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May 13 2016 13618 1
Dated: May 13 2016
From the Record:
New Jersey led the nation in foreclosure starts in the first quarter, as the state continues to grapple with the fallout from the housing crash, the Mortgage Bankers Association said Thursday.
About 11.5 percent of New Jersey mortgages were either in foreclosure or late on payments in the first quarter, almost double the national average of 6.5 percent, the MBA said.
While national foreclosure rates are back to pre-recession levels, New Jersey’s court system is still dealing with a large backlog of distressed properties. Last year, almost 36,000 residential foreclosures were filed in the state. So far this year, an average of about 2,500 foreclosures have been filed each month, according to the state Judiciary.
Mortgage troubles don’t just affect the homeowners involved, said Patrick O’Keefe, an economist with the accounting firm CohnReznick in New York and Roseland. They also “influence the value of neighboring properties,” he said, because homes in foreclosure tend to be poorly maintained and sell at a discounted price. That affects appraisals and prices of nearby homes.
The national foreclosure and delinquency numbers in the first quarter reflect “a consistent downward trend that began in the second quarter of 2012,” according to Marina Walsh, an MBA vice president.
A check of the properties heading for foreclosure auction in North Jersey showed many properties in lower- and middle-income places like Hackensack, Garfield, Elmwood Park and Paterson, with unpaid mortgages in the $100,000 to $300,000 range.
But more affluent towns have not been immune. Lenders have filed foreclosure actions against properties with million-dollar mortgages in Allendale and Upper Saddle River, as well as an Alpine home where $2.6 million is owed.
From the Star Ledger:
The former Morgan Stanley bond trader believed to have lost more money than any single trader in the history of Wall Street has put his Rumson estate on the market for $4.5 million, according to its Zillow.com listing.
Howie Hubler’s disastrous bets against risky subprime loans cost Morgan Stanley $9 billion and was chronicled by Michael Lewis in his book about the 2008 financial meltdown “The Big Short.”
The 6-bedroom estate, built in 1928, includes a pool, spa, cabana and tennis court on four acres. The home has an “awe-inspiring kitchen” with high-end appliances, a walk-out lower level with a 10-foot coffered ceiling, full kitchen, wine room, gym and second laundry room, according to the listing.
He paid $4.65 million for the home in 2006, near the peak of the housing bubble. That’s $150,000 more than the current listing price.
It’s the eighth most expensive listing in Rumson, according to Zillow. Taxes are $65,754 a year, records show.
Hubler, according to Time, “was a thriving derivatives trader up until his excruciating blunder. From 2004 to 2006, he placed big bets against the U.S. real estate bubble using credit default swaps — complex financial instruments that pool and repackage risky sub-prime mortgages to sell on to investors.
But the economy’s decline happened slower than he expected, and Hubler had to cover his costs by delving even deeper into the CDO business. When the real estate market collapsed in 2008, he was wiped out — nearly taking Morgan Stanley itself with him.” The Observer called him a “subprime villain” and “an unwitting icon of the financial crisis.”
While the nation’s foreclosure inventory and volume of 90-plus day delinquent mortgage loans have been on the steady decline nationwide as a whole, those levels remain elevated in some areas.
Namely in three states—Florida, New York, and New Jersey, which hold approximately one quarter of the nation’s homes currently in foreclosure and mortgages that are three months or more past due, collectively known as non-current inventory, according to Black Knight Financial Services’ March 2016 Mortgage Monitor released on Monday.
Florida leads the nation with slightly more than 145,000 in the two categories combined; New York is second with 133,000, and New Jersey is third with 107,000. But despite the high number of loans in foreclosure or three months delinquent in Florida, Black Knight estimates that at the current rate of reduction in the Sunshine State (36 percent), non-current inventory in Florida will normalize close to the same time as the national average—which Black Knight estimates to be mid-2018.
