No homes left to sell?

From CNBC:

Tight supply, rising prices weigh on US home sales

U.S. home sales unexpectedly fell in January, leading to the biggest year-on-year decline in more than three years, as a persistent shortage of houses pushed up prices and kept first-time buyers out of the market.

The National Association of Realtors said on Wednesday that existing home sales dropped 3.2 percent to a seasonally adjusted annual rate of 5.38 million units last month. It was the second straight monthly decline and reflected decreases in all four regions.

Economists polled by Reuters had forecast existing home sales rising 0.9 percent to a rate of 5.60 million units in January.

Existing home sales, which account for about 90 percent of U.S. home sales, declined 4.8 percent on a year-on-year basis in January. That was the biggest year-on-year drop since August 2014. The weakness in home sales is largely a function of supply constraints rather than a lack of demand.

House price increases have outstripped wage growth, which has remained stuck below 3 percent on an annual basis despite the unemployment rate being at a 17-year low of 4.1 percent.

While the number of previously-owned homes on the market rose 4.1 percent to 1.52 million units in January, housing inventory was down 9.5 percent from a year ago. That was the lowest inventory for January on record. Supply has declined for 32 straight months on a year-on-year basis.

At January’s sales pace, it would take 3.4 months to exhaust the current inventory, up from 3.2 months in December. A six-to-seven-month supply is viewed as a healthy balance between supply and demand.

The median house price increased 5.8 percent from a year ago to $240,500 in January. That was the 71st consecutive month of year-on-year price gains.

Posted in Demographics, Economics, Employment, National Real Estate | 1 Comment

Governor who?

From NJ Spotlight:

SWEENEY FORGES AHEAD WITH STATE TAX POLICY REVIEW, NO INPUT FROM MURPHY TEAM

Major changes to the federal tax code recently enacted in Washington, D.C. may have significant and unexpected impact on the state economy, according to state lawmakers — particularly in a high-cost place like New Jersey. That’s why Senate President Steve Sweeney has ordered a broad review of the state’s entire tax and fiscal policy landscape, and he’s named well-known outside policy experts to participate.

Sweeney (D-Gloucester) yesterday named two dozen members of a special working group, made up of both lawmakers and these experts; they’ve been charged with coming up with ways to help New Jersey deal with any economic challenges the federal tax-code overhaul poses.

But that’s not all. Other areas will be subject to the group’s discussions, which will primarily only be held in private, according to Sweeney’s announcement. The group will look at everything from how New Jersey funds local schools and other government services, to what can be done to control high property taxes and stop residents from leaving the state for cheaper alternatives.

The effort will be led by state Sens. Paul Sarlo (D-Bergen) and Steve Oroho (R-Sussex), and Assemblyman Lou Greenwald (D-Camden). In addition to several other lawmakers from both parties, the working group also will include more than a dozen outside policy experts, including economist Mark Zandi of Moody’s Analytics and former state Treasurer Feather O’Connor Houstoun.

The formation of the working group comes just weeks before Gov. Phil Murphy is expected to put forward his first state budget message to a joint session of the Legislature. It also comes as Murphy and Sweeney have publicly disagreed about whether the new governor should go forward immediately with his plan to hike New Jersey’s top-end income tax rate on earnings over $1 million to bring in more revenue to fund core priorities like K-12 education and public-employee pensions.

In fact, such working groups are usually organized by governors, and noticeably absent from the panel assembled by Sweeney — who once considered running for governor himself — is a member of Murphy’s administration. It remains to be seen exactly how receptive the governor will be to any of the group’s findings once they are released; Murphy’s press secretary did not respond to requests for comment yesterday.

Sarlo stressed that this new effort is putting “everything on the table,” and Greenwald promised it would not be just an “academic exercise.” Oroho suggested the group’s eventual policy proposals would help the state deal with a potential crisis.

“We are facing a crisis — a crisis of competitiveness, a crisis in housing values, and a crisis that undermines our prospects for future economic growth,” Oroho said.

