New Jersey Real Estate Report

From TechCrunch:

Commercial real estate could be in trouble — even after this is over

Commercial real estate owners, brokers, and landlords have collectively made many hundreds of billions of dollars a year in recent years as the economy zipped along.

Now, they’re getting clobbered by the pandemic-fueled economic crisis. Worse, their industry may be forever changed by it.

To state the obvious, extracting rent from nearly anyone right now is problematic. According to the National Multifamily Housing Council, just 69% of U.S. households had paid their rent by April 5 compared with the 81% who’d paid by March 5 and the 82% who paid by the same time last year.

That statistic will almost assuredly look worse by May 5, given the soaring numbers of both laid-off and furloughed employees.

On the commercial side, the problem is beginning to look as dire. In addition to the countless small retail and restaurant businesses that may be forced to permanently vacate their commercial spaces because they can no long afford them, a growing number of corporate chains is also beginning to prove unwilling or able to pay their rent.

WeWork, for example, has stopped paying rent at some U.S. locations while it tries to renegotiate leases, says the WSJ, this even as the co-working company continues to charge its own tenants.

Staples, Subway and Mattress Firm have also stopped paying rent as a way to strong-arm building owners into rent reductions, lease amendments and other courses of action designed to offset the losses they are incurring because of the coronavirus.

From MarketWatch:

This hard truth about the mortgage markets isn’t being told

Everyone wants to know what impact the coronavirus and the government response to it will have on housing markets. While it is too early to hazard a guess, some things are becoming increasingly clear.

Already, it looks as if the U.S. is moving towards a temporary moratorium on mortgage payments. Fannie Mae and Freddie Mac unveiled an emergency program which provides a two-month deferral of mortgage payments for any homeowner who claims to be facing a hardship because of the virus.  The payments will be tacked on at the end of the mortgage term.  

The coronavirus rescue law just enacted by Congress includes a provision which requires all firms that service federally-backed mortgages to grant a forbearance of up to 360 days for any borrowers who say they have been harmed by the coronavirus outbreak.

It is not much of a stretch to say that this virus has changed everything. Many of you may sense that the virus has undermined what you thought was still a fairly strong housing market around the country.

In truth, the so-called housing recovery since 2010 has been little more than a carefully constructed illusion. The belief in a strong housing recovery was carefully devised using a strategy of misleading information, withheld data and false impressions.

From Forbes:

The Latest Numbers On Coronavirus’ Impact On The Residential Real Estate Market

Realtor.com just released its latest numbers on COVID-19’s impact on the national residential real estate market. The data tracked is for the month of March, which not surprisingly changed significantly over 31 days. 

“The month started out to be a strong spring buying season, which is what we expected,” explains Danielle Hale, chief economist at Realtor.com. “The impact of COVID-19 materialized in the latter half of March. Week by week, we are seeing decreases in new listings.”

It’s no surprise sellers who don’t have to sell right now are rethinking listing their homes. Buyers who aren’t under pressure to purchase a home are also pulling back. Inventory declines, a key market indicator, are also slowing. “We are seeing buyers hesitating as much as sellers now. In February, we had lots of buyers out there actively looking and not enough inventory,” Hale recalls.

Here’s what some of the number crunching Realtor.com did for March looks like. The number of homes for sale declined 15.7% year-over-year. Despite the decline, the national median listing price grew 3.8%, to $320,000. When Realtor.com looked at the weekly data, including the last two weeks of March as the coronavirus crisis hit more parts of the county, listing prices were growing at the slowest paces for 2020. “The data is constantly evolving as we look at weekly numbers,” Hale notes. 

The most up-to-date research clearly shows declines in homebuyer interest. According to Realtor.com, in the weeks ending March 21 and March 28, newly listed properties decreased by 13.1% and 34.0%, compared with the year before. This supports recent surveys conducted by Realtor.com pointing to declining interest for potential buyers and sellers.  