New York and New Jersey, with lower reduction rates of 21 percent and 22 percent, respectively, are estimated to take much longer to normalize in the areas of foreclosure inventory and severely delinquent loans. Black Knight estimates that New York and New Jersey will take five and six years from now, respectively, at their current rates of reduction to achieve their normal pre-crisis levels of serious delinquency.
“Despite the concentration of inventory in the two states, New York and New Jersey are not the slowest to recover when we look across the country,” Black Knight stated in the report. “They are actually number seven and nine nationally, respectively.”
Black Knight estimates that Wyoming, Maine, and Rhode Island, at their respective rates of reduction, would all take more than seven years to reach their 2000 to 2005 average severely delinquent levels.
From NJ Spotlight:
Just off Route 9 in Forked River, blocks of newly rehabilitated and elevated homes are interrupted by the occasional lot overgrown by weeds on which might sit a damaged or vacant home or a foundation naked since superstorm Sandy.
Similar circumstances are visible on Passaic St. in Trenton, scarcely four blocks from the State Capitol, although the initial cause is different. There, the mix of homes includes some newly renovated, well-maintained, deteriorating or boarded-up, and a vacant lot. The city has been busy working on foreclosures.
To real-estate analysts and academics, the circumstances reflect New Jersey’s slow recovery from the big storm and the Great Recession. That has created problems for long-term residents, but buying opportunities for property investors, the experts said. The combination feeds into changing real-estate dynamics in much of the state, they said.
One thing both towns have in common is the number of speculators purchasing properties in all-cash sales. This is worrisome given that speculators often use the properties to build rental housing or simply sit on. In order to truly turn things around, locals want are buyers that will be invested in the community. Still, speculators can be seen as a positive: They usually choose up-and-coming communities to invest in.
In both towns, “if some of these properties had been sold earlier on, they probably would have brought good prices,” said Daren Blomquist, a vice president at RealtyTrac of Irvine, CA, a leading real-estate data firm. “Now, they’ve been sitting there for several years, in many cases empty.”
That wards off individual homebuyers. “There isn’t the interest that there might have been, because these properties may be in poor condition,” Blomquist said. That brings values down and when they finally do sell, it starts yet another cycle because the low values are reflected in comparables. This means local residents have trouble getting equity loans or get lower prices when they do want to sell.
Rogers acknowledged that some properties have been changing hands, but not necessarily to the new homeowners the city wants. They want homebuyers who will contribute to the community now, in order to turn things around. Thus, another goal of the redevelopment efforts, she said, is to “slow down speculation” by large investment interests amassing property.
The high rate of cash sales is not unknown. Some deals are always made for cash or its equivalents. Big developers write big checks for farmland. Real-estate trusts trade apartment complexes or office buildings. Cities like Newark and Trenton make single houses or lots available cheaply to new buyers. Parents transfer property to children.
But in a stable market, those deals account for about one-quarter of transactions, according to the real-estate firms. Thus, Morris County, a generally well-off area with employment centers and transportation links, had a cash sales rate of about 27 percent in the second quarter of 2006, according to RealtyTrac. It shot up for a bit, but it’s about 26 percent now.
In Ocean County, cash sales also were about 26 percent in the second quarter of 2006, according to RealtyTrac. When the recession hit, they climbed. By the first quarter of 2011, they were 46.6 percent.
There is another factor at play, according to James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, who scrutinizes development trends around the state.
Areas on the far fringes of metropolitan areas, with scant public transportation or indigenous industries, already are under stress, Hughes said. He has seen that in his own Hunterdon County, where he serves on an economic development group. There, rapid growth has halted and reversed.
In a 2014 study with fellow Rutgers professor Joseph Seneca, “New Jersey’s Postsuburban Economy,” Hughes documented some of the changes taking place as older, suburban residents leave the state and millennials and immigrants flock to urban areas.
In a five-year period, Brooklyn, NY, attracted one of every five people moving into the area, Hughes said. The fastest growing New Jersey suburb is Bergen County, “which had been losing people in the 1990s,” he said. Its public transit, employment centers, and proximity to New York City give it advantages over more remote areas, he said.
