Housing Settling Down

The number of homes selling above list price is dropping, according to a recent Zillow report.

It seems that the current housing market is finally settling down. Not going down, just easing into a less frenetic pace. Yes, inventory shortages still plague the market, and interest rates are higher than they used to be, but houses are selling closer to their asking prices than they have in a while.

According to Zillow, during the last six months of 2018, the number of homes selling above list price has fallen.

For instance, in December, nationwide, only 19.4% of homes were sold above list price. This represented a three-year low.

New Jersey’s housing inventory has yet to see much relief. The total number of single family homes for sale in the month of December 2018 fell 10.6% year-over-year to just 29,954. The average sale price increased barely by 1% from $381,135 to $384,792.

In the cases of Monmouth County and Ocean County, inventory continued to crater by 18.6% to just 2,161 single family homes for sale  in Monmouth County, while Ocean County fell by 7.8% to 3,535 for December.

Notably, Zillow highlights not only did the share of homes that sold above list decline, but the average price above list dropped, too.

Those homes selling above list did so by an average premium of $5,800, according to the Zillow report.

According to the report: “So while the seller’s market appears to be waning, it’s certainly not over, and this is not a result of weak demand,” Zillow writes. “Homes are more likely to sell at the listed price as a result of convergence in the market expectations of buyers and sellers.”

Trends to Track – Home Prices and Equity Tick Higher

CoreLogic came out with its December report for home prices. They indicated that in December 2018, home prices climbed 4.7% from December 2017.

The CoreLogic HPI report projects that a future home price growth for 2019 is expected to be 4.6%; this rise comes despite the slowdown in the number of homes purchased and higher mortgage rates.

The ATTOM report was published, indicating that home equity for America’s 14.5 million properties increased significantly. The report showed that in the fourth quarter of 2018, 25.6% of all properties with a mortgage reviewed as equity rich.

The report also indicates that 834,000 more homes were considered to be equity rich, increased from the prior-year period.

The ATTOM Data Solutions report also reflected that 5 million U.S. properties were seriously underwater.

This designation is determined when the combined estimated balance of loan secured by the property is at least 25% higher than the property’s estimated market value. The total number of homes seriously underwater equaled 8.8% of all U.S. properties. The percentage of property seriously underwater has fallen from the fourth quarter of 2017, when 9.3% of all properties in the United States were seriously underwater.

As homeowners remain in their current homes longer, the homeowner equity is expected to continue to increase and appreciate. As those individuals who are seriously underwater or just underwater remain in their homes, they come closer to breaking even as the market continues to stabilize and strengthen from the crash of 2008.

The report showcases the percentage of homes with the highest share of home equity are on the West Coast, while those homeowners in the South and Midwest continue to claw their way back to even.

To gain a perspective on the appreciation of home values and those properties that are seriously underwater, we can look at the first quarter of 2012 when, according to the ATTOM report, 12,533,235 homes were seriously underwater. This represented 27.8% of all homes in the United States.

Within just two years that number of seriously underwater homes dropped to 9,065,741 or 17.5% of all homes.

The fourth quarter of 2018 measured just 5,001,482 homes that were seriously underwater and 14,566,363 that were equity rich, representing 25.6% of all homes.

“Among 7,590 U.S. zip codes with at least 2,500 properties with mortgages, there were 27 zip codes where more than half of all properties with a mortgage were seriously underwater, including zip codes in the Chicago, Cleveland, Saint Louis, Atlantic City, Detroit and Virginia Beach metropolitan statistical areas. The top five zip codes with the highest share of seriously underwater properties were 08611 in Trenton, New Jersey (70.3 percent seriously underwater); 63137 in Saint Louis, Missouri (64.8 percent); 60426 in Harvey, Illinois (62.3 percent); 38106 in Memphis, Tennessee (60.5 percent); and 61104 in Rockford, Illinois (59.6 percent),” reported ATTOM Data Solutions.

2018 – The Year of the Multi-Family Dwelling

2018 was the year of the multi-family dwelling.

