The good old days really were

From Curbed:

How the housing market has become harder since 1988

Millennials facing today’s difficult housing market, and the challenges of buying their first home, can wistfully imagine the ’50s and dream of a time when government policy and growth made buying a home easier for much of the population. But, as a new comparison between today’s market in the late ’80s suggests, they don’t need to look quite that far back to find a more promising housing market.

The Harvard Joint Center for Housing Studies’ annual State of the Nation’s Housing report has provided a measuring stick for changes in the home and rental market in the United States, tracking the vibrancy of the rental and homebuilding market, and whether the nation was making progress on the serious issue of affordability.

On the 30th anniversary of the report’s first release, the authors created a comparison showing how the housing market of 1988 measures up against the market today. The chart below demonstrated the significant shifts of just the past few decades, and shows how things have gotten harder for younger buyers. It wasn’t all easy—interest rates hovered around 10.5 percent, for one thing—but the overall decrease in young adult homeownership reflects how things have shifted.

Overall, homes were smaller, but easier for the average American to afford (based on the cost-to-median-income comparison), and supply was much healthier. The student loan burden was also significantly smaller. This time capsule underlines the serious supply and cost challenges we face today, especially single-family homes, as well as the rise in the rent-burdened population.

Posted in Demographics, Economics, National Real Estate | 38 Comments

About time…

From CNBC:

Millennials moving out of Mom and Dad’s place, study shows

If you have an adult child living at home, you could become an empty nester sooner than you thought.

The number of 18- to 34-year-olds living with parents last year edged down from 2016, according to new data from CoStar Group, a commercial real estate information company in New York.

Last year, 31.5 percent of that age cohort were living with Mom and Dad, down slightly from more than 32 percent in 2016. While still higher than the long-term average of under 28 percent, it’s a downward trend the firm expects to continue due to the strength of the job market and overall economy.

“There are more individuals in that age cohort who are employed,” said Michael Cohen, director of advisory services at CoStar. “We also should see some wage gains in that age range. … Both of those things help.”

Cohen said the tight labor market — overall unemployment is about 3.8 percent — has led to a higher rate of workforce participation among younger adults.

“That gives me some degree of confidence that we’ll see some more momentum … in [young adults] moving out of Mom’s place,” Cohen said.

Additionally, as young adults progress in their careers, their incomes should rise with those job advancements.

Millennials generally face financial challenges that their parents did not as young adults. On top of carrying most of the $1.5 trillion in student loan debt, their wages are lower than their parents’ earnings when they were in their 20s.

A 2017 study of Federal Reserve data by advocacy group Young Invincibles showed that millennials earned an average of $40,581 in 2013. That’s 20 percent less than the inflation-adjusted $50,910 earned by baby boomers in 1989.

As it stands, more than a third (35 percent) of U.S. workers are millennials (defined as those age 21 to 36 in 2017), making them the largest generation in the labor force, according to the Pew Research Center.

Posted in Demographics, Economics, Employment, National Real Estate | 136 Comments

Will you pay? Will I pay? Who will pay? No idea yet.

From the Star Ledger:

Raise the sales tax? The business tax? Dueling Democratic budgets bring N.J. closer to a shutdown.

Democrats who control the state Legislature on Monday announced they’ll introduce a $36.2 billion budget that would raise taxes on New Jersey’s very largest corporations to the highest level of any state.

They also vowed to move forward with the spending plan even though Gov. Phil Murphy said he’d veto it earlier in the day.

The intensified hostility between the governor and state Legislature pushes New Jersey closer to the possibility of a second state government shutdown in two years. A balanced budget needs to be signed by June 30.

The “two houses are unified behind a budget,” state Senate President Stephen Sweeney said at an afternoon news conference at the Statehouse in Trenton. He assailed Murphy for being unwilling to compromise and described a recent meeting with the governor as a take-it-or-leave scenario.

