Let me guess, we’re going to pay for it.

From the Star Ledger:

It’s ‘The Hub,’ and Murphy swears it will help make us a tech magnet

It’s called “The Hub” — a redevelopment project in New Brunswick that Gov. Phil Murphy says will help realize his goal of making New Jersey a magnet for scientific and technological innovation.

Plus, he said, it will bring “lots” of new jobs to the state.

Murphy and a bevy of state, local, education, and business officials gathered Monday at Rutgers University to tout the long-planned 12-acre complex, which will mix residences, retail and research facilities.

The governor’s office referred to the project as a partnership between the state, private corporations, and Rutgers, New Jersey’s largest university.

Murphy stressed that it falls in line with his effort to “grow the darn economy” in the Garden State — especially what he calls the “innovation economy.”

The hope, he said, is “The Hub” will attract top talent and businesses in the science and tech industries, as well as start-up companies.

Murphy added this will also be an opportunity for Rutgers, which he said is already one of the nation’s best research schools, to reach “another level.”

Murphy said the project will be developed over “a couple of years,” and he was uncertain as to who will pay for it or how much it will cost.

Posted in New Development, New Jersey Real Estate | 89 Comments

Roof and siding just got a little cheaper

From the Record:

No permit required: That roofing and siding job just got cheaper in New Jersey

Rules that took effect on Monday should have contractors in New Jersey raising the roof, since it’s no longer necessary to purchase a construction permit for roofing or siding jobs on one- and two-family dwellings.

Just in time for spring, the state Department of Community Affairs has reclassified those big-ticket repairs as minor work and ordinary maintenance, and now includes them on its list of home improvement jobs that no longer are subject to inspection.

The change will save contractors the time it takes to go to Borough Hall and apply for the permit. It should save homeowners the cost, which, depending on the size of the siding or roof job, would could be between $200 and $500.

“I believe this is a good thing,” said Jane Eliya, who operates Xpress Construction in Ridgewood. “This way we can concentrate on doing our jobs, instead of having to go to town hall to buy a permit. It’s not so much the cost of the permits, because we bill the homeowner, but the time. And then you have to wait for an inspection.”

Other tasks that no longer require a permit are installing alarm systems, outdoor irrigation, chimney lining, indoor Sheetrock and drywall and the replacement of indoor plumbing fixtures.

While potential loss to municipalities does not appear to be huge, many towns opposed the move at a public hearing that the Community Affairs Department held last November. Opponents argued that eliminating inspections removes a layer of consumer protection.

The changes seemed to catch many towns by surprise. The DCA informed municipalities only last week that the new rules were about to take effect.

Posted in New Development, New Jersey Real Estate | 117 Comments

Jersey’s pockets a little deeper

From Corelogic:

CoreLogic Reports Homeowner Equity Increased by $908 Billion in 2017

CoreLogic® (NYSE: CLGX), a leading global property information, analytics and data-enabled solutions provider, today released the Home Equity Report for the fourth quarter of 2017, which shows that U.S. homeowners with mortgages (which account for roughly 63 percent of all properties, according to a 2016 American Community Survey) have seen their equity increase 12.2 percent year over year, representing a gain of $908.4 billion since the fourth quarter of 2016.

Additionally, homeowners gained more than $15,000 in home equity between the fourth quarter of 2016 and the fourth quarter of 2017. While home equity grew nationwide, western states experienced the largest increase. Washington homeowners gained an average of approximately $40,000 in home equity, and California homeowners gained an average of approximately $44,000 in home equity (Figure 1).

On a quarter-over-quarter basis, from the third quarter of 2017 to the fourth quarter of 2017, the total number of mortgaged homes in negative equity decreased 1 percent to 2.5 million homes, or 4.9 percent of all mortgaged properties (the third quarter of 2017 data was revised. Revisions with public records data are standard, and to ensure accuracy, CoreLogic incorporates the newly released public data to provide updated results.). Negative equity in the fourth quarter of 2017 decreased 21 percent year over year from 3.2 million homes – or 6.3 percent of all mortgaged properties – in the fourth quarter of 2016.