The new report from CBRE for 2018 reflects that the net absorption rate was 286,600 units. This exceeded the 2017 total by approximately 10,000 units, making it the highest total since the year 2000.

Construction
In 2018, the level of construction activity was very strong, with 267,900 units completed, in just slightly less than the 274,000 reported for 2017. The numbers for 2018 though reflected the second highest total since the 80s. Most likely, the difference could have been attributed to two factors: a shortage of buildable lots and a shortage of skilled labor.

Multifamily Acquisitions
According to the CBRE report, a total of $173 billion was spent in 2018 on multifamily acquisitions. This represents the highest level in 19 years, CBRE’s report stated, up 12.1% from 2017.
■ Multifamily investment totaled $50.9 billion in the fourth quarter of 2018, which translates into the highest amount in the last 12 quarters.
■ CBRE noted that significant increases were registered in multifamily investment in both the fourth quarter and the year
■ The report indicates the overall vacancy rate was 4.5% in the fourth quarter – down 20 basis points from the prior year period.
■ The reported fourth quarter vacancy rate for 2018 was the lowest in any fourth quarter since 2000.
■ CBRE projects that the strong investments of 2018 are expected continue in 2019.
■ CBRE also cautions that total investment is possible to decline slightly in 2019.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.

CoreLogic Reports Home Prices Climb 4.7% in 2018

In a press release, CoreLogic reported home prices increased by 4.7% year-over-year in December.

Headlines:

Twelve-month home-price growth rate was slowest since August 2012

Annual average price growth in 2018 was 5.8%, with annual average price growth forecast to slow in 2019 to 3.4%

After peaking in March, December marked the ninth consecutive month of decelerating annual HPI growth in the United States

CoreLogic Home Price Index (HPI™) and HPI Forecast™ for December 2018, which shows home prices rose both year over year and month over month. Home prices increased nationally by 4.7% year over year from December 2017. On a month-over-month basis, prices increased by 0.1% in December 2018.

The CoreLogic HPI Forecast indicates home prices will increase by 4.6% on a year-over-year basis from December 2018 to December 2019. Comparing the annual average HPI and HPI forecast for 2018 and 2019, average price growth is forecasted to slow from 5.8% to 3.4%. On a month-over-month basis, home prices are expected to decrease by 1% from December 2018 to January 2019. The CoreLogic HPI Forecast is a projection of home prices calculated using the CoreLogic HPI and other economic variables. Values are derived from state-level forecasts by weighting indices according to the number of owner-occupied households for each state.

When looking at only the top 50 markets based on housing stock, 40% were overvalued, 18% were undervalued and 42% were at value. The MCI analysis defines an overvalued housing market as one in which home prices are at least 10 percent above the long-term, sustainable level. An undervalued housing market is one in which home prices are at least 10% below the sustainable level.

NJ Employment Dips

New Jersey as reported a slight loss in the number of employed within the state by approximately 12,000 year-over-year for the month of December 2018.

The state’s unemployment rate has remained steady from November 2018 to December 2018, but the year-over-year comparison for unemployment has fallen significantly from 4.7% to 4.0%.

Year-over-year, the private sector of the state has gained 61,900 jobs from December 2017.

The bulk of those jobs appear to be coming in the manufacturing section, which gained 9,200 jobs year-over-year.

The hourly earnings for manufacturing has increased by nearly $2 an hour from $21.60 to $23.14.

Since 2008, the state has employed of a 4.5 million people consistently. That number has ranged between 4,540,000 to 4,588,000. The state over the last 11 years has never dropped below that and has never had as many individuals working in its labor force.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.

NJ Real Estate – Inventory Shortage

In retrospect, back in 2011, there were 8,300 single-family homes listed for sale by NJ Realtor. Looking at the inventory for December 2018, the number of single-family homes has fallen to just 5,458 homes on the market.

Well, so we can look at the days on market for an average home before it’s sold, and that has dropped by nearly 7% over the last year. Currently the month supply of inventory on the market is 4.3 months.