“I was told, ‘It’s my budget. I like my budget. The things I’ll cut, I already cut. The things on the cutting room floor are on the cutting room floor. Pass my budget.’ That’s almost verbatim,” Sweeney, D-Gloucester, said.

State Assembly Speaker Craig Coughlin, who has largely avoided the public spotlight in recent months when it came to openly discussing the budget, confirmed the Legislature is at a deadlock with the new administration.

The Legislature’s plan does not include Murphy’s call for a nearly 3 percentage point increase on personal income over $1 million and a small increase in the sales tax.

Instead, it creates two new tiers for the Corporation Business Tax, levying the top current rate, 9 percent, on businesses with net income between $100,000 and $1 million, and then 11.5 percent on businesses with $1 million to $25 million, and 13 percent on businesses with income higher than $25 million. The surcharges would expire after two years.

The legislators project their new business tax proposal will generate $805 million for New Jersey, while Murphy’s two largest revenue raisers — the millionaires tax and the sales tax increase — are expected to raise more than $1.3 billion.

“We are being smart about how we raise taxes and by how much,” Sen. Paul Sarlo, D-Bergen, said in a statement announcing details of the spending plan.

He said the added taxes for corporations “making more than $1 million a year in New Jersey will be borne mostly by multinational corporations headquartered out of state and by foreign and out-of-state investors.”

Posted in Economics, New Jersey Real Estate, Politics | 157 Comments

Glimpse into the future: NJ coming for your house

What happens when NJ can’t afford to pay it’s own taxes anymore? Rampant (fraudulent?) mismanagement of assessments? Detroit offers a glimpse into what to come in NJ. From the Detroit News:

Study: Bad assessments prompt 10K Detroit foreclosures

One in 10 Detroit tax foreclosures between 2011 and 2015 were caused by the city’s admittedly inflated property assessments, a study by two Chicago professors has concluded.

Over-assessments causing foreclosure were concentrated in the city’s lowest valued homes, those selling for less than $8,000, and resulted in thousands of Detroit homeowners losing their properties, according to the study.

“The very population that most needs the city to get the assessments right, the poorest of the poor, are being most detrimentally affected by the city getting it wrong,” said Bernadette Atuahene, a law professor at the Chicago-Kent College of Law who has studied the impact of the city’s over-assessments on homeowners.

“There is a narrative of blaming the poor that focuses on individual responsibility instead of structural injustice. We are trying to change the focus to this structural injustice.”

The Wayne County treasurer foreclosed on about 100,000 Detroit properties for unpaid property taxes from 2011 through 2015, about a quarter of all parcels, as the city suffered the after-effects of population decline, the housing market crash and the Great Recession.

The study, co-authored by Christopher Berry, a professor at the University of Chicago Harris School of Public Policy, is the first to publicly estimate how many foreclosures were caused by the city’s chronic over-valuation of city property, the authors say.

Atuahene and Berry acknowledged many things trigger tax foreclosure, anything from an owner’s job loss to a death in the family.

They estimated the number of foreclosures caused by over-assessments in part by calculating the foreclosure rate if all properties were properly assessed. The study also controlled for properties various purchase prices, neighborhoods and sale dates.

Detroit officials, including Mayor Mike Duggan, have acknowledged the city’s assessments were inflated for years but said accuracy has improved with double-digit reductions over the last four years. The city completed a city-wide reassessment in 2016, required by the Michigan State Tax Commission. The city had not done a complete reassessment since the 1950s.

State regulators launched an investigation in 2013 citing a series in The Detroit News that exposed rampant over-assessments, tax delinquencies and mismanagement in the city’s Assessment Division.

Atuahene, also a member of the Coalition to End Unconstitutional Tax Foreclosures, said the group wants the city to provide “reparations” for families who forfeited their homes in tax foreclosures, like she and community activists have done for the Bonnett family.

The county foreclosed on Sonja Bonnett’s home in 2015 over $5,000 in unpaid taxes. Bonnett, 38, was purchasing the home on land contract for $20,000. Atuahene said Detroit taxed her home at a market value of $46,000.