From the Star Ledger:

Selling or buying a home? See how coronavirus is affecting the real estate market in N.J.

Real estate agents are still working, but they said many buyers and sellers are putting their plans on hold.

“I have three potential sellers I was preparing to work with. All three have decided to wait at my recommendation,” said Darren Pecoraro, a broker associate with Keller Williams West Monmouth. “It’s just too risky right now, and we need to be concerned with liability as well.”

His company decided to have all clients sign a hold harmless agreement, just in case someone gets sick despite precautions. Other agencies have followed suit.

…

Chiquita Pittman, a sales associate with RE/MAX Platinum who works primarily in Middlesex, Somerset and Monmouth Counties, said she’s taking every precaution on home showing requests while following guidelines from the National Association of Realtors (NAR). 

“We use disposable gloves, shoe covers and hand sanitizer,” Pittman said. “We turn on all the lights and open cabinets and doors for all showings.”

But the reality is that there haven’t been many showing requests since the governor’s stay-at-home order, she said.

From the Star Ledger:

Trump says he may quarantine parts of N.J. in coronavirus crisis 

President Donald Trump said Saturday he is considering imposing a two-week quarantine on parts of New Jersey, New York and Connecticut to stop the spread of the coronavirus.

New York has more cases of COVID-19 than any other state (52,318), with New Jersey second (11,124).

“Some people would like to see New York quarantined because it’s a hotspot — New York, New Jersey,” Trump told reporters at the White House before departing for Norfolk, Virginia, to see the hospital ship USNS Comfort set off for the New York area, according to a White House transcript.

“Maybe one or two other places; certain parts of Connecticut quarantined,” the president added. “I’m thinking about that right now. We might not have to do it, but there’s a possibility that sometime today we’ll do a quarantine — short-term, two weeks — on New York, probably New Jersey, certain parts of Connecticut.”

Gov. Phil Murphy said Saturday he and Trump did not discuss a possible quarantine when the two spoke by phone Friday.

“I’ve got no more color on it,” Murphy said in Trenton during his daily coronavirus press briefing. ”There’s no question the greater New York metropolitan area is the number one hot spot. … Until further notified, we’re gonna keep doing exactly what we’re doing. We believe the data and our facts are on our side.”

Who knew we were still popular?

From the Star Ledger:

N.J. liquor stores deemed essential, will stay open during coronavirus shutdown

With the coronavirus wreaking havoc on lives the world over, it’s fair to say that everyone is feeling more stressed than normal. Luckily, Gov. Phil Murphy’s order to close non-essential businesses in New Jersey won’t stop you from taking the edge off with booze while your self-quarantine.

Murphy deemed liquor stores among those essential businesses in his executive order. So whether you’re making a quarantini, sipping some social distancing sangria or just cracking open a by yourself beer, you’ll be able to get it at your liquor store.

Well, at this rate, we might as well keep this going for a while.

From the Record:

NJ sets voluntary statewide curfew, and casinos, bars, gyms closing until further notice

New Jerseyans should not leave their homes from 8 p.m. to 5 a.m., as Gov. Phil Murphy announced an extraordinary action of recommending a statewide curfew for his 9 million residents in an attempt to contain the spread of the novel coronavirus. 

All casinos, bars, movie theaters, nightclubs, performing arts centers and gyms must shut down at 8 p.m. Monday and will remain closed until further notice in New Jersey, New York and Connecticut, the three governors announced Monday. People can no longer go to a restaurant to dine in, but restaurants can still provide delivery and takeout. The businesses must remain closed until the state governments say they can reopen. 

“Everyone needs to stay in and be safe,” Murphy said in a phone call with New York Gov. Andrew Cuomo and Connecticut Gov. Ned Lamont to announce the new restrictions. “And we can’t say this enough, that everyone needs to stay in and be safe, and just because you don’t feel sick, and this is a particular shout-out to our young people, it doesn’t mean you aren’t carrying the virus.”