That trend is good news for communities on bus and rail lines, with downtowns for business, arts and restaurants, according to Hughes. Places like Somerville, and Asbury Park already have made gains, he said.
That is also good news for Trenton, according to Blomquist.
“As far as I know, it’s unique among state capitals, sitting on a river that is also the border, so it draws from another state,” he said.
But the gap between where New Jersey Transit’s Jersey Coast Line ends in Bay Head and the Atlantic City Line connects to Philadelphia leaves many communities without significant mass transit, Hughes said. The precipitous decline of Atlantic City jobs damages the same region’s economic prospects, he said.
“Even in parts of Monmouth County, millennials are saying it was a good place to grow up, but they don’t want to live there now,” Hughes said. “Their parents couldn’t wait to get out of Brooklyn, and the children can’t wait to get back to Brooklyn.”
In the near future, Reinhart said, “the Holmdels, the Colts Necks, the Howells, the West Windsors, those communities are going to be 60, 70 years old. And they’re not Hoboken, they don’t have a lot of homes with architectural significance.”
Farther south, those who can afford the cost of building Shore homes to withstand rising tides and strong storms are still making good investments, he said. But buying a home on a large lot in a sprawling suburb no longer has the same cachet.
“I think those places are going to struggle,” Reinhart said.
From NJ Spotlight:
Even as real-estate agents see encouraging demand for Shore rentals, and home prices in parts of New Jersey creep gradually higher, analysts and academics say foreclosures continue to slow the state’s housing market and economy.
In some areas, such as previously fast-growing counties on the suburban fringe or long-depressed urban areas, low prices may be precursors of lasting economic change, according to the experts.
While the overall numbers have improved, New Jersey continues be among the leaders in both foreclosures and mortgages in trouble. Home values, which in much of the country have rebounded strongly since the Great Recession, continue to tread water in much of the state.
In some communities, the picture is worse. Atlantic City and Trenton rank first and second in the nation for foreclosures. Beyond those obvious sore spots, observers point to areas like Ocean County, where they say the twin blows of the recession and superstorm Sandy may be changing the long-term dynamics of the real estate market.
In the midst of preparing his firm’s latest, generally cheerful overview of housing trends around the nation, Daren Blomquist, a vice president of RealtyTrac of Irvine, CA, agreed to take a closer look at New Jersey markets.
“In many ways what we’re seeing in those areas, and for New Jersey overall, is running counter to the positive national trend,” Blomquist said. “There are still a lot of foreclosures, a lot of distressed mortgages and prices remain well below the pre-recession peaks.”
By RealtyTrac’s reckoning, median home prices reached their peak in New Jersey at $350,000 in July 2007, a bit later than most of the nation. Even after a jump in March, they are now at $265,000, 24.3 percent lower, the firm reported.
The numbers vary, but CoreLogic, another Irvine, CA, real-estate analytics firm, agrees that New Jersey is lagging. In April, it reported the state’s average housing prices rose by 1.6 percent during the previous year. But that gain was less than 46 other states and the District of Columbia. For the nation, the increase was 6.8 percent, CoreLogic found.
“NJ has experienced a high foreclosure rate and large number of distressed sales that have slowed home-value improvement,” said Frank Nothaft, CoreLogic’s chief economist.
Another housing-data firm, Seattle-based Zillow, calculated that housing values have dropped 11 percent in Atlantic City in 12 months, and 26.7 percent of mortgages there have negative equity, debt higher than the property value.
The problems extend beyond the city. Egg Harbor and Pleasantville were both down more than 7 percent, according to the firm. Dennis and Woodbine townships in Cape May County both saw double-digit drops in home values, though based on fewer sales. In Cumberland County, Bridgeton homes are worth only an average of $68,300, but their prices are also falling.
In Mercer County, Zillow showed the average value of a Trenton home is $83,000, down 1.4 percent. Prices are nearly twice as high in Neighboring Hamilton Township, but they dropped 1.9 percent, the firm found.
