. There were 4,430 condo sales last year, which was nearly 73% more than back in 2012.

Posted in Economics, National Real Estate, NYC | 81 Comments

So how will we spend it?

Posted on February 3, 2022 by grim

From the Record:

New Jersey in line for $641 million from opioids settlement, a lifeline for treatment

New Jersey is on track to receive more than $641 million as part of a nationwide opioid settlement agreement with Johnson & Johnson and the country’s three largest pharmaceutical distributors. 

Every one of New Jersey’s counties and municipalities that are eligible to join the $26 billion settlement have signed on, which is significant because it paves the way for the state to collect the maximum amount, acting Attorney General Andrew J. Bruck said Wednesday. 

The agreement with New Jersey-based Johnson & Johnson and three pharmaceutical distributors — McKesson, Cardinal Health and AmerisourceBergen — would resolve claims involving their roles in the country’s opioid crisis. 

New Jersey needed all 21 counties and all 241 municipalities that have populations over 10,000 to approve a settlement in order for the state to be eligible for the maximum amount of more than $641 million. 

Posted in Politics | 280 Comments

No return to “normal”

Posted on February 2, 2022 by grim

From A Wealth of Common Sense:

Why It Could Be Years Until We See a Normal Housing Market

The people buying homes today have excellent credit scores. This wasn’t the case in the subprime boom of the early-to-mid aughts when the majority of buyers came from people with low credit scores.

Just imagine you’ve owned your home for 5 years or more. By now you’ve certainly refinanced at least 2-3 times and likely have a borrowing rate of 3% or less. You’re also sitting on some nice equity through a combination of principal payments and rising prices.

It sure doesn’t seem like housing prices are going to stop rising any time soon and rents are also on the rise so it makes sense people are choosing to hold onto their original property even after buying something new.

They can simply charge enough rent to cover the mortgage, insurance and taxes and still come out ahead by slowly paying down a cheap mortgage and seeing their house go up in value.

If I had to guess it’s going to be years until we see anything approaching a “normal” housing market. We simply didn’t build enough homes following the last housing crash to meet the demand coming from millennials reaching their household formation years.

Posted in Demographics, Economics, Employment, Housing Recovery, National Real Estate | 120 Comments

Welcome to post-covid

Posted on February 1, 2022 by grim

From NJ1015:

Many NJ residents believe it’s time to move on from COVID

Even as the omicron surge continues to drop, a new poll finds Garden State residents are still concerned about COVID but only to a certain point.

Patrick Murray, the director of the Monmouth University Polling Institute, said the just-released survey finds almost two years after the pandemic began, “70% say it’s time we just accept it’s here to stay and get on with our lives.”

The survey finds 89% of Republicans feel this way along with 71% of independents, while 47% of Democrats agree it’s time to accept the virus and move on.

He said the poll finds “a majority of 52% support having some sort of facemask and social distancing guidelines, but that’s down from 63% back in September.”

Murray said when we look at approval for “vaccine mandates in workplaces, that number is now down to 43%, from 53% just a few months ago.”

“People are saying they’re not working so how can we mandate them,” he said.

About a third of respondents, 34%, believe the COVID outbreak will be brought under control by the end of the year, but 28% think a return to normalcy will never happen.

The survey also finds about a third of people who have been vaccinated report also being infected with COVID, and 61% of those who have not gotten a shot say they have been infected with the virus.

Posted in General | 122 Comments

We’ve got all the risk

Posted on January 31, 2022 by grim

From NJ1015:

More than 1 in 5 high-risk U.S. housing markets are NJ counties

A 2021 fourth-quarter report released by ATTOM Data Solutions shows that one-fifth of the nation’s counties most at risk for damage to their housing markets due to COVID-19’s ongoing economic impacts were New Jersey jurisdictions counted as part of either the New York or Philadelphia metro areas.

In addition to Bergen, Essex, Hunterdon, Middlesex, Ocean, Passaic, Sussex, Burlington, Camden, and Gloucester counties, Cumberland, Monmouth, and Union also cracked the Top 50.

That’s 13 counties total, out of those 50, right here in the Garden State.

According to Rick Sharga, executive vice president of ATTOM subsidiary RealtyTrac, the calculation of three distinct percentages can put a county at high risk: how much household income it takes to purchase a home, how many homes are underwater (meaning more is owed on the mortgage than the house is worth), and the volume of foreclosure filings.
…
“We’re also in a housing market that is booming across the country, and New York, Pennsylvania, New Jersey, Delaware, no exceptions to that. The housing markets in those areas are still extraordinarily strong,” he said. “The markets that we’re looking at as being the highest-risk markets are also in states that really haven’t recovered as rapidly as some other states have from the COVID recession.”