The coalition recently partnered with a housing nonprofit to buy another foreclosed home and give it to Bonnett along with her husband and seven kids. They will celebrate her move in Thursday.

Bonnett said the city needs to repay homeowners who lost their homes because they could not pay tax bills that were artificially inflated by bad assessments.

“They wrongfully lost their houses,” Bonnett said. “It wasn’t just morally wrong. It was illegal.”

Posted in Economics, Foreclosures, New Jersey Real Estate, Politics, Property Taxes | 104 Comments

NJ not a place for startups

From WNYC:

New Jersey Wants to Stake a Claim in the Innovation Economy

New Jersey Governor Phil Murphy rarely misses an opportunity to point out the Garden State once was a hub for innovation — where Thomas Edison invented the phonograph and the incandescent light-bulb, and the birthplace of the transistor that paved the way for modern computers.

“This is a state that was a Silicon Valley before there was a Silicon Valley,” Murphy told a crowd of entrepreneurs at Propelify, a tech festival on the Hoboken Pier in May.

But now, New Jersey lags behind. A 2017 study by consulting firm McKinsey found the state “has only 15 incubators and business accelerators, compared with 375 in California and 179 in New York.” The report also found there aren’t as many young companies in the state, in part because of burdensome regulations, a high cost of doing business and public policy that hasn’t been friendly to startups.

Propelify is in its third year, and it was the first time a New Jersey governor took the stage. Festival founder Aaron Price said the tech community finally has a friend in Trenton, after being largely ignored by the Christie administration.

“He wouldn’t engage with us,” Price, who also served Murphy’s technology and innovation transition team, said. “It’s frustrating when you see an opportunity and someone who may help move the needle, and you can’t get that person to be responsive.”

Price said he’d like New Jersey to take bold steps to catch up for lost time.

“I would love to see us be the most drone-friendly state in the country,” he said. “I think with all the warehousing space, we could do something to attract and incentivize e-commerce.”

But critics, like Sheila Reynertson of New Jersey Policy Perspective, say there hasn’t been much to show for it.

“These subsidies programs have not delivered,” Reynertson said. “If they don’t there’s absolutely no penalty.”

Reynertson said that’s especially true for companies who were given tens of millions just to move a few miles within state. Like Panasonic, which got more than $100 million to move from Secaucus to Newark. She said the focus and the funds should go to small businesses, especially startups that have a chance to grow.

“That’s where you get your real kick in the economy. Supporting small businesses and people who are bringing new, fresh ideas to New Jersey,” she said.

Posted in Demographics, Economics, Employment, New Development, New Jersey Real Estate | 228 Comments

Short term looking good for NJ, long term? Ummm…

From the APP:

NJ jobs: Companies hiring, and this is why you’d better grab a job now

New Jersey employers are recruiting aggressively to fill job openings, but clouds are beginning to build, which could force them to temper their enthusiasm, a new economic report shows.

The U.S. Conference of Mayors report found an economy performing at its strongest level in a decade. But higher oil prices, rising interest rates and the fading impact of federal tax cuts could slam on the brakes for the Garden State.

The outlook was from the mayors’ annual  report that looked at data from 2017 and 2018 and forecasts through 2022. It was expected to be presented Friday at the mayors’ annual meeting in Boston.

New Jersey has been enjoying a rare dose of good economic news.

The suburban state, long hurt by the migration of the millennial generation to cities, has shown signs of life. The past year, it added 58,600 jobs. And its employment growth rate of 1.4 percent ranked 18th nationwide, beating its three neighbors, according to data from the U.S. Bureau of Labor Statistics.

Employers appear to be in good spirits. A survey by the New Jersey Bankers Association found 42 percent said the state’s economic health is “good,” compared with 15 percent who said the same two years ago.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 103 Comments

Last cheap house at the shore?

From the Star Ledger:

While there is a significant amount of hype around an Atlantic City revival in 2018, that upward swing hasn’t happened just yet. You know what that means? It is still relatively inexpensive to buy real estate there.