In Newark, where for a time housing values were coming back slightly faster than the state average, recent CoreLogic report shows them stagnant or receding, down half a percent in the most recent findings.
In contrast, housing data from the firms show Philadelphia prices rising 29 percent. Brooklyn has become one of the least-affordable places in the country compared to its historic norms. The New York City area as a whole, including Jersey City, saw a 4.3 percent year-over-year price increase.
Asked to assess these trends, Professor Charles Steindel of Ramapo College, the state’s former chief economist, pointed to the same culprit in the problem areas. “Foreclosures are still high” in much of the state, he said.
But Steindel added he is “a little encouraged that home prices are falling” in some of those places. To an extent, that reflects properties moving through foreclosure and coming to market at lower prices, he said. “The number of (new) cases is finally coming down,” Steindel said, creating a path toward potential improvement.
From the April MarketNews from Otteau Group:
NJ Purchase Contracts in March Strongest Since 2005
Home purchase demand in New Jersey increased for the 19th consecutive month in March, rising to more than 10,000 home-purchase contracts. This reflects a 23% increase compared to the same month one year ago. The March tally was also the most during that month since the cyclical high in 2005 at the end of the subprime mortgage boom.
On a year-to-date basis (January-March) home purchase demand in New Jersey continues to expand, increasing by 21%. The majority of this year’s increase has been concentrated in homes priced below $400,000, as first-time ‘Millennial’ buyers begin to transition from rentership to homeownership, while the number of contracts concentrated in luxury homes priced higher than $2,500,000 has declined.
The imbalanced distribution of purchase contracts across the prices ranges has caused the statewide median home price to decline for the last three quarters. In Q1.2016, the median home price was $269,493, which was down by 2.7% from $276,915 one year earlier
Shifting to the supply side of the equation, the supply of homes being offered for sale continues to be relatively low which is limiting choices for home buyers. Unsold inventory in the state has however been slowly rising for the past 2 months, increasing by nearly 1,100 homes (2%) compared to one year ago. This is still about 23,000 (-31%) fewer homes on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 4.9 months of sales (non-seasonally adjusted), which is lower than one year ago when it was 5.8 months.
Currently, the vast majority (86%) of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices. Hudson is presently experiencing the strongest market conditions in the state with fewer than 2 months of supply, followed by Union, Essex, Somerset, Morris and Middlesex Counties, which all have fewer than 4 months of supply. None of the counties have an unsold inventory level equivalent to a supply of 12 months or greater, however those with the largest amount of unsold inventory are concentrated in the southern portion of the state including Cape May (9.4), Salem (9.9) and Atlantic (10.9).
Most of the latest numbers related to the housing market in New Jersey point to solid movement in the right direction, but can conditions ever return to the way they were before last decade’s recession?
New Jersey’s real estate market in 2015 was the most robust its been since the economic downturn that began at the end of 2007. On top of that, homebuilding in New Jersey, represented by the number of authorized permits, saw its strongest start in a decade during the first quarter of 2016.
But Patrick O’Keefe, director of economic research at CohnReznick in Roseland, said while it’s possible New Jersey’s housing market will perform even better this year, there’s one significant measure that can’t be overlooked and forecasts a doubtful bounce-back to pre-recession levels.
Figures released Thursday morning, O’Keefe noted, point to a near-record low for New Jersey’s homeownership rate — the share of housing units that are owned by the occupant.
“Back in 2005, the homeownership rate peaked at 71.3 percent,” O’Keefe told New Jersey 101.5. “Today’s it’s down at about 61 percent.”
According to O’Keefe, it’s unlikely New Jersey’s rate will ever return to those record levels. And that’s not only due to economic factors. “Attitudinal shifts” have resulted in a weaker desire to own a home compared to the years prior to the housing meltdown, he said.
At the same time, an elevated inventory of distressed mortgages and a shortage of inventory of single-family homes have resulted in a constrained rebound of housing activity in the Garden State. New Jersey currently has the largest share of mortgages that are 90 or more days in arrears, or already in the foreclosure process.