It’s “no surprise,” then, that so much of New Jersey is high risk, as unemployment rates here have continued to trend higher than the national average.

“These are all markets that had sort of the tightest government regulations,” Sharga said. “The governments, both state and city governments, felt the need to be a little stricter in terms of battling COVID.”
…
Sharga cautions that should the coronavirus trend upward enough again to trigger economic shutdowns, housing markets could collapse in these areas.

“They tend to have a very high percentage of service industry jobs, which are the ones that have been most impacted by the pandemic in the past, and probably would be again if there’s another wave in the future,” he said.

Posted in Demographics, Economics, Housing Bubble, Politics | 127 Comments

Where now?

Posted on January 29, 2022 by grim

From Forbes:

Home price growth decelerates again—forecast models say the peak rate is behind us

Where do we go from here? Every leading real estate forecast modelreviewed by Fortune predicts this home price growth deceleration—which started in September—will continue in 2022. The most bullish outlook comes from Zillow, which predicts home prices will jump 11% this year. Fannie Mae and Freddie Mac say home prices will jump 8.4% and 6%, respectively, in 2022. While that’s lower than the 18.8% we’ve seen over the most recent 12-month period, it’s still above the average rate of appreciation (4.6%) home prices have gone up annually since 1980. 

But not all forecasters are calling for strong appreciation levels this year. For the coming 12 months, Redfin says home prices will climb 3%. That’s pretty close to the forecast price growth rates by Realtor.com (2.9%) and CoreLogic (2.8%). Meanwhile, the Mortgage Bankers Association has the lowest 2022 price growth forecast—predicting median existing home prices will rise just 2.3% this year.

Even if the rate of price growth continues to decelerate, it doesn’t mean home shoppers will get any relief on the cost front. The underlying reason these forecast models predict price growth will slow in 2022 isn’t just because they’re predicting the housing market will cool down a bit. It can also be attributed to the expectation that mortgage rates will shoot up this year as the Federal Reserve works to tame inflation. As mortgage rates rise, so do monthly mortgage payments and the ability for homebuyers to bid up prices. Essentially, it’s a wash: The savings from reduced home price growth gets canceled out by the increased mortgage payments.

Posted in Economics, Housing Bubble, National Real Estate | 128 Comments

18.8% isn’t really “slowing” – just sayin’

Posted on January 26, 2022 by grim

From the WSJ:

U.S. Home-Price Growth Slowed in November

U.S. home-price growth decelerated in November as months of fast-rising prices pushed some buyers out of the market.

The S&P CoreLogic Case-Shiller National Home Price Index, which measures average home prices in major metropolitan areas across the nation, rose 18.8% in the year that ended in November, down from a 19% annual rate the prior month. 

Home sales rose to a 15-year high in 2021. Low interest rates spurred robust demand, and remote work enabled some workers to move farther from their offices and seek out more space to work from home. But intense competition for a limited number of homes on the market pushed home prices to record highs. 

The median existing-home price in 2021 rose to a record $346,900, up 16.9% from 2020, the National Association of Realtors said earlier this month.

Rising home prices have pushed some buyers out of the market. About 52% of prospective buyers were actively house hunting in the fourth quarter, down from 61% in the second quarter, according to a National Association of Home Builders survey.

The Case-Shiller 10-city index gained 16.8% over the year ended in November, compared with an 17.2% increase in October. The 20-city index rose 18.3%, after an annual gain of 18.5% in October. Price growth accelerated in 11 of the 20 cities.

Posted in Economics, Housing Bubble, National Real Estate | 350 Comments

NJ Unemployment Falls to 6.3%

Posted on January 25, 2022 by grim

From ROINJ:

New Jersey adds jobs for 12th straight month; unemployment rate falls to 6.3%

New Jersey Department of Labor & Workforce Development figures for December show the state added 10,100 jobs, according to preliminary estimates by the U.S. Bureau of Labor Statistics.New Jersey has now recovered 561,200 jobs, or about 78% of the number lost in March and April 2020 due to the impact of the COVID-19 pandemic.

The unemployment rate for the Garden State fell by 0.4 of a percentage point, to 6.3%, for the month.

In December, employment gains were recorded in eight out of nine major private industry sectors. Sectors that increased were leisure and hospitality (+3,800), manufacturing (+2,700), construction (+1,900), education and health services (+600), other services (+600), financial activities (+500), trade, transportation, and utilities (+100), and professional and business services (+100). The only sector to record a loss over the month was information (-900). The public sector recorded an increase of 700 jobs over the month.