In addition to Zandi and Houstoun, the experts from outside the Legislature are Dr. Joel Naroff, Naroff Economic Advisers Inc.; Dr. Michael Lahr, Rutgers Economic Advisory Service; Dr. Ray Caprio and Marc Pfeiffer, Rutgers Local Government Research Center; Richard Keevey, Rutgers University Bloustein School of Planning & Public Policy, and Princeton University’s Woodrow Wilson School; Dr. Henry Coleman, Rutgers University Bloustein School of Planning & Public Policy; Dr. Donald Moliver and Peter Reinhart, Monmouth University’s Kislak Real Estate Institute; Dr. Spencer Levy, CBRE Group Inc.; Ralph Thomas, New Jersey Society of Certified Public Accountants; Frank Chin and Ray Kljajic, American Public Infrastructure Inc.; Kurt Stroemel, H&RHS Financial Services; and Jerry Maginnis, accounting executive in residence at Rowan University.

“Blowing up the system, and putting it back together in a way that makes it work better, requires total discussion amongst people that can speak freely, and not be concerned that they’re going to be criticized until we get a product done,” Sweeney said.

Posted in New Jersey Real Estate, Politics, Property Taxes | 67 Comments

NJ’s tax scheme … will fail

From the Star Ledger:

Here’s how N.J. lawmakers propose to save your property tax break

The state Senate began its work Thursday devising a way to prevent New Jersey taxpayers from losing a popular property tax break as a result of federal income tax reform.

Following the mold of other high-tax states looking to skirt the new $10,000 cap on state and local tax deductions taxpayers can claim, the state Senate Budget and Appropriations Committee advanced a bill allowing municipalities to set up charitable funds to substitute donations for property tax payments.

Under the scheme, taxpayers would make donations to the charitable fund and receive a credit against their property tax bill. They could in turn claim the payment as a charitable contribution, which is not subject to a cap.

It’s a maneuver championed by Gov. Phil Murphy, a Democrat who urged the Democratic-controlled state Legislature to act.

While local officials don’t have to wait for the state to pass a law before establishing charitable support funds, Murphy said he believed they would be on stronger footing with it.

The bill would give property owners a 90 percent tax credit — ostensibly to stand up to IRS scrutiny — for their contribution to the town, county or school district’s charitable support fund. And if an owner’s tax credits exceed their net property taxes owed, the fund would roll the credits forward for up to five years.

State Sen. Steve Oroho, R-Sussex, warned state lawmakers may be sending taxpayers down a risky path, as it’s unclear whether the Internal Revenue Service will bless these moves, which resemble a quid pro quo.

“The way the charitable contributions work is you’ve got to give something and get nothing in return,” Oroho said. “I’m not really sure how we can argue that you’re not getting anything in return.”

In fact, U.S. Treasury Secretary Steven Mnuchin last month called the idea, also considered by California, “ridiculous.”

Posted in New Jersey Real Estate, Politics, Property Taxes | 167 Comments

At what point do we say “recovered” and at what point do we say “bubble”?

From CNBC:

Home Prices Hit Records in Almost Two-Thirds of U.S. Cities

Home prices jumped to all-time highs in almost two-thirds of U.S. cities in the fourth quarter as buyers battled for a record-low supply of listings.

Prices for single-family homes, which climbed 5.3 percent from a year earlier nationally, reached a peak in 64 percent of metropolitan areas measured, the National Association of Realtors said Tuesday. Of the 177 regions in the group’s survey, 15 percent had double-digit price growth, up from 11 percent in the third quarter.

Home values have grown steadily as the improving job market drives demand for a scarcity of properties on the market. While prices jumped 48 percent since 2011, incomes have climbed only 15 percent, putting purchases out of reach for many would-be buyers.

Sales of previously owned homes, including single-family houses and condos, increased 4.3 percent to a seasonally adjusted rate of 5.62 million in the fourth quarter, the Realtors said. At the end of December, only 1.48 million existing homes were available for sale, 10.3 percent less than a year earlier.