“We’ve got good news in several reports, but just not enough of that good news,” O’Keefe added.
New Jersey home prices, on average, could return to a level prior to the recession, according to O’Keefe. But there still would be a sizeable number of properties – purchased between 2006 and 2008, predominantly – with market values that have not fully recovered.
Homebuyers stepped up their purchases in March, signing contracts to buy existing homes at the highest pace in nearly a year.
A monthly index measuring pending sales increased 1.4 percent compared to February, and is also 1.4 percent higher than March of 2015, according to the National Association of Realtors. February’s reading was revised down slightly.
“Despite supply deficiencies in plenty of areas, contract activity was fairly strong in a majority of markets in March,” said Lawrence Yun, chief economist for the Realtors. “This spring’s surprisingly low mortgage rates are easing some of the affordability pressures potential buyers are experiencing and are taking away some of the sting from home prices that are still rising too fast and above wage growth.”
Pending sales, however, fell in the West, where prices have heated most. Homebuilders also saw steep declines in sales in that region last month, despite low supply of existing homes for sale.
Pending home sales in the Northeast increased 3.2 percent in March, compared to February and are 18.4 percent above a year ago. In the Midwest, sales were 0.2 percent higher for the month and 4.0 percent above March, 2015. Sales in the South rose 3.0 percent for the month but are still 0.6 percent lower than last March, and monthly sales in the West declined 1.8 percent, and are now 7.9 percent below a year ago.
The National Home Price Index, covering all nine U.S. census divisions, increased 5.3% annually in February, unchanged from the previous month, breaking a 10-month streak where the year-over-year figure increased over the previous month, the latest S&P/Case-Shiller report found.
“While one month does not make a trend, this is a sign that the US housing market may be stabilizing in the wake of strong price appreciation between 2012 and 2014,” said Ralph McLaughlin, chief economist for Trulia.
McLaughlin cautioned that although the S&P/Case-Shiller National Home Price Index is an important metric to watch, it’s worth noting that the measure is more reflective of price movements in premium homes rather than middle or lower tier homes.
According to the new report, the 10-City Composite increased 4.6% in the year to February, compared to 5.0% previously, as the 20-City Composite’s year-over-year gain was 5.4%, down from 5.7% the prior month.
On a monthly basis, after seasonal adjustment, the National Index recorded a 0.4% increase. The 10-City Composite posted a 0.6% increase and the 20-City Composite reported a 0.7% month-over-month increase after seasonal adjustment.
Only 10 cities increased for the month after seasonal adjustment.
“Home prices continue to rise, although more slowly, at a largely sustainable clip. But a deeper look at recent housing trends reveals a few troubling issues set to impact first-time and move-up buyers in the critical months ahead,” said Zillow Chief Economist Svenja Gudell.
“Inventory of entry-level and middle-tier homes is down sharply, and home prices in those segments are rising more quickly as demand stays strong and the economy keeps chugging along. At the same time, inventory at the top of the market is more available, and prices are growing far more slowly,” Gudell said.
“Heading into spring, buyers looking for the most expensive homes will find somewhat softening prices, a larger selection of homes to choose from and more limited competition. Entry-level and mid-market buyers – typically the housing market’s bread and butter – are likely to face stiff competition, rapidly rising prices and very limited inventory. The patience of many buyers will be tested in coming months,” Gudell added.
From National Mortgage News:
Home prices continue to make steady increases but are still off from their 2006 peak, according to Black Knight Financial Services.
Black Knight’s Home Price Index reported a value of $254,000 in February, an increase of 0.7% from the previous month and 5.3% from a year ago. The figure is up 27.5% from the market’s bottom recorded during the financial crisis, but still 5% below the peak recorded in June 2006.
The Pacific Northwest continued to be dominant over the rest of the country. Washington had the highest increase in home prices at 1.8%, while Oregon tied California for third at 1.3%.
