So long and thanks for all the fish

From CNBC:

Tax bill will slash by half the number of homeowners using the mortgage deduction

The number of homeowners who will benefit from the mortgage tax break is expected to plummet this year by more than half, according to a congressional report released on Monday.

About 13.8 million taxpayers will be able to claim the mortgage-interest deduction in 2018, down from more 32.3 million in 2017, estimates from the Joint Committee on Taxation show. That’s about a 57 percent drop.

Already, the deduction was not used by most taxpayers. Of the 150 million or so tax returns the IRS has received annually in recent years, just 20 percent claimed the deduction, according to research from the Urban Brookings Tax Policy Center.

The anticipated drop is largely due to the near-doubling of the standard deduction that took effect Jan. 1 under the new tax law. Fewer taxpayers are expected to itemize their deductions, which is the only way to take advantage of the tax break for interest paid on mortgages.

The new report estimates that 18 million households will itemize deductions this year, down from 46.5 million last year.

Taxpayers would need deductions worth more than the standard deduction for itemizing to make financial sense. And with few deductions left for taxpayers to turn to, that threshold will be a harder hurdle to clear.

Posted in Mortgages, National Real Estate, Politics | 150 Comments

…and still little new housing

From CNBC:

Home prices just took the biggest jump in four years

Homebuyers, hold onto your wallets. The gains in home prices are getting bigger as the supply of homes for sale gets leaner.

The median price of a home sold in March surged 8.9 percent compared with March 2017, according to Redfin, a real estate brokerage. It is the biggest annual increase in four years. Redfin tracks prices in 174 local markets and calculated the median home price at $297,000.

High prices are the result of very, very low inventory. The supply of homes for sale was down 11.9 percent in March, compared with a year ago. As a result, sales fell 3.7 percent. The number of new listings in March dropped 5.6 percent annually, although part of that may have been due to the Easter holiday falling early this year.

“Sellers are slow to list this year and we aren’t seeing enough new construction homes to fill the gap,” said Redfin’s chief economist, Nela Richardson. “If we don’t see the new listings number turn around next month or a pickup in new housing starts, inventory will be a persistent drag on sales for the remainder of the year.”

Homebuilders are not helping much. Housing starts disappointed in March, with single-family construction falling 3.7 percent for the month. Building permits, an indicator of future construction, declined 5.5 percent for the month and are barely 2 percent higher compared with a year ago. In contrast, multifamily construction is increasing considerably. Builders are banking on continued, strong demand for rental apartments, as homebuyers struggle to find affordable homes.

“The change towards multifamily could be the initial signs that affordability is starting to impact the mix of construction,” noted Tendayi Kapfidze, chief economist at LendingTree. “Multifamily units are at lower price points and include significant rental units. Notably, single-family housing starts are particularly weak in the high-cost Northeast — that is also the most exposed region to the negative impacts of the tax plan.”

Buyer demand is still strong, despite higher prices. Sellers are pulling back, however, likely worried they won’t be able to find anything else they like or can afford. The average home went under contract in 43 days in March, more than a week faster compared with a year ago and a March record. Nearly a quarter of the homes sold for more than their list prices.

As mortgage rates continue to rise, current homeowners will have even less incentive to sell. Sales have been dropping as a result of the tight supply, and prices usually lag sales by a few months. That does not appear to be the case, however, in this cycle, as demand is outweighing everything else. It may be that young buyers are waiting, and renting longer, in order to save for higher-priced homes.

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 35 Comments

Out with retail, in with industrial

From Real Estate Weekly:

Developers struggling to meet demand for New Jersey industrial space

New Jersey can’t keep up with demand for industrial space, according to Duke Realty leasing vice president Ben Rosen.

“There are no buildings available under 300,000 square feet in northern New Jersey—and the demand for industrial space is strong and consistent,” said Rosen “The trend driving the industrial market is the supply side and the industry can’t keep up — it takes too long to develop and there is not enough land.”

Panelists agreed the industrial sector will remain strong for the foreseeable future with the continued strength of e-commerce and the move away from brick and mortar retail stores.

Jeff Milanaik, principal, Bridge Development Partners,noted that “the capital markets appetite for industrial is phenomenal — there is an uptick of activity in the ports and the inherent need for warehouse space.”

Regarding the office market, John Saraceno, Jr., Managing Principal, Onyx Equities, noted that there is a carnage of commercial office space, “and location, location, location is more important now more than ever. We are seeing the same process over and over of people tired of occupying 30 to 40-year-old office buildings.”

There is not a lot of quality office space on the market and there are a lot of people fighting for the same space. He also noted that the parking density trend is not going away, as we see more tenants wanting more parking.