Posted in Economics, National Real Estate | 121 Comments

Comp Killer – Saddle River Edition

From Variety:

Mary J. Blige Faces Huge Loss on New Jersey Estate

Mary J. Blige is riding a well-deserved professional crest with two Oscar nominations — one for supporting actress and one for original song, both for the acclaimed Netflix period drama “Mudbound” — but the R&B/hip-hop icon is also looking at a heart-stopping financial loss on a lavish, gated estate in Saddle River, N.J., that she bought in 2008 for $12.3 million and now has for sale at just under $7 million. Even if Blige manages to land a full-price buyer, she’s still faced with a pocketbook-punishing loss of more than $5.3 million, not including carrying costs, improvement expenses and real estate fees.

The ersatz French Renaissance chateau, about 25 miles outside Midtown Manhattan, measures in at more than 13,000 square feet, according to tax records, with a total of eight bedrooms and nine full and three half bathrooms. Four principal bedrooms, all en suite, include a sprawling owners’ complex replete with sitting room, fireplace, two walk-in closets and two bathrooms. The three-story, elevator-equipped mansion additionally provides an en suite staff bedroom just off the kitchen, a one-bedroom, one-bath guest apartment over the four-car garage and a two-bedroom, one-bath staff suite with full kitchen and living room in the basement.

The nine-time Grammy winner, who owes millions to the IRS in unpaid taxes and forks over $30,000 per month in spousal support to her estranged husband, Martin “Kendu” Isaacs, has long owned a substantially smaller, 6,200-square-foot contemporary residence in Cresskill, N.J., that she scooped up in 2001 for $1.95 million.

Posted in Comp Killer, New Jersey Real Estate | 60 Comments

Finally the end of cheap mortgages?

From CNBC:

Here’s how a 5% mortgage rate would roil the US housing market

Mortgage rates are now at their highest level in four years and poised to move even higher. The timing couldn’t be worse, as the usually busy spring housing market kicked into gear early this year amid higher home prices and strong competition for a record low supply of homes for sale.

Add it all up, and affordability is starting to hurt.

The average rate on the popular 30-year fixed is now right around 4.50 percent, still low when looking historically, but buyers over the past six years have gotten more used to rates in the 3 percent range. Mortgage rates have not been at 5 percent since 2011.

A 5 percent rate would cause more than a quarter of today’s homebuyers to slow their plans, according to a Redfin survey of 4,000 consumers at the end of last year. Just 6 percent said they would drop their plans to buy altogether. About one-fifth of consumers said 5 percent rates would cause them to move with more urgency to purchase a home, fearing rates would rise even further. Another fifth said they would consider more affordable areas or just buy a smaller home.

Despite rate concerns, the bigger issue for buyers is changes to tax laws that had lowered the cost of homeownership. Specifically, the deduction on property taxes is now limited to $10,000. While that does not affect homeowners in the majority of the country, it does hit those in high-cost states like New York, New Jersey and Illinois, and those in higher-priced housing markets like California.

Posted in Economics, Mortgages, National Real Estate | 137 Comments

Looking good, Billy Ray! Feeling good, Louis!

From HousingWire:

Americans gain confidence in housing as home prices rise

Americans continue to gain confidence in the housing market, not just despite, but even because of rising home prices, according to the latest Home Purchase Sentiment Index from Fannie Mae.

Over the past year, home prices have continued to rise, threatening affordability, and housing inventory is falling dangerously low. However, despite these setbacks, Americans continue to hold a positive view of the housing economy.

Fannie Mae’s HPSI rose 3.7 points in January to 89.5, reversing the decrease seen the month before and an all-time survey high. This rise is due to increases in five of the six HPSI components.

The share of those who said now is a good time to buy a home increased three percentage points to 27% in January, reversing some of last month’s decline. The share of those who say now is a good time to sell a home also increased, rising four percentage points to 38%.

“Over the past year, continued home price growth has helped spur a sizable increase in the net share of consumers who say it’s a good time to sell a home but also a modest weakening in the net share who say it is a good time to buy,” said Doug Duncan, Fannie Mae senior vice president and chief economist.

Americans are increasingly expecting home prices to rise as those who said they expect home prices to go up over the next 12 months increased eight percentage points in January to 52%, a new survey high. But even as they expect home prices to rise, the share of Americans who say mortgage rates will fall in the next 12 months increased two percentage points to -50%.