Colorado also displayed impressive growth at 1.7% for the month, while Hawaii, Tennessee, Idaho and Utah all saw growth above 1%. Connecticut featured the most pronounced price compression, with a 0.4% decline for its home price index. Rhode Island and New Jersey were the only two other states to post declines, both at 0.2%.
The list of biggest movers by metropolitan area featured many likely suspects: San Jose, Calif., led the country with 2.4% HPI growth. Seattle, San Francisco and Denver also posted 2% growth or greater.
Metro areas across the Northeast dominated the list of cities with the biggest HPI declines. New Jersey had four cities on the list, while Massachusetts had three and Connecticut two. Atlantic City, N.J., reported the biggest drop in home prices, by 1%.
From Vanity Fair:
IIt’s beginning to look a lot like springtime in the Hamptons. Frost has cleared from the dunes; landscape artists are tending to hedge-grow after the wilds of winter on the east end of Long Island; and if you listen hard enough, you can hear the sound of 1,000 tricked-out Range Rovers rolling into town.
But a cool wind is blowing through the elite enclave, as Wall Street fears send a chill through a real-estate market that, until recently, has been white hot.
Home sales in the Hamptons, a second-home hub for financiers, New York’s famed families, and actual famous people alike, has fallen to its lowest level in three years, as concerns over global markets in the first quarter of 2016 kept buyers at bay.
The market was hit by a swift one-two punch at the start of the year: a slowdown in China and anemic oil prices caused the S&P 500 to suffer its weakest start to a year since 2009, and Wall Street bonuses—a major source of funding for high-end home purchases—took a blow, too. Hedge funds were coming off a dismal year and continued to bleed well into the first quarter, while lay-offs in the banking sector have continued apace.
All of this led the number of Hamptons home sales to tumble 19.2 percent in the three months through March year-over-year, according to a report published Thursday by real-estate company Douglas Elliman and appraiser Miller Samuel. At the same time, the median sales price fell 2.8 percent to $895,000 from a year earlier.
Sales of luxury homes—anything listed for at least $4.05 million—fell 30 percent to 45 deals in the first quarter, according to the report. On the even higher end, the number of purchases at or above the $10 million mark fell to 9 from 13 from a year earlier.
From the Press of Atlantic City:
South Jersey real estate continues to be hit hard by distressed properties, Atlantic County most of all.
Lenders started foreclosure actions against 399 homeowners in the county in the first three months of this year. There were also 476 notices of sheriff’s sale and 328 bank repossessions, all as reported by RealtyTrac, a company that researches foreclosure data nationwide.
Combined, this meant there was some level of foreclosure activity on more than 1,200 homes, or one out of every 106 homes in the county in the first quarter. That kept Atlantic County in the top position on RealtyTrac’s list of more than 3,100 counties across the U.S. for foreclosure activity.
Atlantic County Sheriff Frank Balles says that when he took office in 2009, “we were probably averaging about 200 to 250 (sales) a year. Last year, there were a little over 2,100.”
When he started, it was normal to see one or two people looking to bid. Now, he sees closer to 50, often more.
“We’re seeing the biggest year-to-year increases in the number of distressed assets hitting the market that we’ve ever seen,” says D’Alicandro, a past president of the Atlantic City & County Board of Realtors.
“These are properties not cared for and maintained by homeowners. In a lot of cases, they were abandoned, in some cases years ago. They may be damaged, vandalized and sometimes stripped on the way out,” he says.
“When you go from 5 to 6 percent bank-foreclosed properties up to double digits … being distressed sales, and when they’re selling for 25 to 30 percent below what they would sell for in good condition, that has an impact on the median sales price,” D’Alicandro added.
March figures from the New Jersey Association of Realtors show part of that impact.
The median sale price for an Atlantic County home last month was $184,000, down from $211,500 in the same month last year. That’s a 13 percent drop, NJAR reported.
Median prices also dropped in Cape May County, from $305,000 last March to $260,000 last month for single-family sales, a 14.8 percent cut.
NJAR also reported gains in Ocean County in both categories, with the total number of sales going up 18 percent and the median price hitting $261,000, a jump of 5.7 percent over a year earlier.