All in all, panelists remain optimistic about the state of New Jersey’s commercial real estate market over the next couple years with some of the driving factors including the repurposing of retail centers for industrial use; increased activity at the ports; redeveloping and upgrading office buildings to include amenity packages geared towards millennials and new technology; and federal tax reform.

Posted in Demographics, Economics, New Development, New Jersey Real Estate | 28 Comments

They sound pretty smart to me

From the Times of Trenton:

‘Brazen criminals’ are taking advantage of the housing crisis

Brazenness is the hallmark of con artists and nowhere is that more evident than with shameless real estate scammers who rip off unsuspecting renters and property owners.

A case in point was the recent arrest of a dozen people by Mercer County authorities on charges of running a complex rental scam.

Authorities say the accused would move into homes that were vacant or being foreclosed, change the locks, turn on utilities and live rent-free. Sometimes they would create leases and rent the properties to others, causing a lot of confusion for real estate agents and police who are called in to sort out the situation.

Often, the scam goes unnoticed until a bank inspector or property manager stops by to check on the home or to show it. That’s when they discover someone living in the house that should be empty.

“These are brazen criminals who educated themselves on squatters’ rights and took advantage of the civil court process,” Mercer County Prosecutor Angelo J. Onofri said when he announced the arrests and charges on April 6.

Posted in Foreclosures, Housing Bubble, New Jersey Real Estate | 248 Comments

Your parents had it easy

From CNBC:

Posted in Demographics, Economics | 103 Comments

Don’t need NY to tell us we’re cool … but it sure don’t hurt

From the NY Times:

Wait, New Jersey Was Once Not Cool?

New Jersey chic used to have a name: Bruce Springsteen. And that was pretty much it, at least according to the Garden State’s haughty neighbors across the Hudson River, a point that justifiably rankled generations of New Jerseyans. No matter how much New Jersey natives fired back by extolling the virtues of spacious split-levels on family-friendly half-acre lots, or summer beach strolls in Cape May, or even New Jersey’s rich literary legacy (forget Brooklyn Heights; Norman Mailer was from Long Branch!), New Yorkers long took it as a birthright to dump on their neighbors to the west.

As the writer Frank DeCaro put it in this Clinton-era Styles cover story: “New Jersey didn’t become a national punch line — ridiculed as a repository of industrial waste and bad taste — without reason. The words ‘New Jersey’ conjure up sights and smells for many nonresidents of the northern stretch of the New Jersey Turnpike — tank farm after pipeline after brewery.” And that was from a guy who grew up in the town of Little Falls!

Consider the deeper context. As recently as the ’80s, even Jersey natives like Mr. Piscopo, from Passaic, were expected to milk their home state for easy laughs. Remember his Paulie Herman character from “Saturday Night Live”? The whole gag was built around the supposed horror of being trapped with the Jersey-est of Jerseyites in, say, a diner booth as he squawked, “I’m from Jersey? Are you from Jersey?”

The pendulum had to swing eventually, and sure enough, by 1999, the Garden State was in full bloom, according to Mr. DeCaro. Exhibit A: Lauryn Hill, of South Orange, then “the most popular woman in hip-hop,” shouted to a sold-out Madison Square Garden, “New York, let me take you out to New Jersey and bring New Jersey back,” without, he added, “a trace of irony or condescension.”

By that point, the article argued, New Jersey had “captured the attention of moviegoers, readers and couch potatoes alike,” thanks in part to Generation X film directors from New Jersey like Kevin Smith (“Clerks,” “Chasing Amy”) and Todd Solondz (“Welcome to the Dollhouse,” “Happiness”), not to mention a certain HBO show involving an angst-ridden mob boss.

It was the dawn of a “post-Springsteen school,” Mr. De Caro wrote, “that has rethought the suburbs as a place of humor, color and intrigue. These works recast New Jersey’s little towns as Peyton Places with secrets in every cupboard, and they raise the question: If the suburbs are so boring, why is this stuff so fascinating?”

It made sense that New Jersey was suddenly embraced by the cool crowd, Mr. DeCaro argued, since seemingly every other celebrity turned out to be from there. A Vanity Fair story from a few years earlier, “Garden State Babylon,” listed more than 120 New Jersey-bred celebrities and influencers, including Charles Addams and Pia Zadora, broken down by turnpike exit. Meryl Streep, Martha Stewart, Bruce Willis, Jack Nicholson, Deborah Harry, Tom Cruise — was anyone super-famous not from New Jersey?