“Home-price growth has been the primary driver of home-equity wealth creation,” said Dr. Frank Nothaft, chief economist for CoreLogic. “The CoreLogic Home Price Index grew 6.2 percent during 2017, the largest calendar-year increase since 2013. Likewise, the average growth in home equity was more than $15,000 during 2017, the most in four years. Because wealth gains spur additional consumer purchases, the rise in home-equity wealth during 2017 should add more than $50 billion to U.S. consumption spending over the next two to three years.”

Negative equity, often referred to as being “underwater” or “upside down,” applies to borrowers who owe more on their mortgages than their homes are worth. Negative equity can occur because of a decline in a home’s value, an increase in mortgage debt or both. Negative equity peaked at 26 percent of mortgaged residential properties in the fourth quarter of 2009, based on the CoreLogic equity data analysis which began in the third quarter of 2009.

Posted in Economics, Housing Recovery, New Jersey Real Estate | 38 Comments

I think I can I think I can

From Bloomberg:

U.S. Home Prices Rise Almost 9%, the Biggest Gain in Four Years

Home prices in the U.S. surged 8.8 percent in February — the biggest gain in four years — as buyers battled for an increasingly scarce resource: homes.

While sales were little changed amid the thin inventory, the median price across 172 large metropolitan areas jumped to $285,700, according to a report Thursday from brokerage Redfin Corp. It was the 72nd straight month of year-over-year increases since the market bottomed in 2012.

U.S. home prices are now 6.3 percent higher than their peak in July 2006 and 46 percent above their trough in February 2012, according to the S&P CoreLogic Case-Shiller national home-price index.

A strong job market is fueling the price increases even as the number of homes for sale fell 11.4 percent in February from a year earlier — and as mortgage rates hit four-year highs.

Posted in Demographics, Economics, Employment, Housing Bubble, National Real Estate | 139 Comments

NJ Lagging Job Recovery

From the Star Ledger:

N.J. added 43K jobs in 2017. Here’s why that’s not such good news

New Jersey added about 43,000 jobs in the private sector in 2017, about 18,000 less than 2016, according to data released by the U.S. Bureau of Labor Statistics Monday.

But that’s not necessarily good news.

“From 2014 to 2016 we had an upward trend in the number of jobs added in the private sector each year,” said James Hughes, a faculty fellow at Rutgers University’s John H. Heldrich Center for Workforce Development.

“That trend stopped in 2017,” he said. “New Jersey is still lagging the nation.”

The U.S. added about 2.1 million private sector jobs in 2017. And New Jersey makes up about 3 percent of the nation’s job base, Hughes said.

So, in order to keep pace, New Jersey would have had to add close to 60,000 jobs in the same year, he said.

Other reasons why the state continues to lag the nation include the exodus of the millennial generation to cities like New York. Its difficult for companies to hire talent if they are based in New Jersey, Hughes said.

“We are in the bottom fifth of states in terms of the number of jobs we’ve recovered. I guess its not much of a surprise that New Jersey is still playing catch up,” said Gordon MacInnes, director of New Jersey Policy Perspective (NJPP), a left-leaning think tank.

“Even if we have done well in the previous two years we haven’t done enough to be complacent,” he said.

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 170 Comments

NJ 2017 Flip Rate – 6%

From NJ1015:


Flipped homes represented more than 6 percent of all New Jersey home sales in 2017.

More than 7,500 one-family properties that exchanged hands last year already had a sale on record in the previous 12 months, according to state-by-state analysis from real-estate tracker ATTOM Data Solutions.

Atlantic — 388 flips, 5 percent of total sales
Bergen — 556, 7.6 percent
Burlington — 581, 95 percent
Camden — 805, 3.6 percent
Cape May — 150, 6.6 percent
Cumberland — 119, 6.1 percent
Essex — 535, 7.2 percent
Gloucester — 309, 2.8 percent
Hunterdon — 56, 7.2 percent
Hudson — 394, 5.9 percent
Mercer — 295, 4.7 percent
Middlesex — 244, 5.1 percent
Monmouth — 573, 4 percent
Morris — 297, 7.6 percent
Ocean — 1,040, 3.2 percent
Passaic — 101, 6 percent
Salem — 60, 4.3 percent
Somerset — 176, 6.2 percent
Sussex — 204, 8.5 percent
Union — 592, 3.8 percent
Warren — 68, 1.3 percent

Posted in New Development, New Jersey Real Estate | 130 Comments

Now *THIS* is a useful list

From the Star Ledger:

N.J. has too many damn towns. Here are 25 that need to go.