Still, foreclosures are a concern all around South Jersey, with the four local counties all showing up in the top 11 percent in nationwide foreclosure activity.
In Cumberland County, one home in every 159 had some foreclosure activity in the first quarter of this year. And in Ocean County, the rate was one out of every 221.
From the APP:
Assembly Speaker Vincent Prieto said he won’t move forward with any plans to eliminate New Jersey’s estate tax without a broader deal to increase the state’s gasoline tax.
Prieto, D-Hudson, stood along with a coalition of left-leaning groups Monday who lambasted plans by Gov. Chris Christie and some in the New Jersey Senate to eliminate the tax on estates worth more than $675,000.
Calling the move “unconscionable” and “another big giveaway for the wealthy,” leaders from the state’s education union and environmental, anti-poverty and other groups said the elimination of the estate tax would blast a $450 million hole in the state’s proposed $33.8 billion budget for next fiscal year. That, they said, would benefit only the wealthy while cutting programs that help the state’s poor and middle class.
“We would not be able to withstand a total repeal,” Prieto said. “It has to be a part of a bigger picture in my mind.”
Also, part of that picture would be a gas tax hike to fund the Transportation Trust Fund, which is projected to run out of money for new projects this summer. Meanwhile, Christie’s administration said last week that the governor is waiting for lawmakers to send him an outline of what that deal might look like.
Prieto’s announcement is a hurdle for a bill making its way through the state Senate that would phase out New Jersey’s estate tax entirely over five years. The state has the lowest thresholds for estate taxes at $675,000.
It also came on the same day state Sen. Jennifer Beck, R-Monmouth, proposed compromise legislation that would increase New Jersey’s estate tax threshold to $2.5 million, the average level for states that tax estates.
Prieto said he could support increasing New Jersey’s estate tax threshold to the federal level of $5.4 million or possibly a phase-out, but only after the state started reaping the benefits from replenishing the transportation fund.
The Lower Hudson Valley housing market continued to show its strength, as the total number of first-quarter home sales in Westchester, Rockland and Putnam counties went up by 14.5 percent over the same period last year, according to the real estate sales report released Monday by the Hudson Gateway Association of Realtors (HGAR).
Market conditions in Westchester and Putnam were also rated strong and stable in another quarterly report recently issued by Douglas Elliman.
The HGAR report shows that 1,847 homes sold in Westchester County in the first quarter, up 14 percent from the prior year quarter.
Sales activity in Westchester — along with Long Island and Fairfield County in Connecticut — since last year has remained strong because more consumers are seeking affordable homes in surrounding suburbs, said Jonathan Miller, CEO and president of Miller Samuel Inc., a real estate appraisal and consulting firm, which monitors 18 real estate markets in the region.
“Affordability is dropping in New York City, and we’re seeing the pressure of pushing out to the suburbs in terms of property demand,” said Miller, who is the author of the Elliman report.
According to Miller’s report, Westchester’s overall sales volume stabilized in the first quarter: The number of closed sales was 1,640 while the figure was 1,647 in the prior year quarter. But the number of total sales under contract surged 16.3 percent to 2,338 over the same period. During the first quarter, 1,928 contracts were signed, up by 19.2 percent over the same quarter last year.
The luxury market in Westchester — defined by the Elliman report as the upper 10 percent of all single-family sales — continues to show weakness, with median sales price falling 16.8 percent to $1,985,000 over the same period.
The number of the first quarter sales in Rockland went up 9.4 percent to 467 over the same period last year; the median sale price of single family homes remained almost the same at $399,000.
“Over the past year, we have seen a very balanced market,” said Rosemarie Pelatti, a real estate broker and owner at Keller Williams Realty Hudson Valley in New City, noting that the trend continues in 2016.
The number of sales in Putnam has continued to rise over the prior year level, mirroring the growth in Westchester.