And then there was that little-known comedian from Lawrenceville, Jon Stewart, before he transformed comedy television with “The Daily Show.” No wonder that by 1999, New Jersey had “gone from a private shame to a juggernaut,” as the playwright Paul Rudnick, from Piscataway, was quoted as saying.

Two decades later, those old New Jersey jokes sound as dated as a Bob Hope routine (although Jersey bashing enjoyed a brief renaissance with “Jersey Shore”). Sure, the Nets fled the Meadowlands for Brooklyn. But lately, the real flow seems to be going the other way, as stratospheric real estate prices in New York City have inspired members of the creative class to decamp to the Boss’s backyard to live, raise families and, you know, “create.”

The migration is enough of a thing that Time Out New York ran an article a few years ago, “The Coolest Places in New Jersey for New Yorkers,” that offered Garden State alternatives to New York neighborhoods: Montclair as Greenwich Village; Jersey City as Williamsburg; Westfield as the Upper East Side; and so forth. It was a useful guide for would-be colonizers, surely. But ask any Jerseyite: They really don’t need New York publications to tell them they’re cool, thank you very much.

Posted in Demographics, Humor, New Jersey Real Estate, NYC | 119 Comments

No surprises here, big money stays in Manhattan

From Bloomberg:

New York City’s Top Earners Still Choose Manhattan Over Brooklyn

Brooklyn may claim the popularity contest, but Manhattan’s still home to the city’s highest earners.

That’s the upshot from a Bloomberg analysis of household earnings by zip code, which showed five of the top 20 areas with the highest adjusted gross income in the Northeast in Manhattan. None were in Brooklyn.

Zoom out a notch, though, and Manhattan loses its luster compared to the tony suburbs in the tristate area. In fact, half of the top 20 ZIP codes in the Northeast are in commuter towns in New York, New Jersey and Connecticut.

Harrison, New York, was home to the Northeast’s highest earners, with average AGI of $976,200. Gladwyne, Pennsylvania, and Weston, Massachusetts, followed with the only other averages above $850,000. New Jersey’s first entrant was Far Hills at fourth, while Riverside, Connecticut, was sixth.

So the next time you’re on the Port Jefferson line on the LIRR, the New Haven Line on Metro-North, or running late on the Morristown Line on NJ Transit, appreciate the democratization of commuting. You could be next to a millionaire. Or maybe it’s you.

Posted in Demographics, Economics, New Jersey Real Estate, NYC | 131 Comments

NJ wages up 4%

From the Star Ledger:

N.J. workers are earning more $$$ but it’s not all good news

New Jersey workers now have a few more bucks in their pocket.

The average hourly earnings of New Jersey employees in the private sector went up by 4 percent over the past year, according to the latest U.S. Bureau of Labor Statistics data.

That’s a faster rise than from 2016 to 2017, which saw a 2 percent increase.

And heck, that’s good news for workers who are looking for a little more cash to pay everything from their weekend bar tabs to childcare or healthcare. But experts and economists said the news isn’t all roses and butterflies, as it suggests a labor shortage may be taking hold in the state.

“[Employers] are having a hard time filling open positions,” said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “There are jobs available, but applicants don’t have the education or skill level necessary.”

That tends to push wages and earnings up.

Workers in the state made, on average, $29.64 an hour in February 2018 compared to the $28.51 an hour they were making in February of last year.

Nationwide, New Jersey ranked as having the 11th-highest earning increase over the past year. Maryland had the highest average hourly earnings increase, at 6.8 percent.

It’s hard for New Jersey employers to find qualified applicants, especially younger workers who may have the needed skills but prefer to work in New York City or Philadelphia, Hughes said. A U.S. Federal Reserve survey published in January found labor shortages across the country.

“[Employers] have to increase wages for the entire job category to make it more attractive for people,” he said.

Talent wants to live in urban, walkable communities close to public transportation, and New Jersey communities that are not investing in those things will be missing out no matter how much money they offer their workers, said Pete Kasabach, executive director of New Jersey Future.

“We’ve underestimated the importance of place and how it’s a major driver of wages,” Kasabach said.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 81 Comments

Large scale development possible in Jersey?

From Centraljersey.com

Sayreville will build ‘largest mixed-use project in New Jersey history’

Development is moving forward on a 418-acre, $2.5 billion mixed-used development in Sayreville.

Riverton, a mixed-use project that will be located by the Raritan River and total 5 million square feet in size, is being developed by North American Properties, a multi-regional real estate operating and development company in a join venture with PGIM Real Estate.

Due to the scale of the project, which the company said is “considered the largest mixed-use project in New Jersey history,” the date has not been set yet for completion.