In fact, in Realtor.com’s annual ranking of the most affordable beach towns, the real estate listings website ranked Atlantic City as the fourth most affordable one in the country, with a median home listing price of $229,800.

Realtor.com mentions that the casino town has had a litany of recent rough patches, ranging from the destruction that Hurricane Sandy caused to some of the most prominent casinos closing down.

“People walked away from their properties, [and] foreclosures and short sales went up,” Todd Gordon, a real estate agent at Hartman Home Team, told the website.

But they do make the case that Atlantic City is in the midst of a rejuvenation, while also already having desirable qualities, like an iconic boardwalk and a wide beach.

“Over the past year, the region has seen a surge in development. Look no farther than the $500 million renovation of the former Trump Taj Mahal, which will reopen later this month as the new ‘n’ improved Hard Rock Hotel & Casino,” Realtor.com wrote. “New projects such as this have helped to give oceanfront condo buying a lift. The rock-bottom prices are a big draw for buyers from Philadelphia and New York City.”

Zillow’s median home value index offers an even starker look at what real estate is worth in Atlantic City. According to Zillow, the median home value in Atlantic City is $80,400, which is up more than 40 percent from last year. In comparison, the median home value in popular Shore town Point Pleasant is $364,200.

Posted in Shore Real Estate | 154 Comments

How far can home prices go?

From CNBC:

US house prices are going to rise at twice the speed of inflation and pay: Reuters poll

An acute shortage of affordable homes in the United States will continue over the coming year, according to a majority of property market analysts polled by Reuters, driving prices up faster than inflation and wage growth.

After losing over a third of their value a decade ago, which led to the financial crisis and a deep recession, U.S. house prices have regained those losses — led by a robust labor market that has fueled a pickup in economic activity and housing demand.

But supply has not been able to keep up with rising demand, making homeownership less affordable.

Annual average earnings growth has remained below 3 percent even as house price rises have averaged more than 5 percent over the last few years.

The latest poll of nearly 45 analysts taken May 16-June 5 showed the S&P/Case Shiller composite index of home prices in 20 cities is expected to gain a further 5.7 percent this year.

That compared to predictions for average earnings growth of 2.8 percent and inflation of 2.5 percent 2018, according to a separate Reuters poll of economists.

U.S. house prices are then forecast to rise 4.3 percent next year and 3.6 percent in 2020.

“We are not seeing a temporary phenomenon. House prices have been outrunning family incomes for several years in the U.S. and while demand has cooled off a bit, the supply side is still very tight,” said Sal Guatieri, senior economist at BMO Financial Group.

“I think house prices will continue to outrun family incomes for at least another year and it will take some time for demand to slow and to some extent supply to increase.”

Posted in Demographics, Economics, Employment, Housing Bubble | 138 Comments

Housing market got it’s swimmies back

From CNBC:

US homeowners gained $1 trillion in the last year as their housing values jumped

Fast-rising home prices may be a roadblock for buyers, but they are putting some homeowners on Easy Street. As home prices rise, so does the percentage of home equity for those owners with a mortgage.

Home equity jumped 13.3 percent in the first quarter of this year compared from a year earlier, according to CoreLogic. For the average borrower, that translates to $16,300 in additional home equity gained during the year, or a collective $1.01 trillion. That is the biggest gain in four years.

Despite the big value gains in the past few years, 2.5 million borrowers or 4.7 percent of all homeowners with a mortgage are still underwater on their home loans, meaning they owe more than the homes are currently worth. However, in the first quarter of this year, 84,000 borrowers came up from underwater, regaining equity.

The negative equity rate fell 21 percent from a year earlier, when just over 3 million borrowers were underwater. Negative equity peaked in 2009 at 26 percent of all mortgaged properties.

“Home-price growth has accelerated in recent months, helping to build home-equity wealth and lift underwater homeowners back into positive equity, the primary driver of home equity wealth creation,” said Frank Nothaft, CoreLogic’s chief economist. “The CoreLogic Home Price Index grew 6.7 percent during the year ending March 2018, the largest 12-month increase in four years.”