Still the price of a single-family home, townhouse and senior adult home have all increased between 3%, 1%, and 5%, respectively.

What is more important in this market stage is the strength of the economy. Friday’s unemployment figures reported 304,000 new jobs were created with an unemployment rate of 4%. Experts were projecting between 170,000 and 180, 000 new jobs being created for the month of January.

Projections for home appreciation are being estimated to be between 3- 4% for 2019. Also new construction will still not be able to catch up with the demand for new housing as the shortage of homes on the market will continue for at least another 18 months.

With the Great Recession, New Jersey real estate took a huge hit and has been clawing its way back ever since. Back in September of 2011 there were 57,000 homes for sale on the market; that number in December 2018 is almost 30,000 homes. This represents almost a 50% decrease in the number of homes for sale.

Demand is still there, it’s just not breathing as heavy.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.

New Jersey Pending Home Sales

The headlines for December real estate sales all highlight the dropping pending home sales, falling new listings and the decrease in closed sales, but when we look at the actual inventory of homes on the market, the 5%, 1% or 3% drops, respectively, there is no panic in this market. With inventory shortages still plaguing the New Jersey market, the 10% and 11% drops in homes on the market and month supply of homes for sale clearly tell a different story.

Even though mortgage rates have risen over the last 12 months, the average price for a home in New Jersey has climbed in the last year by 2.2%, that factors in the higher home mortgage rates.

Another important metric when it comes to determining the health of a market is seen in how long it takes for a home to sell.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.

Monmouth County Happenings for February

Events happening in Monmouth County in February

■ February 2 from 12-2:30 p.m. – Purls of Wisdom Knitting Bee Saturday
Historic Longstreet Farm, Holmdel – Share patterns, get some work done on a forgotten project, or learn a new hobby during this informal knitting bee. Farm staff will be on hand to help newcomers with casting on or to teach the basics. More seasoned knitters are welcome to share their love of knitting. FREE!

Related image

■ February 3 from 12:30-4:30 p.m. – Open Ceramics Sunday
Thompson Park Creative Arts Center, Lincroft. A large selection of bisque-fired pottery pieces to glaze and make your own. Children age 12 and under are welcome but must be accompanied by an adult. The cost is $6 per hour plus price of bisqueware; cash or check only.
■ February 6, 13, 20 & 27 from 11-11:30 a.m. – Nature Story Time Wednesdays
Manasquan Reservoir Environmental Center, Howell. Nature-themed stories items related to each story. Open to ages 2-5 years with adult. FREE!
■ February 9 at 9 a.m. – Roving Naturalist Saturday
Freneau Woods Park, Aberdeen – Meet in the Activity Center parking lot.
Join the Roving Naturalist for a walk and discuss seasonal points of interest, search for signs of wildlife, and identify a bird or two.
This is a 1.5-2 hour program, but feel free to join in or drop out at any point. Dress for the weather as light rain and snow are not deterrents. FREE!
■ February 10 1-3:30 p.m. – The Art of Storytelling Sunday
The Monmouth County Park System invites youngsters age 8-11 to join award-winning children’s author Janine Kimmel for The Art of Storytelling. Held from 1-3:30 p.m. on Sunday, February 10 at the Dorbrook Recreation Area Program Building, Colts Neck, this imaginative workshop focuses on the art of storytelling. Participants will travel through a magic door and create their own illustrated story. The cost is $30 per person; pre-registration required. There is also a $10 supply fee payable to the instructor at the beginning of class. For more information or to register, visitwww.MonmouthCountyParks.com or call 732-842-4000, ext. 1.
■ February 10 from 1-3 p.m. – Blacksmith Demonstration Sunday
Historic Longstreet Farm, Holmdel. Come see what the Blacksmith is making in his workshop. FREE!
■ February 13 – NJ State reptile, “The Bog Turtle,” is the subject of Monmouth Audubon program
Zoologist Bill Pitts will present his program, “The Bog Turtle: New Jersey’s State Reptile,” at the Monmouth County Audubon Society meeting on Wednesday, February 13 at 8:00 p.m. The public is welcome; admission is free.The Bog Turtle was named New Jersey’s State Reptile on June 18, 2018, following a successful petition campaign begun by science students from the Riverside Elementary School in Princeton, who were concerned with the turtle’s threatened status. The NJ Endangered and Nongame Species Program estimates that there are fewer than 2,000 of these inhabitants of groundwater-fed freshwater wetlands left in the state. Once abundant in New Jersey, this secretive, palm-sized turtle is found today only in rural areas such as Sussex, Warren, Hunterdon and Salem counties. Learn all about this charismatic creature’s natural history in New Jersey and conservationists’ ongoing effort to protect the Bog Turtle and increase its habitat and population in this entertaining program. Free and open to all. Meetings are held the second Wednesday of each month September through May at the Tower Hill Church, 255 Harding Road, Red Bank; guest speakers address a wide variety of nature-related topics, and refreshments are provided.
■ February 14 from 10-11:30 a.m. Wondrous Winter Walk Thursday at Hartshorne Woods Park
Meet in the Rocky Point section parking lot in Highlands.
■ February 16 from 11 a.m.-3 p.m. – Cookstove Demonstration Saturday
Historic Longstreet Farm, Holmdel
■ February 17 at 9 a.m. Sunday, at Huber Woods Environmental Center, Middletown
A Park Naturalist will explore the parks in celebration of the Great American Backyard Bird Count.