It’s almost spring cleaning season, fellow New Jerseyans, and it’s time we broached a familiar and heretofore unresolved issue in this crazy state: there are just waaaay too many towns here.

New Jersey comprises 566 municipalities, many of which you drive through in less than a minute having never realized that these blips all feature their own mayor, council members and public works people (or person, in some cases).

It stands to reason that fewer public employees on the books would lower taxes in our woefully overtaxed state, so with a blind eye turned to small-town pride — and our tongues in our cheeks, please no threats — here are 25 completely unnecessary New Jersey towns. Merge ’em or wipe ’em off the map completely. Really, who would know the difference?

Posted in Humor, New Jersey Real Estate | 116 Comments

Low taxes, but not really.

For most of these towns, there are some pretty sizable factors that keep taxes low, but are largely irrelevant for the rest of NJ. From the Star Ledger:

Here are the 30 N.J. towns with the lowest property taxes

Last week we sorted through New Jersey’s latest property tax data to show you the 30 towns with the highest average property tax bills. Here, we look at the 30 towns with the lowest average property tax bills.

Of course, average property tax bills are just one way to compare municipalities’ property tax burdens. Unlike the tax rate, the average tax bills also factors in property values. But it gives you a good idea of what people are really paying.

The average homeowners in all of these towns are paying well below the state average, $8,690.

There are a couple of new municipalities on this year’s list. Vineland and West Wildwood dropped of the lowest property tax list this time.

Posted in Economics, New Jersey Real Estate, Politics | 42 Comments

So they aren’t moochers?

From the APP:

Don’t blame NJ’s high taxes on ‘Moocher states’: Malanga

Last year’s federal tax reform act has prompted a lot of hand wringing and hyperbolic language from New Jersey officials over the loss of the state and local tax deduction. Rep. Josh Gottheimer, D-N.J., has advocated for a scheme to help some residents maintain their deductions by calling local taxes charitable deductions. (“GOP tax plan: N.J. pushing back,” March 5.)

The state needs to pursue this strategy, Gottheimer contends, because we’re tired of picking up the tab for “Moocher states” that, according to him, take our handouts and steal our taxes.

Regardless of whether the plans are ruled legitimate, however, the larger question is whether New Jersey taxpayers are really subsidizing a bunch of “moochers” from around the rest of the country. The congressman’s notion is based on studies pioneered by the late Sen. Daniel Patrick Moynihan, which show that the flow of funds from Washington to the state exceeds the money that New Jersey residents send to Washington as taxes.

Meanwhile, other states receive more back than they send. That underlies the idea that the federal government is shortchanging New Jersey. But when you look at what kinds of federal spending these studies track, you realize that the deficit New Jersey experiences is as much a function of the state’s own shortcomings as it is of any unfair treatment from Washington.

In these studies, the largest area of money tracked from Washington to the states is federal retirement income, three-quarters of which is Social Security payments to retirees. This is not discretionary income that the federal government is choosing to send to the states. It is money going to retirees where they now live. Jersey does not get a significant per capita share of this money because so many people leave the state when they retire. Even state workers flee in great numbers. A 2014 study found that nearly 25 percent of public employees leave New Jersey when they retire. That’s hardly the rest of the country’s fault.

While some retirees leave for the good weather elsewhere, many go because of the high taxes that help consistently get Jersey ranked as one of the worst places in which to retire. Moderate-income residents leave because they can’t afford to pay taxes on their homes once they retire. Wealthier residents leave because they don’t want to see their wealth whittled by the state’s high inheritance taxes. A recent survey by the New Jersey Business and Industry Association, for instance, found that 40 percent of business owners plan to leave the state when they retire.

Another significant area of Washington spending is federal contracting, a big chunk of which is defense spending. This is money competitively bid out to individual companies. And New Jersey firms do especially poorly at winning federal contracts. Our take from the $400 billion federal contracting pie is well below the national average when measured on a per capita basis. That clearly hurts the state’s economy, but is anyone asking why the state does so poorly? Is there something fundamentally uncompetitive about the New Jersey economy? Perhaps that’s the kind of thing the congressional delegation and our representatives in Trenton ought to be investigating. Among other things they would find is that any defense industry the state once boasted has long ago disappeared.