Mark Toro, North American Properties managing partner from Atlanta, compared Riverton to Avalon, an 86-acre, $1 billion mixed-use development in Alpharetta, Georgia.

“We create great, walkable places that connect people to each other, cities to their souls, partners to opportunities and individuals to experiences that move them,” Toro said. “We are bringing together a world-leading visionary team to create New Jersey’s next great hometown, advancing the community-building skillsets we developed at Avalon.”

With Riverton, Toro stated such a project has not yet been deployed in the Northeast before.

Among the reasons for having the project at its location in the borough was, according to North American Properties, its proximity to 2 miles of waterfront with access to the Atlantic Ocean and the Driscoll Bridge on the Garden State Parkway, which approximately 372,500 vehicles travel on daily.

The area also receives further activity due being located by Route 9 (a national highway) and Route 35 (a state highway). As a result, the company found that the area provides “unimpeded access” to the New York metropolitan area and its marketplace.

Toro also stated Riverton will be constructed on an undeveloped, vacant space that will function as a “central gathering place” for both New Jersey and New York City, as it will also be located in the center of several New Jersey municipalities.

Posted in New Development, New Jersey Real Estate | 98 Comments

Another day, another new tax

From the Star Ledger:

N.J. bill would allow for voter-approved arts tax

A New Jersey lawmaker is pushing for a new tax designed to fund local arts initiatives.

Assemblyman Raj Mukherji, D-Jersey City, introduced a bill in the New Jersey Legislature last week that would allow municipalities to ask voters to approve an arts tax, a levy that would mirror one that creates a fund for open space and historic landmark projects. Voters in over 200 New Jersey municipalities have approved open space taxes.

The push for increased arts funding began in Jersey City last year, when local groups campaigned to obtain city dollars to fund arts programs and organizations. After an initial plan to add a municipal tax to Uber and Lyft rides fell through, Mayor Steve Fulop teamed up with Mukherji on the current proposal.

“Jersey City has galleries and arts districts with live-work zoning and an infrastructure that could help incubate legends,” Mukherji said in a statement from the city. “But without a dedicated and recurring funding source, we will never reach our potential.”

Gov. Phil Murphy, a Democrat, has proposed a $37.4 billion state budget that includes $1.6 billion in new taxes and fees. Matt Rooney, an attorney and conservative blogger who is critical of Murphy’s tax plans, told The Jersey Journal New Jersey’s high taxes are forcing residents to flee the state.

“No proliferation of sidewalk murals, dance troops or street festivals can fix that,” Rooney said. “If you want to aid the arts in New Jersey? Stop forcing its patrons to relocate to Bucks County, Pennsylvania and Wake County, North Carolina with more taxes.”

Posted in New Jersey Real Estate, Property Taxes | 90 Comments

Foreclosures spike in NYC?

From The Real Deal:

New York City foreclosures are back to financial crisis levels

The number of foreclosures in the city continued to climb this year, with Staten Island and Brooklyn seeing the largest upticks in scheduled auctions.

In the first quarter of 2018, 920 homes were slated for foreclosure for the first time — a 31 percent year-over-year increase, according to a new report by PropertyShark. This represents the largest number of foreclosures seen in any quarter since 2009.

New foreclosures in Staten Island jumped 226 percent to 189, compared to 58 in the first quarter of 2017, according to the report. Brooklyn experienced a 64 percent increase year-over-year, logging 275 scheduled foreclosures.

The Bronx followed with 113 foreclosures — a 33 percent increase — and Queens had 303, representing a 13 percent decrease year-over-year. Manhattan had just 38, compared to 2017’s 36.

Foreclosures reached 3,306 citywide in 2017, marking the highest volume seen since 2009, according to a separate report by PropertyShark. It should be noted, however, that the number of lis pendens filed — the first step in the foreclosure process — was down 13 percent this quarter compared to the same time last year.

So, while scheduled foreclosures continue to rise, a slowdown may be in sight. At the same time, it’s unclear how the new tax law will impact home values, and whether it will result in a spike in mortgage foreclosures as some have predicted.

Posted in Economics, Foreclosures, NYC | 84 Comments

Come to the dark side

From CNBC:

Jersey City becomes alternative to New York, but without the ‘sticker shock’ in prices

Real estate prices in New York City have cooled but remain astronomically high, so Jennifer Tobias, a senior designer at the Studio Sofield design firm in lower Manhattan, found a nearby refuge.

Located just across the Hudson River from Manhattan’s West Side, Jersey City is being touted by some as the latest alternative to New York City’s torrid real estate market. It’s where Tobias joined a growing number of area residents who find Jersey City more affordable when compared to its more famous neighbor.