The Big Chill Hits NJ

Predictions for the polar vortex to hit New Jersey with sub-zero temperatures starting on Wednesday night into Friday will range from sub-zero to single digits.
Forecast is warning individuals that this wind chill could result in frostbite on exposed skin within 30 minutes. The chill advisory goes into effect on Wednesday night at 7 p.m. and will extend into Friday. There is the possibility of some snow dusting but nothing to produce any significant accumulation.
Predicted Temperature With Wind Chill:

shallow focus photography of person facing trees

  • Red Bank: 7 p.m. tonight, 19 (1); 7 a.m. Thursday, 5 (-15)
  • Asbury Park: 7 p.m. tonight, 20 (3); 7 a.m. Thursday, 5 (-14)
  • Howell: 7 p.m. tonight, 18 (1); 7 a.m. Thursday, 4 (-10)
  • Toms River: 7 p.m. tonight, 19 (2); 7 a.m. Thursday, 4 (-14)
  • Atlantic City: 7 p.m. tonight, 23 (7); 7 a.m. Thursday 8 (-10)
  • Wantage: 7 p.m. tonight, 8 (-9); 7 a.m. Thursday, -3 (-19)
  • Paramus: 7 p.m. tonight, 14 (-4) ; 7 a.m. Thursday, 2 (-15)
  • Jersey City: 7 p.m. tonight, 15 (-4); 7 a.m. Thursday, 3 (-15)
  • Morristown: 7 p.m. tonight, 14 (-3); 7 a.m. Thursday, 1 (-16)
  • Woodbridge: 7 p.m. tonight, 17 (0); 7 a.m. Thursday, 3 (-14)
  • Princeton: 7 p.m. tonight, 16 (-2); 7 a.m. Thursday, 4 (-11)
  • Trenton: 7 p.m. tonight, 17 (0); 7 a.m. Thursday, 4 (-11)
  • Manalapan: 7 p.m. tonight,16 (2); 7 a.m. Thursday, 3 (-10)
  • Cherry Hill: 7 p.m. tonight, 18 (1); 7 a.m. Thursday, 5 (-10)
  • Egg Harbor: 7 p.m. tonight, 20 (4); 7 a.m. Thursday, 4 (-12)
  • Millville: 7 p.m. tonight, 19 (2); 7 a.m. Thursday, 4 (-12)

New Jersey Dairy Farmer Crisis

Disruption is taking place all over the country. One of the areas that it appears to have taken a significant toll is in New Jersey within its dairy industry.

closeup photo of cow

In the 1950s New Jersey accounted for approximately 500 dairy farms. In 2007, it could account for just 225. Now in 2019 that number has fallen dramatically to just 47 dairy farms.

