Montclair pretty much the most unequal place in NJ

Haven’t gotten a chance to post this one, but it needs to be posted. From the Star Ledger:

How every town in N.J. rates on income inequality

Despite what Montclair wants you to believe, outside of the typical wealth enclaves like Saddle River, Far Hills, Deal and the like, Montclair ranks as pretty much the most unequal large town in New Jersey. There are few towns in NJ that show such a blatantly obvious amount of geographic segregation as Montclair, less than 1 mile separates some of the wealthiest residents of NJ from some of it’s poorest.

So what’s more important, creating an image of being inclusive and equal, or actually being it? Turns out, there are large swaths of Essex, Passaic, Bergen, and Hudson counties that are more diverse, and more equal, than Montclair.

So what gives? How did Montclair manage to create an image of itself that is almost entirely undeserving? The inclusive educational system? The town’s wealthiest residents have no problem packing Montclair Kimberly full, despite the fact that the yearly tuition is $30,000, making it one of the most expensive private schools in NJ. Sending 3 kids to MKA will cost you north of a million dollars, by the way. Good number of 4th Ward residents probably don’t even make $30,000 a year, let alone pay that for school.

Seems like a load of bullshit to me, especially when neighboring Clifton is more diverse and integrated. Are there towns that are less diverse and wealthier than Montclair? Absolutely, but they aren’t hell bent on creating an image that really appears to be completely manufactured marketing, and not reality. Having just come back from Brazil, I’ve got to say, the wealth gaps are pretty similar.

Seems like a great place to live if you are rich and want to feel good about yourself.

Posted in New Jersey Real Estate | 28 Comments

So Close!

NY State on the verge of taking the #1 foreclosure spot:

Posted in Foreclosures, New Jersey Real Estate | 173 Comments

Christie kicks the can

From the Star Ledger:

Christie signs bill to give Sandy victims some protection against foreclosure

New Jersey homeowners facing foreclosure while they’re still trying to rebuild from Hurricane Sandy now can be protected from losing their homes.

A bill signed Friday by Gov. Chris Christie gives certain homeowners affected by Sandy the potential to ward off foreclosures for up to three years while they try to recover financially from the storm.

In his signing statement, Christie indicated he wasn’t completely happy with the bill (S-2300, A-333), which he said was too broadly written to include foreclosures not precipitated by Sandy.

But the signing was welcome news to members of the New Jersey Organizing Project, a grass-roots group of Sandy victims and other housing advocates who have been waiting two years for the governor to take action.

Last fall, Christie incurred the wrath of Sandy victims at an appearance in Seaside Heights where they complained many were still not home and faced financial ruin because of the state’s slow process in disbursing federal Sandy aid to rebuild.

At that time, Christie said he would take another look at the foreclosure bill, but many, including Mangino, said they were skeptical Christie would sign it.

“For all the families struggling to keep their heads above water, there’s hope,” said Staci Berger, president and chief executive officer of the Housing and Community Development Network of New Jersey. “Our families, friends, and neighbors deserve better than what they’ve been forced to endure over the last four years. Because of the hard work and dedication of our legislative leaders, Sandy survivors, and advocates, there will finally be some relief and the chance to rebuild.”

The law creates a forbearance period for up to three years for Sandy victims who have either been approved for help through the Reconstruction, Rehabilitation, Elevation and Mitigation Program or the Low-to-Moderate Income Program or those who have received rental assistance through the Federal Emergency Management Agency for damage to their primary residence.

Those approved would receive a certificate of eligibility for mortgage forbearance from the state Department of Community Affairs, allowing them to tack onto the end of their mortgage the months they missed paying during their Sandy recovery.

They would still be responsible for paying their taxes and insurance.

Thousands of homeowners would be eligible for help under this law, Mangino said.

That includes Sandy victims who were facing foreclosure before the storm hit or whose mortgage default problems were unrelated to storm damage. Christie said he didn’t want it as part of the law because he said it would cause “mountains of damage” to “our federal funding flow and our state housing market.”