When he was alive, Sen. Moynihan understood that the flow of funds between Washington and the states was complicated and not something easily changed. In an essay attached to the 1999 study, he decided the only way to address the issue was to dramatically pare back the federal government’s taxes and spending, leaving the money in the states, where local governments could then decide how to use it.

Ironically, the new federal tax cuts accomplish some of that. The corporate tax reduction, for instance, will leave billions of dollars that would otherwise go to Washington in the hands of New Jersey businesses, where they could potentially spend it. The only problem is that Jersey isn’t a place where many of them want to continue doing business. The recent New Jersey Business and Industry Association survey found only 14 percent of local firms said they planned to grow further here. By contrast, 29 percent said they are looking to expand elsewhere.

Posted in Demographics, Economics, New Jersey Real Estate, Politics, Property Taxes | 37 Comments

I say flip it, flip it good

From Bloomberg:

Home Flippers Pile Into the U.S. Market, Scoring Higher Profits

Property investors were bullish on the U.S. housing market in 2017, flipping more homes than in any year since 2006, when the real estate bubble that helped upend the global economy was still inflating.

Investors flipped more than 207,000 single-family houses and condos in the U.S. last year, Attom Data Solutions said in a report, which defines flips as sales that occur within 12 months of the last time the property changed hands. More than 138,000 investors flipped a home last year, the most since 2007.

“The long up-cycle that we’re in is giving more and more people confidence to try their hand at home-flipping,” said Daren Blomquist, senior vice president at Attom. Rising home prices are “pulling more people onto the bandwagon.”

Today’s home flippers appear to be more conservative than bubble-era investors. The average flip generated gross returns of 50 percent in 2017, compared to 28 percent in 2006. Thirty-five percent of flippers financed their acquisitions last year, the highest share since 2008 but far lower than the 63 percent who used loans in 2006.

Posted in Economics, Housing Bubble, National Real Estate | 137 Comments

NJ fights back on business taxes, then taxes business

From the Star Ledger:

We’ve got sure-fire plan to save small businesses from Trump tax law, N.J. lawmakers say

New Jersey lawmakers who are already offering up a scheme to save homeowners the state and property tax deduction gutted by President Donald Trump’s tax law now say they have a bulletproof plan to protect small business owners.

Under New Jersey’s current tax code, those who pay taxes on business profits through their personal income taxes — such as principals in S corporations, limited liability corporations and other partnerships — would be hit by the new $10,000 cap on imposed on state and local tax deductions as part of a federal tax overhaul.

Democratic and Republican lawmakers said they will introduce legislation to instead allow the business entity to pay the state income taxes of its principals, as corporations don’t face the same cap.

Small business owners in New Jersey reported their income this way until the 1990s, when it was revised to simplify the tax code, Sarlo said, saying that gave him confidence it would pass legal muster.

Also from the Star Ledger:

N.J. Senate President wants this tax increase to replace Murphy’s millionaires tax plan

After declaring his opposition to a tax increase on wealthy New Jersey residents, Democratic state Senate President Stephen Sweeney said Tuesday that state coffers can get the money they need by enacting a 3 percent surcharge on corporate income.

The increase in the state’s corporation business tax rate from 9 percent to 12 percent on businesses with more than $1 million in income is the Democrats’ latest counterpunch to federal tax reform that slashed taxes on corporations but limited the state and local taxes residents can deduct.

It’s also Sweeney’s alternative to a tax hike on millionaires that Gov. Phil Murphy, a fellow Democrat, is expected to propose as part of his first budget next week as he hunts for another $1 billion a year to pump into public schools.

Sweeney argued that the combination of a truncated state and local tax deduction — namely state income taxes and local property taxes — combined with a 10.75 personal income tax rate on income above $1 million would hammer taxpayers.

But corporations were the big winners in federal tax reform, seeing their federal tax rate cut from 35 percent to 21 percent. And Sweeney said Tuesday New Jersey can get a piece of that windfall.

About 2,375 New Jersey corporations earn more than $1 million, and are on the hook for about $1.97 billion in taxes this year, according to the Senate President’s news release.