A total of 227 homes were sold in the first quarter, up by 26.8 percent from the prior year quarter. Of those sales, 87.2 percent were single-family homes and 12.8 percent were condominiums, according to the Elliman report.
The median sale price was $290,000, up by 3.6 percent from a year before.
Miller said Putnam’s market growth is also “connected to what’s happening in New York.”
From the Record:
When Kevin Eleby started commuting by train to New York City in 2001, the station in downtown Paterson was nearly empty. Every morning he climbed the stairs to the platform to wait alongside three other riders.
Nearly a decade passed. A few new people started showing up. Then a few more. A few weeks ago, when his train rushed into the station at 7:39 a.m., Eleby was surrounded by a crowd of 45 |people.
“This place was deserted. Now you come up here and it’s full. Look at all these people!” said Eleby, 48, a Paterson resident who works in information technology for Memorial Sloan Kettering Cancer Center in Manhattan. “It’s a big change.”
It’s a change that’s taking place across New Jersey and in some of the nation’s largest metropolitan regions. During the housing boom of the early 2000s, New Jersey’s population grew by 2.8 percent. But car-dependent suburbs saw their populations grow by 4.1 percent, according to a study by Tim Evans, research director at New Jersey Future, which advocates for transit-oriented development. Meanwhile, neighborhoods within a half-mile of a transit station barely grew at all.
Then came the 2008 recession — and a major shift in population and commuting patterns.
Statewide, population growth slowed, dropping to 1.5 percent from 2008 through 2014, the latest year for which data is available. Car-oriented suburbs grew at roughly the same rate.
But during the same period, transit-oriented neighborhoods saw their population surge. Since the recession, they have accounted for 38.3 percent of the population growth in New Jersey, Evans found.
“It’s really dramatic, actually, how little these transit places were growing before 2008 and now they’re growing really quickly,” Evans said. “And the outlying counties that were the locus of sprawl are now losing population.
In Bergen and Passaic counties, many older suburbs grew up along train lines, and many newer ones are dependent on cars. That means the change in population patterns is not as stark here as elsewhere around the state, Evans said.
Yet the pattern holds. Most car-based municipalities in North Jersey continued to grow after 2008, but at a slower pace than before the recession, Evans said. Places like Montvale, Cresskill, Upper Saddle River in Bergen County; Wanaque in Passaic County; and Pompton Plains in Morris County all saw their growth rates stagnate.
But many transit-oriented neighborhoods grew. In Bergen County, Fair Lawn, Lyndhurst, Garfield, Ridgewood and Glen Rock all went from losing population before the recession to gaining population since 2008.
“It’s definitely true that places near transit have been growing faster than they had for many decades before the recession,” Evans said.
In North Jersey, the epicenter of this transit turnaround is Paterson. The neighborhood within a half-mile of the city’s downtown train station lost 473 people every year on average between 2000 and 2008, according to census figures. In the years since, it has gained an average of 220 people annually.
One of those newbies is Antonia Felix, 25, who moved to an apartment near the station in December so she could catch a train into Manhattan, where she works as a nanny. Standing beside her on the platform one recent weekday morning was Natalie Petrardo, who rented an apartment nearby in November.
“I moved here so that I could catch the train to Secaucus,” where she works in a warehouse, said Petrardo, 26. “I don’t have a car, and the train service here in the morning is really good.”
Longtime commuters notice the difference. Marilyn Romero rides the train every weekday from Paterson to Ramsey, where she works at a dry cleaner’s shop.
“I was afraid when I started. There was nobody up here,” said Romero, 30, who started riding the train 15 years ago. “Now it feels safer with all these people here.”
That switch is even more impressive than it seems, Evans said. That’s because like most neighborhoods near train stations, downtown Paterson already was built-out in 2008, with little vacant land. Growth there meant developers had to renovate, expand or bulldoze existing buildings to make room for new housing units, often at more expense than building a house with a two-car garage on formerly rural land.
“The growth there is remarkable because it isn’t as easy to do in a place that already has used up all of its developable land,” Evans said. “You have to do more steps to make that happen.”