“I am very concerned these new requirements may adversely impact the state’s recovery efforts, jeopardize federal Sandy funding, increase borrowing costs and ultimately delay Sandy-impacted residents’ return to their homes,” he wrote.

Calling the bill “sloppily written” and “ill conceived,” Christie accused its Democratic sponsors of “politically pandering” to Sandy victims during to get re-elected.

Posted in Foreclosures, New Jersey Real Estate | 408 Comments

Think warm thoughts – shore rentals already up 33% YOY.

From the Philly Inquirer:

The rush is already on for rentals at the Jersey Shore

From the second-story deck of his aunt’s rental property near 20th and Central, real estate agent Bill Godfrey points out the ocean view a block away and the surrounding Gold Coast neighborhood as just two of the unit’s special amenities.

But what potential summer renters really want to know about the place is how the flatware looks and what kind of wine glasses are in the cupboard, Godfrey said.

“Oh, and how new the mattresses are,” Godfrey notes as among the nitty-gritty details that customers want to know before they are willing to plunk down as much as $4,000 for a week’s stay in this unit during the summer’s “high season.”

And getting precisely what they want when they walk through the door may be what is driving those renters to sign on the dotted line seemingly earlier and earlier each year. Rentals in Ocean City’s prime “high season” — from mid-July to mid-August — start at around $1,500 a week for a one-bedroom condo and go as high as $18,000 a week for a seven-bedroom house on the beach.

Marr Agency, where Godfrey works, and other real estate agencies in this Cape May County barrier island resort — and in towns from Long Beach Island south to Cape May — report that the number of signed contracts and deposits on summer rentals by the beginning of February were up by as much as 33 percent over the same time last year.

And while the bottom line on rental profits may ultimately stay mostly stagnant year to year because there are only so many units and so many weeks in the summer, an early rush on rentals may signal a strong 2017 Shore summer season with regard to tourism spending in other sectors, like restaurants, amusements, retail, and activities, according to experts.

Tourism is big business in New Jersey. The state’s second-largest industry attracted 95 million people to the Garden State, raked in a whopping $43.4 billion, and accounted for 318,000 jobs in 2015. And those numbers have been on a steady increase over the last decade.

Posted in Economics, New Jersey Real Estate, Shore Real Estate | 54 Comments

How low can inventory go?

From HousingWire:

Realtors: Majority of metros hit peak levels in 2016

The fourth quarter of 2016 saw the best quarterly sales pace of the year, but also pushed housing inventory to record lows, and many markets to home prices with record highs, according to the latest quarterly report from the National Association of Realtors.

Actually, home prices in over half of measured markets either hit or surpassed their previous peak level, according to the report. The median existing single-family home price increased in 89% of measured markets. While 158 of metro areas saw gains from the fourth quarter of 2015, the remaining 20 metros recorded lower home prices than the year before.

“Buyer interest stayed elevated in most areas thanks to mortgage rates under 4% for most of the year and the creation of 1.7 million new jobs edging the job market closer to full employment,” NAR Chief Economist Lawrence Yun said. “At the same time, the inability for supply to catch up with this demand drove prices higher and continued to put a tight affordability squeeze on those trying to reach the market.”

This is more than the third quarter, when 87% of metros reported annual price increases. Also, of the metros that saw price gains, 17% of them were in the double digits, compared to 14% in the third quarter.

“Depressed new and existing inventory conditions led to several of the largest metro areas seeing near or above double-digit appreciation, which has pushed home values to record highs in a slight majority of markets,” Yun said. “The exception for the most part is in the Northeast, where price growth is flatter because of healthier supply conditions.”

The national median existing single-family home price in the fourth quarter was $235,000, which is up 5.7% from the fourth quarter of 2015’s $222,300.

While home prices were reaching new highs, housing inventory was reaching new lows. At the end of the fourth quarter there were 1.65 million existing homes available for sale, a decrease of 6.3% from the 1.76 million homes a year before to the lowest level since NAR began tracking home supply in 1999. The average supply during the fourth quarter was 3.9 months, down from 4.6 months the year before.

Posted in Demographics, Economics, National Real Estate | 103 Comments

Annual home prices accelerating … with rates higher?