Sweeney said he expects the new 12 percent tax rate would bring in an additional $657 million in annual corporate tax revenue — roughly the estimated gains of a millionaire’s tax.

Businesses here are expected to save $2.9 billion as a result of the federal tax cut, and they retained their unlimited state and local tax deductions.

Posted in Economics, New Jersey Real Estate, Politics | 96 Comments

And they think this charitable contribution scheme has a chance?

From the Star Ledger:

IRS action on prepaid property taxes slammed as ‘naked political payback’ against N.J.

New Jersey Rep. Bill Pascrell Jr. and other Democrats on Monday accused the Internal Revenue Service of “naked political payback” for refusing to allow taxpayers to deduct their entire prepaid 2018 property taxes and threatening to step up enforcement of those who try to claim the tax break.

In a letter to acting IRS Commissioner David Kautter, Pascrell, D-9th Dist., and the other Democrats on the House Ways and Means Committee said there was no legal justification for the IRS to decide that only 2018 property taxes paid in response to an assessment — which would cover just the first half of 2018 in New Jersey — were deductible.

“We view this as a clear case of bureaucratic overreach, and now, as a result, many of our constituents are losing a valuable deduction — and consequently part of their hard-earned income,” the lawmakers said.

The ruling was issued Dec. 28, almost at the end of the year, though Kautter said he would revisit the decision following a meeting last month with Reps. Leonard Lance, R-7th Dist, and Josh Gottheimer, D-5th Dist.

The IRS had no immediate comment.

New Jersey homeowners, who pay the nation’s highest property taxes, rushed to prepay them once President Donald Trump signed a Republican tax bill that curbed the federal deduction for state and local income, property and sales taxes.

Posted in Economics, New Jersey Real Estate, Politics, Property Taxes | 84 Comments

Will transition to rentership put ownership even further out of reach?

From the WSJ, hat tip hoodafa:

Why New Jersey’s Soaring Foreclosures Are Good for the Housing Market

New Jersey’s foreclosure crisis is hitting a peak, and that could be a boon for the state’s housing market.

While bank repossessions across the U.S. fell to an 11-year low in 2017, they reached an 11-year high in New Jersey, according to ATTOM Data Solutions, a housing-research firm.

New Jersey, along with New York and other states, practice “judicial foreclosure,” in which foreclosures are handled through the court system. The process is typically friendlier to owners who fall behind on payments, but it can take years.

Other states, such as Texas and Michigan, have mainly nonjudicial foreclosures. After the housing bubble burst a decade ago, those states tended to work quickly through their backlog, flooding the market with fresh supply when there were few buyers.

“The pig is now finally at the end of the snake,” said Michael Affuso, director of government relations for the New Jersey Bankers Association. “We had the extraordinary slowness of foreclosures occurring at the judiciary, and that problem has reasonably resolved itself.”

More than a decade after the start of the housing bust, New Jersey leads the nation in overall foreclosure activity, with 1.61% of the state’s homes in foreclosure last year. The number of new bank-owned homes in December jumped to 2,308 from 1,448 in November, according to ATTOM.

The number of bank-owned homes started rising about a year ago, according to an analysis by Jeffrey Otteau, an appraiser and president of Otteau Group Inc.

The increase in distressed homes for sale is coming as the market is starved for inventory. Homes sold in January were on the market for an average of 72 days, according to data from New Jersey Realtors, a trade group, down from 86 days for the same month in 2017 and 94 days in January 2016.

Housing experts caution the increased pace of foreclosure actions could affect parts of the state differently. Areas where there is already too much inventory—the outer rings of the state and South Jersey, for example—will fall further behind Northern New Jersey and other suburban areas.

Still, the surge in foreclosures is attracting investors looking to buy homes and convert them to rentals.

Christian Schlueter, president of New Jersey Realtors, said bank-owned inventory is increasing for his Toms River-based office. A recent waterfront bank-owned home, he said, attracted eight offers in three days and went into contract for more than the asking price. The home will have to be completely gutted, he said.

“There’s a lot of experienced investors who are buying [bank-owned homes] and some new people are buying them believing they are going to be investors,” he said.