Posted in Economics, Foreclosures, Housing Recovery, National Real Estate | 77 Comments

Bankers not happy with Murphy

From NJBIZ:

Bankers: Economy weakening under Murphy

A majority of the state’s local bankers say New Jersey’s economy would worsen under policies proposed by Gov. Phil Murphy.

In New Jersey Bankers Association’s annual survey on the economy, almost 69 percent of respondents expect the state economy to weaken or decline if proposals are enacted such as a “millionaires tax” and raising the sales tax back to 7 percent.

NJBA surveyed bankers from 92 local banks in its membership. The survey was conducted with Rutgers University’s Bloustein School of Planning and Public Policy.

Despite the negative view of the Murphy administration, a majority of the bankers said the state’s economy is currently strong. Nearly 42 percent of respondents rated the state’s current economy as “good,” compared to just 15 percent in 2016. A record 10 percent of respondents rated the state’s economy as “excellent.”

Some 75 percent of the respondents saw the U.S. economy improving under the policies of President Trump, almost as many said those same policies will hurt New Jersey’s economy – most notably this year’s federal tax reforms that limit property-tax deductions.

Posted in Economics, New Jersey Real Estate, Politics | 181 Comments

NJ Population Growth & Decline Visualized

From the Star Ledger:

This county is booming, but most Shore areas haven’t recovered their mojo. Here’s the breakdown

Posted in Demographics, Economics, New Jersey Real Estate | 196 Comments

What the hell do accountants know about running business in NJ anyway…

From NJBIZ:

State CPAs take dim view of economic future

New Jersey’s accountants do not have a favorable outlook on the state’s economy.

In a survey of 786 CPAs in the state conducted by the New Jersey Society of CPAs, 31 percent believe the state’s economy will get significantly worse under Gov. Phil Murphy, while 44 percent said it will get “marginally worse.”

Just 14 percent said the economy will improve.

Overall, nearly 55 percent of the respondents assessed the state’s current economy at “fair,” compared to 28 percent who said it is “good,” and 17 percent who said it’s “poor.” Only 1 percent rated the current economy as “excellent.”

Posted in Economics, Employment, New Jersey Real Estate, Property Taxes | 25 Comments

Nothing left to buy?

From CNBC:

Pending home sales fall more than expected as costs for buyers rise

Potential homebuyers out shopping in April may have been spooked by a sharp rise in mortgage interest rates. Pending home sales, which measure signed contracts to buy existing homes, fell a wider-than-expected 1.3 percent compared to March, according to the National Association of Realtors. It was the third lowest level of the past year.

Pending sales were 2.1 percent lower compared to April of 2017 the fourth straight month showing an annual decline. The Realtors point, again, to the continuing supply crisis in housing today.

“Feedback from Realtors, as well as the underlying sales data, reveal that the demand for buying a home is very robust. Listings are typically going under contract in under a month, and instances of multiple offers are increasingly common and pushing prices higher,” said Lawrence Yun, chief economist for the NAR in a release. “The unfortunate reality for many home shoppers is that reaching the market will remain challenging if supply stays at these dire levels.”

Weakening affordability is going hand-in-hand with short supply, especially on the lower end of the market. As home prices continue to rise, potential buyers have less and less wiggle room in their wallets.

Mortgage rates jumped sharply in April, with the average rate on the popular 30-year fixed hitting its highest level in seven years. Buyers out shopping were having to recalculate their budgets for homes.

Buyers are also seeing higher prices for gas, which, while not a major factor for everyone, may weigh on consumer confidence. Buying a home is usually the largest investment most people ever make, and confidence is therefore key.

“The combination of paying extra at the pump, while also needing to save more for a down payment because of higher rates and home prices, may weigh on the psyche of those looking to buy,” said Yun.

Regionally, pending home sales in the Northeast were unchanged for the month and 2.1 percent lower than one year ago.