From MarketWatch:

Home prices accelerating in the face of rising mortgage rates

U.S. house prices rose at an accelerated pace in December, a sign that higher mortgage rates aren’t yet diminishing outsize demand for properties.

Data provider CoreLogic said its home price index was up 0.8% during the month, and 7.2% compared to a year ago. That’s the fifth straight month in which the yearly price increase was higher, including during months that saw mortgage rates jump nearly a full percentage point.

Low supply is boosting prices higher and higher, and CoreLogic expects that prices will rise 4.7% during 2017. That would take its national index – now 3.9% below the high last set in 2006 – to a fresh high sometime this year.

But CoreLogic’s forecasts have fallen short over the past few months as price gains defy gravity.

There are some familiar faces among the states with the strongest price appreciation: prices rose 10.8% in Washington and 10.3% in Oregon. But they were stronger in Idaho, at 9.0%, than in Colorado, which saw a gain of 8.9%.

Only one state, Wyoming, had a yearly decline in December. Prices were down 0.3% there.

Posted in Economics, Housing Bubble, Housing Recovery, National Real Estate | 146 Comments

Up or Down or Up or Down or Up or Down

From Marketwatch:

Housing demand may keep market afloat, even if rates rise

How will the housing market handle rising rates?

Ever since the November election, when the unexpected Trump victory sent bond yields flying and mortgage rates following closely behind, analysts have been preoccupied with that question. From overly cautious lending standards to extremely tight inventory, the housing market has plenty of challenges, and any additional constraint won’t help.

But new data from Black Knight Financial Services suggests that demand might be resilient enough to withstand higher borrowing costs in 2017.

The last time mortgage rates spiked was in mid-2013, when then-Fed Chairman Ben Bernanke warned markets that the central bank would shortly begin to unwind its extraordinary stimulus programs. Rates jumped a full percentage point between April and September, and mortgage applications plunged.

So did home price appreciation.

In an illiquid market like housing, it takes time for prices to respond – in this case, until August, when they were rising at an annual rate of 9%. Then appreciation fell every month for over a year until hitting bottom.

When price gains finally starting rising, in early 2015, they kept going. Lower rates helped boost demand, and that was reflected in stronger pricing, said Ben Graboske, Black Knight’s vice president of data and analytics.

It’s worth noting that there’s another factor driving prices up: extremely tight supply. Inventory of previously-owned homes fell to a 17-year low last month, and choices of both existing and new homes have been so scarce that analysts have assumed it will quench demand at some point.

But prices even spiked a bit in the last months of 2016 – even after rates surged post-election. Black Knight doesn’t have December home price data yet, and Graboske cautioned that it’s hard to predict the path of mortgage rates from here on, with so much uncertainty around policy and markets.

If rates go up enough, price appreciation could slow – and possibly even reverse, he told MarketWatch.

But there’s another big question mark hanging over the housing market: the path of regulatory reform. If there are big changes to the 2010 Dodd-Frank law, Graboske said, it could open up lending to far more Americans.

Posted in Demographics, Economics, National Real Estate, Politics, Risky Lending | 64 Comments

Shut Up Gen X

From the NY Times:

Generation X More Addicted to Social Media Than Millennials, Report Finds

We all know the stereotype: silly millennials, tethered to their phones, unable to accomplish the simplest tasks without scrolling their Instagram feeds, snapping their friends and/or tweeting inanely.

But a Nielsen report released last week shows that Americans from 18 to 34 are less obsessed with social media than some of their older peers are.

Adults 35 to 49 were found to spend an average of 6 hours 58 minutes a week on social media networks, compared with 6 hours 19 minutes for the younger group. More predictably, adults 50 and over spent significantly less time on the networks: an average of 4 hours 9 minutes a week.

Sean Casey, the president of Nielsen’s social division, said the finding initially surprised him because “the going thought is that social is vastly owned by the younger generation.”

“It’s kind of synonymous,” said Mr. Casey, who wrote the foreword to the report. “When you think of millennials, you think of social.”