The industry in total sales of milk and of milk cows came to just $27 million. Compared to sales from blueberries ($84 million), peaches ($44 million) and tomatoes ($39 million), milk is way down there.

During the summer of 2018, the New Jersey Department of Agriculture held a summit.

Even though the farmers gathered together in October, it didn’t seem that they were able to put something together on the table that would stay the dwindling number of dairy farmers.

Farmers sell their milk to processing plants or co-ops which pasteurize, homogenize, and bottle and distribute the milk. The price the processors pay the farmers is set by the United States Department of Agriculture through its Federal Milk Marketing Order [FMMO].

The problem is the amount that processors pay American farmers, which fell from $24 for 12 gallons of milk in 2014 to approximately $14 to $16 for 12 gallons of milk in 2015.

It comes down to simple math: the amount that it costs to produce 12 gallons of milk is between $18 to $20.

On top of that, consumers are turning to non-dairy choices. Almond, soy and coconut milk have grown by about 61% since 2012. Now dairy sales have fallen by 15% during the same period.

Most of the 47 remaining dairy farms in New Jersey are family-run farms.
Considering all of that, the wonderful state of New Jersey is taxing farmers some of the highest property taxes on agricultural land in the country. Go figure that one. So much for the Garden State. So going into 2019, New Jersey’s milk farmers continue to face some very difficult decisions probably in the near future.

Foreclosures Fall Nationally

The US foreclosure market for 2018 improved from 2017 with only 624,753 properties reporting to be in foreclosure. This is down 8% from 2017, and also down 78% from its peak of 2.9 million back in 2010. According to ATTOM Data Solutions, this is the lowest level that it has been since 2005.
The 624,753 properties with foreclosure filings that were reported in 2018 accounted for less than 1/2 of 1% of all US housing units. This is down from the .51% in 2017 and also down from its peak of 2.23% reported back in 2010.

In 2018, states with the highest percentage of foreclosures were:
New Jersey 1.33%
Delaware .96%
Maryland .86%
Illinois .74%
Connecticut .72%

New Jersey has held the top spot since 2015.

According to the report, it appears that the effects of the housing crisis have come to a conclusion and there is evidence that most of the distress from the prior housing crisis has now been cleaned up. According to the announcement, there appears to be some evidence of some properties and some regions reporting higher foreclosure starts in more than one third of all the states and local housing markets. Some of the distress was caused by natural disasters, specifically in Houston, where there was a hurricane and in California, where they were wildfires.

According to the announcement by ATTOM Data Solutions, “Lenders repossessed 230,305 properties through foreclosure (REO) in 2018, down 21 percent from 2017 and down 78 percent from a peak of 1,050,500 in 2010 to the lowest level as far back as data is available — 2006.

“While completed foreclosures (REOs) are on the decline, California and Florida combined have totaled nearly 1.5 million over the last 10 years. States to lead the nation in REOs also include Michigan (327,783), Texas (313,930), Georgia (299,394) and Illinois (303,404).

“Counter to the national trend, five states posted a year-over-year increase in REOs, led by New Mexico (up 20 percent); North Dakota (up 15 percent); Alaska (up 8 percent); Connecticut (up 5 percent); and Maine (up 5 percent).
Metropolitan statistical areas with a population greater than 200,000 that saw a year-over-year increase in REOs included Flint, Michigan (up 161 percent), Beaumont, Texas (up 63 percent), Albuquerque, New Mexico (up 27 percent), Greeley, Colorado (up 24 percent) and Houston, Texas (up 17 percent).”

18 states posted year-over-year increases in foreclosure starts in 2018:
Minnesota + 29%
Texas + 15%
Michigan + 15%
Florida + 13 %
Louisiana + 5%
Delaware + 2%

Subscribe

Place an Order Today