In the Midwest, sales decreased 3.2 percent monthly, and were 5.1 percent lower than April 2017.

Pending sales in the South declined 1.0 for April but were 2.7 percent higher than last April. Sales in the West dropped 0.4 percent monthly and were down 4.6 percent annually.

Posted in Demographics, Economics, National Real Estate | 32 Comments

Another Strong Spring Market

From the Otteau Group:

MarketNEWS May 31, 2018 Edition

NJ YTD Purchase Contracts Back Up

After home sales recorded a 6% retraction in March, New Jersey recorded more than 11,000 purchase contracts during the month of April equating to a 7% increase compared to the same month last year. As a result, the number of year-to-date purchase contracts (January-April) in New Jersey is up marginally by 1%, or roughly 425 contracts. While misinformation about the newly implemented tax reform is partially to blame, statewide housing inventory is also holding back sales, especially for homes priced below $400,000 where there is only 3 months of supply.

While the number of year-to-date home sales has increased by 1% overall, that is not the case for all price ranges. Contract activity for homes priced under $400,000 has declined by 1% due to supply shortages, with unsold inventory having dropped by 15% year-to-date. At the opposite end of the spectrum, contract activity for luxury priced homes over $2.5-Million has increased by 15%, which is somewhat misleading, given the smaller sample size of sales within this price point.

Shifting to the supply side of the equation, inventory remains restricted, which is limiting choices for home buyers. The number of homes being offered for sale today in New Jersey has fallen to its lowest point since 2005, having declined by 3,200 (-7%) over the past year. This is also 44% less than the amount of homes (32,000 fewer) on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to just 3.7 months of sales (non-seasonally adjusted), which is lower than one year ago, when it was 4.2 months.

Currently, all of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices. Middlesex County has the strongest market conditions in the state with just 2.5 months of supply, followed by Union, Essex, Hudson, Passaic, Monmouth, Mercer and Burlington Counties, which all have fewer than 3.5 months of supply. The counties with the largest amount of unsold inventory (5 months or greater) are concentrated in the southern portion of the state including Cumberland (5.0), Atlantic (5.9), Salem (6.1) and Cape May (6.5), however, these counties have shown vast improvement and are exhibiting strengthening conditions.

Demand for rental apartments continues to expand in NJ with statewide occupancy ratesbeing among the highest in the US. Statewide vacancy increased slightly from the prior quarter, rising by 10 basis points to 3.6%. The rise in vacancy is attributable to the rapid growth in pipeline supply, which has increased from 6,400 apartments in 2008 to 30,000 today. Nationally, the average vacancy rate increased by 20 basis points to 4.7%. Still, statewide and national vacancy rates remain well below their 2010 peak having fallen by 160 bp and 330 bp, respectively.

Consistent with national trends, the homeownership rate in New Jersey declined following the onset of the Great Recession. More recently however, the State’s homeownership rate has risen to 64.3% in 2018.Q1, due largely to increased market participation by Millennial homebuyers, which is favorable to housing development. Still, the homeownership rate at both the state and national levels have declined by 10% and 7% from their respective peaks. Because of this shift, there are approximately 231,000 additional renters in New Jersey.

The percentage of delinquent mortgage loans in New Jersey that are 90+ days past due fell by 10 basis points from the prior month, falling to 3.3%. Most of the nation has seen a decline in delinquency rates over the past year apart from storm-ravaged states like Florida and Texas whose delinquency rates have increased by 100% and 50%, respectively, over the past 6 months. Florida leads the nation with 5% of mortgages being 90+ days delinquent. Rounding out the list of states with the highest delinquency rates are New York (3.7%), New Jersey (3.4%), Louisiana (3.3%), Mississippi (3.3%), Maine (2.7%), Texas (2.6%) and Delaware (2.5%).