Based on more complete reporting from employers, previously released employment estimates for November were revised higher to show an over-the-month increase of 28,400 jobs. The state’s November unemployment rate was revised up by 0.1 of a percentage point, to 6.7%.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 112 Comments

Just keeps going

Posted on January 24, 2022 by grim

From Bloomberg:

A Typical U.S. Home Is Now Valued at $320,662 — 20% More Than a Year Ago

Mortgage rates are creeping higher, yet the U.S. real estate market is still breaking records. 

Home values on average jumped almost 20% in the past year, the most ever, according to a new report from Zillow. A typical house is now worth $320,662 — an increase of more than $50,000 from December 2020. 

After two years of surging prices for homes across the country, anxious buyers had hoped 2022 would bring some relief, as policy makers plan interest rates hikes that could cool down the market. That’s yet to happen though, with strong demand from millennials and a shortage of available homes still propping up prices. Mortgage rates just reached their highest level since the pandemic began, but at 3.56% are still historically low. 

“Neither high prices nor slim inventories have deterred buyers so far,” Jeff Tucker, senior economist at Zillow, said in the report. 

Although month-over-month home values had decelerated since July, they jumped 1.2% in November and 1.4% in December. There’s also now a record low number of available properties — only 923,000 homes, down almost 20% since December 2020. When compared with December 2019, that’s a 40.5% decrease. 

And for those who can’t afford to purchase a home, there has been some relief in rent prices. Monthly growth in December was 0.7%, the lowest increase since February. Still, rents are up 15.7% year-over-year, with the average renter now paying $1,855 each month. 

Rents rose in all 50 of the largest metro areas in the U.S., led by Miami, Tampa, Phoenix and Las Vegas.

Posted in Demographics, Economics, National Real Estate | 109 Comments

Fun – dah – mentals

Posted on January 22, 2022 by grim

From the NYT:

Something Has to Give in the Housing Market. Or Does It?

Two years into the pandemic, rundown bungalows command bidding wars, buyers keep snatching up places they’ve never seen, and homebuilders can’t find enough cabinet doors for everyone who wants a new home. The median price for an American home is up nearly 20 percent in a year. The for-sale inventory is at a new low. And the hopeful buyers left on the sidelines have helped drive up rents instead.

All of this may feel unsustainable — the tight inventory, the wild price growth, the dwindling affordability. Surely something’s got to give.

But what if that’s not exactly true? Or, at least, not true anytime soon for renters locked out of homeownership today or anyone worried about housing affordability. There’s probably no quick reprieve coming, no rollback in stratospheric home prices if you can just wait a little longer to jump in.

“It’s not a bubble, it really is about the fundamentals,” said Jenny Schuetz, a housing researcher at the Brookings Institution. “It really is about supply and demand — not enough houses, and huge numbers of people wanting homes.”

Neither side of that ledger has a quick fix. More than six million existing homes sold in 2021, the highest number since 2006, according to data published Thursday by the National Association of Realtors. But that was still well short of satisfying demand. And there’s little evidence to suggest the nation is in a hurry to correct the imbalance between supply and demand.

“My pessimistic view is that the economy is perfectly capable of running with unaffordable housing,” said Daryl Fairweather, the chief economist at Redfin. This was evident over the last decade, she said, when affordability worsened even as the economy continued to grow. And that reality has enabled politicians and the public to largely neglect the issue of housing affordability.

Posted in Demographics, Economics, Employment, National Real Estate | 59 Comments

Shovels Ready

Posted on January 21, 2022 by grim

From the Star Ledger:

Feds clear the way for Gateway Tunnel project to get billions in funding

The final hurdle needed to qualify for federal funding to start building the $12.3 billion Gateway rail Tunnel was cleared Thursday when the Federal Transit Administration raised its rating of the project.
…

“This is a major step towards completing the nation’s most important transportation project, which will modernize our rail infrastructure, get commuters to work, and keep our economy moving forward,” said U.S. Senator Robert Menendez, D-NJ.

Federal funding could be as much as $5.6 billion, or approximately 44% of the projects cost to build two new rail tunnels under the Hudson River and rehabilitate the existing 111-year old tunnels. Amtrak would fund $1.4 billion and also has purchased Manhattan property needed for the project. The state governments of New Jersey and New York would fund up to $6 billion, through low interest, long-term railroad infrastructure loans.