Again, in this category, it was Generation X that could not look away from its devices: On an average day, the report found, 42 percent of those interacting with television on Facebook were from 35 to 49; only 40 percent were millennials.

Posted in Demographics, Unrest | 33 Comments

Regulations killing Atlantic City

From the Star Ledger:

Casino bureaucracy Revels in red tape instead of fixing past mistakes in A.C.: Mulshine

I was driving across the country a few years ago when I decided to get off the Interstate and try some local roads through Iowa.

This brought me through the town of Waterloo, coincidentally enough the birthplace of Lt. Gov. Kim Guadagno.

Guadagno is now running for governor based on her accomplishments during her seven years as lieutenant governor. The chief – and perhaps only – such accomplishment is her position as head of the Red Tape Review Commission, a nine-member panel that set for itself the task of making it easier to run a business in New Jersey.

Let us consider how the state ranks compared to other states in red tape as it concerns the casino industry.

As I was reaching the western end of Iowa, I saw that if I went north a few miles I’d be in South Dakota. I’d never been there before so it seemed worth the trip.

It was, if only for what I saw when I pulled up to pump some gas.

When I went inside to pay, I found myself in a casino.

Here’s what I saw: slot machines, card games and booze.

Here’s what I didn’t see: A mandatory parking fee, lots of state employees standing around doing nothing and a massive hotel full of vacant rooms.

There’s a lesson in that, but I fear it is lost on Guadagno and the rest of the people who run New Jersey.

In 1976 we made history by becoming only the second state after Nevada to legalize casino gambling.

Over the ensuing years we again made history – by becoming the only state to ever screw up casino gambling.

What happened last week with the former Revel Casino represented just the latest effort by the state to strangle an industry that most people thought could not be killed.

Then last week the billionaire who bought this white elephant at a bargain-basement price, businessman Glenn Straub, saw his effort to reopen it stalled by the sort of red tape that the woman from Waterloo pledged to eliminate.

Straub told the Casino Control Commission that he wants to open some of the non-gambling sections of the building by Presidents’ Day and then contract the casino and other sections to a firm experienced in running casinos.

No dice, said the commission. Straub would still have to go through the miles of red tape needed to get that license. That’s the law.

It may well be, but that law has been an abject failure. The Casino Control Act was adopted at a time when the only other state to have legal gambling was Nevada. Casino operators would put up with anything to open in Jersey.

Posted in Politics, Shore Real Estate | 22 Comments

Foreclosure auctions beginning to normalize?

From HousingWire:

Third-party sales at foreclosure auctions now higher than ever

Investors are undaunted by rising home prices and increasing interest rates, and perhaps even encouraged by it, as the share of third-party sales at foreclosure auctions reached a new high.

In fact, third party buyers, those who are not associated with the lender or former owner, made up 28.5% of all completed foreclosure auctions in 2016, according to the Year-End 2016 U.S. Home Sales Report from ATTOM Data Solutions, a fused property database.

The remaining 71.5% went back to the foreclosing lender. This is up from 23.5% in 2015 and the highest point going back to the earliest data available in 2000.

“The increased competition at the foreclosure auction is resulting in higher sales prices there, which can even result in surplus proceeds going to the distressed homeowner in some cases after other lien holders have been paid,” ATTOM senior vice president Daren Blomquist said.

“Our analysis of sales prices at completed foreclosure auctions in 2016 shows the smallest average loss from the property’s previous sale price since 2007, with 29% of properties nationwide selling for more than the previous sales price at the foreclosure auction,” Blomquist said. “In a handful of markets such as Seattle, Los Angeles, Portland, San Francisco and San Diego, more than 50% of properties sold at foreclosure auctions in 2016 sold for more than their previous sale price.”

“The housing market hit several important milestones in 2016, with distressed sales at a nine-year low and home prices at a 10-year high, just barely below the pre-recession peak in 2006,” Blomquist said. “This was all good news for home sellers, who realized their biggest average profits since purchase nationwide in 2016.”

“Even distressed property sellers are benefitting from this hot seller’s market, with a record-high share of homes at foreclosure auction being purchased by third-party buyers rather than reverting back to the foreclosing bank,” he said.