When it comes to personal finances, the share of Americans who say they are not concerned about losing their job increased five percentage points to 73% and the share who say their household income is significantly higher than it was 12 months ago remained flat at 16%.

Posted in Demographics, Economics, Employment, National Real Estate | 61 Comments

Net net … nothing?

From the Washington Post:

Predictions of a crash in housing prices have not come true

Were fears overblown that changes to the federal tax law would trigger plunging home values?

You might recall the scary predictions that began coming last fall from the realty industry and some independent economists: Cutting tax benefits for homeowners would inevitably lead to declines of 4 to 10 percent in home prices, and maybe even more for upper-bracket properties in high-tax areas.

So how are those dire warnings holding up? It’s still early in the game for hard statistical answers. But it’s not too early to gather anecdotal evidence on whether buyers — citing higher tax burdens — are pushing asking prices downward and whether sellers are caving or resisting.

To get answers, I contacted realty agents and economists who keep a close eye on consumer behavior in markets around the country. The consensus was summed up best by Ralph McLaughlin, chief economist of Trulia, a San Francisco company that tracks prices and local market trends in hundreds of communities.

Price declines are nowhere in sight yet and cannot be totally ruled out, he said, but “we think the potential negative impacts [of the tax bill] will be muted by the likely fact that most households will actually have more money in their bank accounts at the end of the year because of the tax plan.”

That, plus the ongoing shortage of homes for sale, strong buyer demand, low unemployment and growth in wages, may offset any whatever tax-deduction concerns. Cheryl Young, senior economist at Trulia, cited the latest Standard & Poor’s Case Shiller index, which documented steadily rising prices in most markets.

Noah Goldberg, an agent with Redfin in Jersey City, says clients “were waiting on the sidelines at the end of the year due to the uncertainty around tax reform.” But “now that [they’ve] had a chance to calculate the monthly costs, income taxes and deductions,” they’re streaming back. Some buyers have told Goldberg that the lower federal income taxes they’re likely to owe will offset the real estate deductions they’re likely to lose. So the net effect could be a wash.

Chicago real estate broker Alexis Eldorrado says some sellers of upper-bracket properties have become more flexible on their initial asking prices, knowing that buyers may come in with Excel spreadsheets detailing how their tax bills are going up. Jill Eber, a broker in Miami, told me that tax law may actually be driving some owners from high-tax states to tax-friendlier Florida.

“We’re hearing from more people from New York, the Northeast and California than usual,” she told me in an interview, and some are specifically citing the tax bill as a reason for considering switching domiciles. What impact that might have on pricing isn’t yet clear, however.

Posted in Demographics, Economics, Employment, Housing Recovery, Politics | 211 Comments

Downtown JC going to pay up

From the Jersey Journal:

10 homes socked with huge tax hikes thanks to Jersey City reval

Jersey City is conducting its first complete property revaluation since 1988 and the new assessments have started rolling in.

Appraisal Systems, the company hired to oversee the process, has been uploading the new assessment information online, thousands of properties at a time. The company expects to release a new wave of assessments each week for the next month.

Revals are intended to square each property’s assessment — the value on city tax rolls — with its true value. Because many properties have not been assessed since 1988, the average city property is assessed at less than 24 percent of its true value.

As expected, the city’s Downtown, where property values have soared since the last reval, is home to many of the large assessment hikes — and tax increases. Excluding tax abated properties, the 500 properties with the highest tax hikes have Downtown addresses.

Property owners are still able to make informal appeals to Appraisal Systems and then formal appeals to the Hudson County Board of Taxation, so the new assessments are still only proposed. And there is no 2018 budget yet for the city, county or school district, so the tax hikes are tentative as well.

The city is predicting a new tax rate of 1.62 per $100 of assessed value.