New Jersey foreclosure filings in 2017 recorded a decline (-5%) over the prior year, falling from 74,200 to 70,150. This is the second consecutive annual decline that the state has seen since 2010. Based upon year-to-date data (January-April), foreclosures are projected to decline further, falling by -8% in 2018, with filings estimated to be about 64,350. The greatest concentrations of mortgage delinquencies in New Jersey continue to be in the state’s urban and rural places, such as Warren and Atlantic Counties who lead the state in the ratio of foreclosure actions-to-housing units.

Posted in Demographics, Economics, Employment, Foreclosures, Housing Recovery, New Jersey Real Estate | 137 Comments

But are we ready to change?

From the comments the other day, but good enough to get top page billing. From the NY Times:

As Office Parks Empty, Towns Turn Vacancies Into Opportunities

Perched off a busy road in northern New Jersey with sweeping vistas of a vast reservoir sits a new relic of the suburban panorama: the international headquarters of Toys “R” Us slogging through its final days after the company announced that it would be shutting down for good.

The decline of the toy giant prompted wistful recollections across the country of the increasingly bygone era of brick-and-mortar retail, but concern in this town quickly turned to the exoskeleton that the company leaves behind — a roughly 200-acre plot with multiple office buildings scattered across the land that once housed as many as 1,600 workers.

While the worry locally is focused in part on what an extended vacancy might mean for the town’s tax base, the fate of the once thriving headquarters illustrates a much broader reality confronting many towns across America: the era of the suburban office parks is coming to an end.

Outside Silicon Valley and other areas that have benefited from the technology boom, what were once the lifeblood of many suburbs have now become eyesores, forests of empty glass and concrete boxes that communities must figure out what to do with.

“The model as it played out in New Jersey is now seemingly obsolete,” said Louise A. Mozingo, the chairwoman of the department of landscape architecture and environmental planning at University of California, Berkeley.

Suburban office parks have lost their luster for a variety of reasons, including a growing preference among younger workers for life in more dynamic urban centers than in sometimes staid and sleepy suburbs. And the rapid pace of technological advancement has made the need for many clerical and processing jobs and the real estate to house those workers increasingly obsolete.

But it was the recession and its aftermath that sounded the death knell for many suburban parks; New Jersey lost about 100,000 office-related jobs since 2008, according to James W. Hughes, a professor at Rutgers University. By 2010, the majority of the state’s suburban office inventory was between 20 and 30 years old, built during a much more primitive information technology era.

“So, not only do we have a lot of obsolete space, but we also have workplace densification occurring at the same time,” said Mr. Hughes, referring to the move by many companies toward smaller, shared work spaces. “That’s the dilemma that really burst onto the scene maybe three years ago or four years ago.”

In the 1980s, about 90 to 100 million square feet of suburban office space was built in New Jersey, accounting for 80 percent of the state’s inventory, Mr. Hughes said. By contrast, only 50 percent of the national suburban office inventory was built in the same period.

New Jersey currently has over 6.5 million square feet of vacant office park space, according to CoStar, a commercial real estate company. In northern New Jersey, 23 percent of office space is listed as available, which includes vacant spaces and buildings that are emptying out as leases end, according to Newmark Knight Frank, a commercial real estate firm.

But vacant office parks are important to municipal coffers because they remain on property tax rolls. Yet the longer they sit vacant, the faster their assessments plummet, forcing municipalities to find other sources of revenue and in some cases raise real estate taxes in a state that already has the country’s highest property taxes.

“None of these millennials want to work in a corporate campus in western Morris County and have to commute long distances to meet their friends at a bar,’’ said Carl Goldberg, a developer who has been vocal about the redevelopment of office parks. “It’s just not the lifestyle that they’re interested in.”

In Wayne, where the Toys “R” Us logo still welcomes passers-by to the campus, Mayor Christopher P. Vergano said he believed the site would prove desirable, though possibly as something far different.

“I think there will be change,’’ he said, “only because we don’t see big corporate tenants buying 200-acre properties anymore.”

Posted in Demographics, Economics, Employment, New Development, New Jersey Real Estate | 158 Comments