Posted in Foreclosures, National Real Estate | 147 Comments

What bubble? What bust?

From the WSJ:

Home Price Growth Showed No Signs of Slowing in November, Case-Shiller Says

Home prices climbed strongly in November, as price growth showed no signs of slowing even after mortgage rates began to tick up during the month.

The S&P CoreLogic Case-Shiller Indices, covering the entire nation rose 5.6% in the 12 months ended in November, up slightly from the revised 5.5% year-over-year increase reported in October.

The 10-city index gained 4.5% over the year, up from 4.3% in October and the 20-city index gained 5.3% year-over-year, up from a 5.1% increase in October.

The rise matched the expectation of economists surveyed by The Wall Street Journal, who expected the 20-city index to rise 5.3%.

The hottest markets in the country remain concentrated in the Northwest, as many buyers priced out of the Silicon Valley area flee to secondary tech hubs. Seattle led the way with a 10.4% increase, Portland reported a 10.1% year-over-year gain and Denver had an 8.7% annual increase in home prices.

Home prices set a record in September and have continued climbing by more than 5% year-over-year since then.

“One can argue that housing has recovered from the boom-bust cycle that began a dozen years ago,” said David Blitzer, managing director at S&P Dow Jones Indices.

The volume of sales has cooled in recent months, as rising mortgage rates have collided with higher prices and a shortage of inventory. Purchases of previously owned homes slid 2.8% in December from a month earlier, the National Association of Realtors said last Tuesday. U.S. new home sales dropped by 10.4% in December, the Commerce Department said Thursday.

Case-Shiller offers a lagging indicator of the housing market and November’s numbers reflect only the beginning of a sharp increase in mortgage rates that began around the U.S. presidential election in November. Average rates for 30-year fixed mortgages rose from roughly 3.5% around Election Day to 4.32% at the end of December, according to mortgage company Freddie Mac. In the past week they averaged 4.19%, Freddie Mac said Thursday.

Posted in Housing Bubble, Housing Recovery, National Real Estate | 79 Comments

Not a bad December for NJ real estate

From Otteau Group:

MarketNEWS January 30, 2017 Edition

In December, the number of contract purchases by homebuyers exceeded the same month in the prior year for the 28th consecutive month, reflecting a 4% increase over December 2015. Considering the 28% increase (y-o-y) in December of 2015, home sales have increased by 33% over the past 2 years. This latest gain was the highest number of purchase contracts recorded in the month of December of the past 11 years.

For the full year of 2016, home purchase demand in New Jersey increased by 15%, which follows a 17% increase in 2015. This increase has however been largely concentrated in lower priced homes as first-time ‘Millennial’ buyers begin to transition from rentership to homeownership. By comparison, the number of luxury home sales priced at $2,500,000 and above declined by 4% in 2016. Reasons for this trend include a greater number of younger-age first home buyers, trade-down purchases by older-age empty-nesters, and relaxed mortgage lending standards which have reduced minimum down-payment amounts.

Shifting to the supply side of the equation, the supply of homes being offered for sale remains constricted, which is limiting choices for home buyers. The number of homes being offered for sale today in New Jersey has declined by nearly 6,000 (-13%) compared to one year ago. This is also about 35,000 (-48%) fewer homes on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 5.8 months of sales (non-seasonally adjusted), which is lower than one year ago when it was 6.9 months.

Currently, the majority (81%) of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices. Hudson County is presently experiencing the strongest market conditions in the state with just 3.2 months of supply, followed by Essex, Union, Middlesex, Bergen, Passaic and Somerset Counties, which all have fewer than 5 months of supply. All of the counties with an unsold inventory level equivalent to a supply of 12 months or greater are concentrated in the southern portion of the state including Atlantic (12.5) and Cumberland (12.9).

Demand for rental apartments remains strong in NJ with statewide occupancy rates being amongst the highest in the US. The statewide vacancy rate fell to 3.2% in Q4, which was 20 basis points less than in the prior quarter. The continued strength in occupancy has allowed for asking rents to continue to rise, reaching $1,462 monthly, which is an 8-year high in the state. This is a 3.8% increase over the past year, and a 0.7% increase from the prior quarter.