$36,066 tax hike: 203 Washington St. (middle), 5,972 square feet
Current assessment: $175,000
New assessment: $3,068,900
Current taxes: $13,650
New taxes: $49,716

$29,480 tax hike: 104 Morris St. (right), 4,488 square feet
Current assessment: $125,000
New assessment: $2,421,600
Current taxes: $9,750
New taxes: $39,230

$29,115 tax hike: 69 Sussex St., 4,696 square feet
Current assessment: $135,000
New assessment: $2,447,200
Current taxes: $10,530
New taxes: $39,645

Posted in New Jersey Real Estate, Property Taxes | 74 Comments

“Homeownership has lost its allure”

From the Star Ledger:

Who wants to buy a home in New Jersey? And what happened to the American Dream

It used to be part of the American Dream — the cute house in the suburbs with a garage and a big yard for the kids.

Now, however, more and more New Jersey residents are opting out.

In the last ten years, there are fewer homeowners and more renters in New Jersey, according to an analysis of Census housing data.

Of the 3.1 million housing units, about 64.1 percent are owned by their occupants while 35.9 percent are rented – about 2.5 percentage points less than it was about 10 years ago.

In terms of numbers, there are now about 318,000 new residents living in rental units in New Jersey and about 156,000 fewer living in a purchased home.

The Census compares the 2012-2016 five-year American Community survey to 2007-2011 and provides a snapshot on how homeownership and rental rates have changed in the last decade.

A closer look at county data shows that all counties in New Jersey, except for Cape May, have lost homeowners. Atlantic, Passaic, Hudson and Salem counties lost more than four percent of homeowners over the last 10 years.

If you add in rising house prices and property taxes, it has pushed more and more people out of homeownership, according to Riordan.

Millenials who are just getting into the age of considering homeownership have been especially affected.

“They are saddled with [student loan] debt.” James Hughes, dean emeritus of the Edward J. Bloustein School of Planning and Public Policy at Rutgers. “Their credit ratings are not that high so banks are reluctant to loan to them.”

Even though Hughes said these millennials might be starting to get out of it, the trend will probably continue. “They’ll probably be replaced by Generation Z,” he said.

In addition, they prefer to stay more mobile so that it’s easier to move when they find better job opportunities in a tough job market.

Perhaps due to all this, the current crop of young people has delayed settling down and starting families.

“They think, ‘If I don’t have kids, I don’t have to have a house,” Kevin Riordan of Rutgers Center for Real Estate said.

Along with this, younger people are opting to live in cities where there are more rental units, instead of moving to the suburbs.

Posted in Demographics, Economics, Employment, New Development, New Jersey Real Estate | 85 Comments

We like it here … but

From the Star Ledger:

N.J. is a good place to live but the taxes stink, residents say

New Jerseyans are conflicted.

A vast majority love their neighborhoods and most say the state is a good place to live, according to a new poll. But when it comes to the economy, they’re angry about the economic climate, pessimistic about the future and have grown increasingly likely to have an itch to move away.

It’s a mixed bag living in New Jersey, according to Rutgers-Eagleton’s 2018 State of the Garden State report.

Nearly 80 percent say their neighborhoods or “excellent” or “good” while 70 percent say the same about their towns.

Overall, 61 percent say New Jersey is an “excellent” or “good” place to live, compared to 39 percent who rate it “fair” or “poor,” according to the survey.

Ask New Jerseyans to consider their financial concerns with the state and majorities say they have grave misgivings.

Eighty-two percent are dissatisfied with how state government has handled taxes, including a majority, 61 percent, who are “very dissatisfied,” according to the poll. Three quarters say the same about cost of living and government spending

That could explain why the number of people who consider leaving the state has increased over the last decade: 30 percent — up from 22 percent in 2010 — say they have an itch to move.

“In a state that ranks near the top when it comes to outbound migration and taxation, it’s no surprise that New Jerseyans are upset with how state government is handling important financial matters – most of all, taxes,” Ashley Koning, director of the Eagleton Center for Public Interest Polling at Rutgers University-New Brunswick, said.

Posted in Demographics, Economics, New Jersey Real Estate, Property Taxes | 111 Comments

Mortgage rates going up

From CNBC:

Mortgage rates jump even higher after positive jobs report

The good news is Americans are making more money – because they’re going to need it, especially people thinking about buying a home.