Howard Banker, director of housing finance at New Jersey Community Capital, a nonprofit community development organization, said he is seeing many distressed homes being converted to rentals. There is a growing market of displaced lower- and middle-income former homeowners who are unable to get another mortgage, he said.

“Investment firms have been able to acquire these homes in bulk and therefore at a discount. It is a lovely cash-flow system,” he said.

Posted in Demographics, Economics, Foreclosures, New Jersey Real Estate | 92 Comments

Who is to blame?

From the Star Ledger:

Trump trying to block funding for Gateway Tunnel project

President Donald Trump is trying to block federal funding for the Gateway Tunnel project even though the House has already allocated $900 million for it, according to a published report.

The Washington Post said Trump has pushed House Speaker Paul Ryan, R-Wis., to keep the funding for the plan for a new rail tunnel connecting New Jersey and Manhattan out of the spending bill now being written to fund the government through Sept. 30.

The report said Trump delivered the message to Ryan during a meeting on Wednesday. It cited as sources three people familiar with the conversation.

Trump has been at odds with Senate Democratic Leader Chuck Schumer of New York on such issues as health care, taxes, budget cuts, immigration and guns. Schumer delayed the Senate confirmation of Federal Railroad Administrator Ronald Batory to pressure the administration to fund Gateway.

His much-touted infrastructure plan calls for increased state and local government spending on public works, even as he crippled their ability to raise revenue to pay for projects by signing legislation shrinking the federal deduction for state and local taxes.

Rep. Rodney Frelinghuysen, R-11th Dist., who inserted the $900 million into the House spending bill, is one of the negotiators.

Gov. Phil Murphy said in Washington Thursday that the retiring lawmaker, who chairs the House Appropriations Committee, is working hard to ensure the money remains in the final spending bill.

The federal government initially agreed to pay the half the cost of building a new railroad tunnel under the Hudson River so that the existing tunnels could be closed to repair damage caused by Hurricane Sandy.

But the Trump administration has appeared to renege on that promise. In a letter sent Thursday to Rep. Donald Payne Jr., a member of the House Transportation and Infrastructure Committee, Federal Transit Administration Deputy Administrator K. Jane Williams said there is “no evidence of a binding agreement.”

Posted in New Jersey Real Estate, NYC, Politics | 34 Comments

Recovered or back to a bubble?

From HousingWire:

CoreLogic: Housing market nearly recovered from recession

CoreLogic, a global property information, analytics and data-enabled solutions provider, released a report outlining the real estate economy from 2006 to 2017, showing that the housing market has nearly completely recovered from the recent recession.

In some areas, residential areas began to hit their peak levels as early as 2005, according to the company’s Evaluating the Housing Market Since the Great Recession report. The majority of home prices collapsed in 2007.

During the recession, home prices fell 33% nationwide, hitting their lowest in March 2011. Since then, home prices have risen once again by 51%. The average home prices is now 1% higher than its 2006 level and the average annual equity increase was $14,888 in the third quarter of 2017. This indicates the housing market has recovered in many parts of the U.S., according to the report.

But while, overall, the U.S. has pushed past the recession, some states are still struggling to return to their pre-recession price levels. For example, Nevada saw the greatest drop after the housing crash as its home prices fell 60% from their peak levels.

Since then, home prices increased 93% from their trough, but remain 23% below their pre-recession peaks. What’s more, 9% of mortgaged properties in the state remained underwater as of the third quarter of 2017.

While some states saw their home prices fall drastically during the recession, others only experienced slight changes. North Dakota’s decline was just 2% due in part to the energy boom, and home prices in the state have since risen 48% above their previous peak.

“Homeowners in the United States experienced a run-up in prices from the early 2000s to 2006, and then saw the trend reverse with steady declines through 2011,” CoreLogic Chief economist Frank Nothaft said. “After reaching bottom in 2011, our national price index is up more than 50%.”

“West Coast states, such as California, Washington and Oregon are seeing some of largest trough-to-current growth rates in home prices,” Nothaft said. “Greater demand and lower supply, as well as booming job markets, have given some of the hardest-hit housing markets a boost in home prices. Yet, many are still not back to pre-crash levels.”

Posted in Economics, Housing Bubble, Housing Recovery, National Real Estate | 105 Comments