Regionally, the northern part of the state continues to have the highest asking rent, due to its proximity to Manhattan and the accelerating pace of new construction offerings, which typically command higher rental rates. In 2016, asking rents in the region saw an increase of 3.8%. The Central and Southern/Philadelphia regions have lower asking rents, $1,333 and $1,236, respectively. However, these regions also experienced impressive price increases as it relates to asking rents in 2016 with a 3.6% increase in the Central region, and 3.9% in the Southern/Philadelphia region.

Posted in Demographics, Economics, New Jersey Real Estate | 104 Comments

Luring millennials with sushi

From the WSJ:

Suburban Offices Woo Millennials With Food, Fitness and Fun

Suburban landlords trying to compete with sleek urban office settings are finding new ways to step up their game.

Property owners in New York’s suburbs are investing heavily to remake bucolic corporate campuses built during the 1980s and 1990s, adding glass facades for natural light-filled offices and retail space for restaurants, cafes and, in at least one case, a supermarket with specialty services.

They also are rolling out features such as modern fitness centers, bike-share programs, walking trails and spacious lobbies as spaces to socialize.

“It’s all about landlords trying to attract tenants, and tenants trying to attract millennial recruitment,” said Daniel Loughlin, broker lead of real-estate services firm JLL’s New Jersey office.

The suburban office market has lagged behind the New York City office market during this expansion, as preferences shifted to urban settings with restaurants, shops, nightlife and mass transportation, brokers and executives said.

But the suburbs continue to have a larger share of the region’s jobs than the city, noted Kenneth McCarthy, principal economist for real-estate services firm Cushman & Wakefield. As of December, 54.6% of the jobs in the New York metropolitan area were in the suburbs, according to his analysis.

As companies consolidate offices and look to take less space, landlords and investors are betting that overhauled, amenity-laden suburban office properties will attract large tenants already in the suburbs.

Simply being near a hip urban setting isn’t enough, said Michael J. DeMarco, president of real estate investment trust Mack-Cali Realty Corp. The Mack-Cali Business Center in Parsippany, N.J., has two hotels and a restaurant and is near downtown Morristown. Wegmans Food Markets Inc., a supermarket chain known for specialty services, is set to open a location on the edge of the office park this year.

Mack-Cali, which owns about 1.9 million square feet of space in the park, is planning to bring in a 70,000-square-foot fitness club, another hotel and four or five restaurants nearby.

“Food has become an incredibly big thing for millennials,” Mr. DeMarco said. “When you were younger, you’d go out and get a sandwich. Now you get sushi.”

Posted in Demographics, Economics, Housing Recovery, New Development, New Jersey Real Estate | 67 Comments

Rates scaring off buyers?

From the WSJ:

U.S. New Home Sales Drop Sharply in December

New home sales posted a steep decline in December, an indication that affordability challenges are beginning to cut into demand.

Purchases of newly built, single-family houses, which account for a small share of overall U.S. home sales, decreased 10.4% from November to a seasonally adjusted annual rate of 536,000 last month, the Commerce Department said Thursday.

That was the slowest monthly sales pace since February and the steepest one-month drop since March 2015.

Economists surveyed by The Wall Street Journal expected new home sales to decline 1.5%, to 583,000 sales.

The drop “was a shocker,” said David Berson, chief economist at Nationwide Insurance. He said home sales are often volatile in the winter months because of weather, however, and he still expects new-home sales to rise in 2017.

Data on new-home sales generally can be imprecise from month to month. December’s 10.4% sales decrease came with a margin of error of 12 percentage points.

In all, an estimated 563,000 new homes were sold in 2016, up 12.2% from a year earlier and the fifth straight year of sales growth. The annual figure indicates broad improvement in the market, even if sales of new homes remain well below where they were during the housing boom of the 2000s, when they topped 1 million a year for four years running.

“Home buyers are facing headwinds from higher mortgage rates and uncertainty about tax policy, but low existing inventory, near full employment, and rising wages are tailwinds that will continue to push new home sales higher in the year ahead,” Mr. McLaughlin said.