While the just-released January employment report showed job growth that topped expectations, to go along with a nice gain in wages, it also sent bond yields soaring. Mortgage rates loosely follow the yield of the 10-year Treasury. Bond yields have been rising for weeks on strong economic data domestically as well as changes in international monetary policy, but this move was the most dramatic.

The average rate on the 30-year fixed-rate mortgage is at its highest level in four years, about 4.5 percent, and for some lenders, it is even higher.

“This isn’t a knee-jerk reaction to some headline event. It’s a broad-based, deliberate move,” said Matthew Graham, chief operating officer at Mortgage News Daily. “A quick return to December’s levels is unlikely, even though we may get some relief on the way higher. How much higher is hard to say, but at a certain point, high rates are self-correcting. We’re probably at least half-way to that magic line in the sand.”

Boiling the change so far down to a monthly payment, if a borrower took out a $200,000 mortgage in the middle of December, when the average rate was around 3.875 percent, they would have had a monthly payment of $940 (that’s not including taxes and insurance). If they were to take out that same loan today, the monthly payment would be $1,013.

While $73 a month may not sound like a lot to some, this is just a best-case scenario. Depending on your creditworthiness, it could be a bigger difference. For some borrowers on the margins, they may no longer even qualify for the loan. Lenders today are required to make sure the borrower has the ability to repay a loan, based on income and other expenses. If the monthly payment is even slightly higher, some borrowers may not make that ability-to-repay standard.

For those out house hunting already, the higher rates will only add to the weakening affordability in the market. Home prices continue to move higher at three times the rate of wage growth. In some large metropolitan markets, annual price gains are in the double digits.

Posted in Economics, Employment, Mortgages, National Real Estate | 120 Comments

January MarketNews

From Otteau Group:

This topic has caused quite a stir, with some forecasters predicting ‘Armageddon’ and that the ‘The Sky is Falling’! Contrary to these claims, our analysis indicates that most existing homeowners and homebuyers in New Jersey and New York will realize a net tax savings under the new tax code. Even more surprising is that those who will be adversely affected consist primarily of high-income households in the luxury home market.

As with all major policy changes there will be winners and losers, but the big picture is that the housing market will remain viable in the years ahead. The hysteria that has ensued due to misinformation is however likely to cause home sales to be sluggish during the early part of 2018 resulting in a delayed Spring-Surge. Because of this, Right Pricing! marketing strategies are more important than ever in the coming months to offset this adjustment as normal marketing times lengthen and unsold inventory increases. Looking ahead, while home sales are expected to regain their footing by late Spring once the facts about the tax reform become known, rising mortgage interest rates will serve to limit the number of home sales in 2018. All of this is likely to result in fewer home sales in 2018 following last year’s record breaking performance.

Over the longer term, the changes to the tax code will have some adverse effects on local housing markets by weakening the financial incentives of home ownership and reinforcing out-migration patterns for people and businesses from high tax states like New Jersey and New York. But these are largely self-induced problems rooted in policy that will take years to address. In the short term, the local housing markets will remain viable and home prices are expected to continue to rise.

After two consecutive months of increases, home purchase contracts in New Jersey were basically unchanged in December. This is compared to a 4% increase one year ago in December of 2016. Despite a stagnant end to the year, purchase contracts in New Jersey hit a 12-year high in 2017, with 115,237 contracts recorded. This reflects a 5% increase compared to the 109,471 home sales that occurred during 2016. It is anticipated, however, that the hysteria that has ensued due to misinformation on the Tax Reform is expected to cause sluggish home sales in the early part of 2018 resulting in a delayed Spring-Surge. Looking ahead, home sales are expected to regain their footing by mid-year once the facts become known, but it is also likely that mortgage interest rates will rise faster in response to continued economic growth. All of this is likely to result in fewer home sales in 2018 following last year’s record breaking performance.

While the number of home sales has increased across all price ranges in 2017, the largest gain occurred for luxury homes priced over $2.5-Million, rising by 11%, while homes priced under $600,000 experienced the smallest increases. It’s important to note that home sales in excess of $2.5-Million are increasing for the first time in more than a decade. The improvement has however been primarily concentrated in towns with direct rail service to Manhattan.