“The day many commuters never thought they’d ever see is finally coming. We are closer than ever to securing a fairly and fully funded Gateway Program and beginning the work of delivering the safe and modern infrastructure our people and economy deserve,” said Gov. Phil Murphy in a statement.

Posted in New Development, New Jersey Real Estate, NYC | 104 Comments

It was legal to discriminate against older workers in NJ

Posted on January 20, 2022 by grim

From the Star Ledger:

Older workers in N.J. have new protections to help them find a job, get promoted

In response to an increasingly older workforce and retirement ages, on Oct. 4, 2021, Gov. Phil Murphy signed a bill expanding the scope of the New Jersey Law Against Discrimination (“LAD”) by eliminating decades-old provisions that permitted employers to make age-based employment decisions in certain circumstances. This legislation seeks to serve the laudatory goal of protecting older workers against workplace discrimination in the Garden State.

For private-sector employers, this legislation amends the law to extend protections to older workers by eliminating a provision in the law that permitted employers to refuse to hire or promote employees over 70 years of age. It also expands the remedies available to an employee unlawfully forced to retire due to age to include all remedies available under the law, as opposed to just back pay as was the case pre-amendment.

Originally enacted in 1945, the Law Against Discrimination did not originally include age as a protected category, and it was not until 1962 that the law was amended to include age. However, in 1985, the law was amended to expressly clarify that, although employers were barred from terminating or demoting employees on account of their age, employers were nonetheless permitted to “refus[e] to accept for employment or to promote any person over 70 years of age.” Moreover, that same 1985 amendment expressly limited the remedies available to employees forced to retire due to age to back pay only. Although New Jersey continued to both broaden the law and expand the number of groups subject to its protections, for many years, age was relegated to second-class status.

Posted in Demographics, Economics, New Jersey Real Estate | 147 Comments

The snark is just too good (sorry Mary)

Posted on January 17, 2022 by grim

From NJ1015:

Is this a $3M dump? No one wants Mary J. Blige’s NJ mansion (Opinion)

Singer Mary J. Blige was inducted into the Rock and Roll Hall of Fame last year. She’s won nine Grammy awards, been nominated for Oscars and sold over 100 million records.

Yet real estate deals have not been kind to her.

In 2008, she purchased a 13,000-square-foot mansion in Saddle River. She spent a decade on and off trying to sell it and it finally sold in 2020 for $5.5 million, an almost $7 million loss.

Then there’s this one.She still owns a home in Cresskill. It’s another mansion, with more than 7,000 square feet. The description sounds amazing: six bedrooms, eight full bathrooms, two half baths, three fireplaces. Guest quarters. Has its own gym.

But no one wants it.

It’s been for sale for two and a half years. No takers. Why? Well, tell me if you’d be suspicious about a property advertised where none of the photos show the inside of the home. Take a look (oh, you really need to take a look).

The craziest thing is it first went on the market in the summer of 2019 for an ask of $2.25 million. Then in mid 2021, with no takers, she raised the price to $2.75 million. Again no takers. By October the price was again increased to $3 million where it remains today.

Not sure she’s understanding the supply and demand concept.

Posted in Economics, Housing Bubble, New Jersey Real Estate | 231 Comments

The kids are alright (kinda)

Posted on January 14, 2022 by grim

From Insider:

1980s millennials are finally recovering from the Great Recession

Nearly 15 years after the Great Recession hit, the eldest millennials are finally doing alright.

Graduating into a blighted job market put them on a rocky road to building both their career and wealth, which was only further hampered by massive student debt and soaring living costs for things like homes and health care. But data over the past year has revealed that the cohort is making a comeback from their economic challenges in the job market and in their bank accounts.

Research shows that those who graduate during a recession could see stagnation in financial growth for up to 15 years. The St. Louis Fed previously deemed millennials born in the 1980s at risk of becoming a “lost generation” for wealth accumulation. As of 2016, their median wealth levels were 34% below older generations when they were a similar age, making them the slowest cohort to recover from the Great Recession.

“Not only is their wealth shortfall in 2016 very large in percentage terms, but the typical 1980s family actually lost ground in relative terms between 2010 and 2016, a period of rapidly rising asset values that buoyed the wealth of all older cohorts,” the St. Louis Fed report read.

But a follow-up report last year found “millennials may not be as ‘lost’ as we once thought.” It revealed that the cohort made serious ground in building wealth. As of 2019, they had narrowed their wealth deficit to 11%. Of course, this doesn’t take into consideration effects from coronavirus recession, as full data for this period isn’t yet available.

Posted in Demographics, Economics, Employment, National Real Estate | 153 Comments