Posted in Mortgages, National Real Estate, New Development | 148 Comments

The Foreclosure State

From NJ Spotlight:

New Jersey Still Bogged Down in Foreclosures While Rest of Country Recovering

Housing markets have improved and foreclosure numbers dropped across the country since the Great Recession, but a decade on, New Jersey remains mired in a deep foreclosure swamp.

Statewide figures are significantly better than in 2009, the depth of the economic downturn. Yet some analyses cite Atlantic City as the worst housing market in the country, with Trenton not far behind. Overall, New Jersey continues to have the highest foreclosure rate in the country, according to real-estate data firms.

While many factors contribute to the problem, housing advocates point to a lack of leadership from state government as significant. Gov. Chris Christie, who used $75 million from national foreclosure-prevention aid to plug a budget gap in 2012, seldom mentions the issue.

“In the other states where we work, we have governors who have welcomed us and networked us to their housing agencies and counselors,” said a relative newcomer to the state scene, Jessica Brooks, a vice president at Boston Community Capital.

Nonprofit housing organizations like BCC work with lenders and borrowers to prevent foreclosures. Some for-profit groups also have sprung up, like Community Champions of Melbourne, Florida to fight the effects of foreclosure blight. But as the major federal foreclosure relief ends, a lack of state leadership in New Jersey means municipalities must find such partners themselves. Meanwhile, borrowers must remain alert to police their own mortgages, according to a top foreclosure defense lawyer.

Some other nonprofit groups, notably New Jersey Community Capital of New Brunswick and Newark, have bought troubled mortgages directly from federal agencies. BCC works differently, negotiating with banks to get better terms for borrowers whose job situation has improved but whose mortgages are still onerous.

“In New Jersey, no one from the state stepped up… and many of the community-based housing counselors here are struggling just to keep the lights on,” Brooks said.

Nationwide, foreclosures dropped under 1 million in 2016, the lowest figure in 10 years, according to ATTOM Data Solutions, formerly RealtyTrac, of Irvine, California. Yet that firm found New Jersey has the highest rate in the nation. And in December, when foreclosure starts were dropping 17 percent nationwide, they rose 13 percent here as the state’s economy continued to flounder, the firm found.

New Jersey has the highest inventory of homes in foreclosure at 2.8 percent, according to CoreLogic, another Irvine, California, real-estate analytics firm. That is greatly improved since the recession, but New York is the only other state above 2 percent, the firm reported.

New Jersey’s underlying economics are weak. While the U.S. Census Bureau found median household incomes rose 5.2 percent in 2015, the last year for which complete data are available, New Jersey was treading water with a 0.3 percent gain.

Home prices rose 7.1 percent nationally from November 2016 to November 2017 — or 4.7 percent when weighted for owner-occupied units as opposed to those being acquired by real-estate investors — but just 1.7 percent in New Jersey, according to CoreLogic.

Just like the other numbers, New Jersey’s trend in new foreclosure cases offers a mix of good news and bad. Fewer than 35,000 new cases were posted in the state courts’ public access system last year, half the amount of 2009 in the depths of the Great Recession. But that remains well above the 20,253 filed in 2005, itself on the high end historically.

That continued stream of new foreclosures, plus the lingering effects of Hurricane Sandy, provided reason for BCC to expand its efforts to New Jersey, according to Brooks. While the organization’s SUN program is “a drop in the bucket” compared to the problem, it provides a template of what can be done if lenders and borrowers work together on mortgages that are “underwater,” meaning they cost consumers more than the house’s current value, she said.

Throughout the foreclosure crisis, New Jersey consistently has had a high rate of troubled home loans, even as many borrowers got back on their feet financially after layoffs or business losses, Brooks noted. But the lack of state attention to the issue has contributed to low interest here in SUN, which currently is working with only about 60 New Jersey families, she said.

“New Jersey is the hardest place for us to work, and I feel it’s because there isn’t one state (leader) but many locally driven efforts,” Brooks said.

Posted in Foreclosures, New Jersey Real Estate | 43 Comments