“My apartment is a 310 square foot studio in a 28-unit building,” Tobias told CNBC recently. Her unit cost $195,000 when she bought it in 2007, and she said that its current value is $312,000.

“A similar apartment in New York City would easily cost twice as much,” she added. Her residence faces Van Vorst Park, which has a farmer’s market, Shakespeare performances and outdoor movie nights. A wide range of restaurants and bars can be found within an eight-block radius, and the overall cost of living is low.

She isn’t only getting a more affordable lifestyle across the river. New York’s outer boroughs like Brooklyn and Queens, have traditionally offered lower cost housing. However, prices there have also skyrocketed in recent years, forcing residents of modest means to look elsewhere.

Enter New Jersey, which for years dwelled in the shadow of its larger-than-life counterpart across the Hudson, but has definitively come into its own. Places like Jersey City have emerged as alternatives to the Big Apple for cosmopolitan-minded residents.

Posted in Gold Coast, Housing Recovery, NYC | 11 Comments

You don’t get a house just for showing up…

From USA Today:

Home buying market so brutal, some home buyers make offer sight unseen

This spring home-buying season should be a coming-out party for Millennials, many of whom are finally ready to make a purchase after hunkering down for years in their parents’ basements or expensive apartments.

The only problem: Much of the food at the party is gone, and what’s left is priced like caviar.

Although solid job and income growth is emboldening many prospective home buyers, record low housing supplies are driving up prices and curbing sales, especially for Millennials looking to buy starter homes.

“For home buyers, this is shaping up to be one of the most difficult years in recent memory,” says Ralph McLaughlin, chief economist of Veritas Urbis Economics, which studies the housing market.

For sellers, it will be a standout spring that brings big profits, unless those sellers themselves are looking to buy a larger home in the same metro area. “It’s going to have the feel of a hot market,” marked by multiple offers and bidding wars, says Lawrence Yun, chief economist of the National Association of Realtors (NAR).

Already, house hunters are waiving inspections, making offers without even seeing homes and bidding well above asking price. Yet Yun predicts sales will be flat compared to spring 2017 because of the skimpy supplies and reduced affordability for many buyers.

Meanwhile, existing homeowners, particularly Generation Xers, would like to move to bigger homes but fear not finding one or having to shell out much more for it, especially with average 30-year fixed mortgage rates at 4.4%, up from less than 4% last year, Melendez says. And after the sharp price run-up since 2012, many homeowners worry any new house they buy could lose value. Fifty-three percent of homeowners surveyed by ValueInsured in February think they could see another housing crash, up from 37% in early 2016.

Many Baby Boomers, meanwhile, are delaying retirement and staying in their current homes longer as well, McLaughlin says.

Bottom line: Many existing homeowners are staying put, further limiting the supply of starter homes and pushing up their prices. Buyers of starter homes devoted an average 41.2% of their income to housing costs in the first quarter, up from 37% a year ago, Trulia says. That’s well above the 30% most experts recommend.

Posted in Demographics, Economics, Housing Bubble, National Real Estate | 98 Comments

And you should pay even more…

From NJ101.5:

4 COUNTIES IN NJ HAVE HIGHEST PROPERTY TAXES IN THE NATION

Just in case you’ve forgotten, a new analysis from real-estate tracker ATTOM Data Solutions reminds us that New Jersey homeowners are paying the highest property taxes in the nation — both in absolute numbers and as a percentage of home value.

The company’s analysis of single-family homes in 2017 recorded an average property tax of $8,696 in the Garden State, compared to a nationwide average of $3,399. Connecticut posted the second-highest average at $7,105.

Mirroring the country, average property taxes in New Jersey jumped 3 percent from 2016.

At 2.28 percent, New Jersey posted the highest effective property tax rate. That’s close to double the national average of 1.17 percent.

The analysis spotted nine counties nationwide with average property taxes above $10,000. Four of them can be found in New Jersey — Essex, Bergen, Union and Morris.

Every New Jersey county recorded an average property tax rate higher than the national average.

Posted in New Jersey Real Estate, Property Taxes | 83 Comments

Get in line with the rest of us

From NJBIZ:

Survey: Millennials want more jobs, cheaper housing

Millennials in New Jersey want lower taxes, increased job opportunities, affordable housing and improved, cheaper mass transit in order to stay in the state.

According to a survey of 975 state residents by the New Jersey Society of CPAs, 34 percent of respondents said high property taxes as the biggest reason millennials are leaving the state, while 16 percent said bringing more businesses into the state to create a higher-paying job market was also key. Some 14 percent said that building more affordable housing would be go a long way in getting them to stay.

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