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 fallen to its lowest point of the past 12 years, having declined by 5,000 over the past year. This is also about 40,000 (-55%) fewer homes on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 5.0 months of sales (non-seasonally adjusted), which is lower than one year ago, when it was 5.8 months.

Currently, 17 out of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices. Essex County has the strongest market conditions in the state with 3.0 months of supply, followed by Middlesex, Hudson, Somerset, Bergen, Passaic, Morris and Union Counties, which all have 4.5 months of supply or less. The counties with the largest amount of unsold inventory (8 months or greater) are concentrated in the southern portion of the state including Cumberland (9.3), Atlantic (9.3), Salem (10.1) and Cape May (12).

Sales of residential real estate in New Jersey rose to $38.3-Billion in 2017, which is a 10%increase from the prior year. Also noteworthy is that this was the highest residential transaction volume since 2005. Single family dwelling transactions accounted for the largest share in 2017 with $29.5-Billion in sales or 77% of all transactions, followed by Condo/Townhouse properties, which accounted for 19%, and Age-Restricted dwellings, which accounted for only 4%.

Posted in Demographics, Economics, New Jersey Real Estate | 192 Comments

Case Shiller up 6.4% yoy

From HousingWire:

Case-Shiller: Home prices rising three times the rate of inflation

The S&P CoreLogic Case-Shiller U.S. National Home Prices NSA Index, which covers all nine U.S. census divisions, reported an increase of 6.2% in November. This is up from the annual increase of 6.1% the previous month.

The 10-City Composite held an annual increase of 6.1%, up from 5.9% the previous month. The 20-City Composite increased 6.4% year-over-year, up from the annual increase of 6.3% in October.

“Home prices continue to rise three times faster than the rate of inflation,” said David Blitzer, S&P Dow Jones Indices managing director and chairman of the index committee. “The S&P CoreLogic Case-Shiller National Index year-over-year increases have been 5% or more for 16 months; the 20-City index has climbed at this pace for 28 months.”

Some cities saw higher increases than others. Seattle, Las Vegas and San Francisco reported the highest annual gains among the nation’s top 20 cities with increases of 12.7%, 10.6% and 9.1% respectively.

And one factor stands above the rest as being the main factor to the continually rising home prices.

“Given slow population and income growth since the financial crisis, demand is not the primary factor in rising home prices,” Blitzer said. “Construction costs, as measured by national income and product accounts, recovered after the financial crisis, increasing between 2% and 4% annually, but do not explain all of the home price gains.”

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

Yeah yeah, be priced out forever, we’ve heard that before.

From Forbes:

2018’s Housing Market Looks Good Unless You’re A First-Time Millennial Buyer

The nation’s housing market for 2018 continues to look good, according to two recently released reports. But first-time millennial buyers will continue to struggle with affordability, especially in high-priced areas like Los Angeles, San Francisco, Boston, New York and Washington DC.

Listen to Ralph G. DeFranco, Ph.D, global chief economist, Mortgage Services, Arch Capital Services Inc.: “With interest rates and home prices both on the rise, first-time homebuyers – largely millennials – may want to consider making the jump from renting to owning sooner rather than late.”

DeFranco further said: “Our research shows few signs of a housing bubble because the typical warning signs aren’t present. Overall, the shortage of housing paired with a robust job market should keep the housing market strong and growing, short of an unexpected event and despite the contrary pressures that may be created by the tax bill.”

The HaMMRSM also makes market predictions to 2020. Among them: Home prices will continue to increase around the country in most markets. Look to annual increases of 2-6%, with most housing markets currently at low risk for a downturn.

Mortgage rates will rise, causing people to move less often. According to the report, “rising rates give existing borrowers with fixed-rate mortgages a financial incentive to stay put.” In addition, “homeowners will have more incentive to seek second liens or home improvement loans rather than move to a new home or refinance.” Makes sense since a new mortgage would likely be a higher rate cutting into the key affordability factor.

Posted in Demographics, Economics, Housing Bubble, Housing Recovery, National Real Estate | 112 Comments