Thursday, March 31, 2016

Fwd: MarketNEWS March 31, 2016 Edition


MARKETNEWS by OTTEAU.com
March 31, 2016

 

Inside This Issue...

 

  • EconomicTRENDS
  • For-Sale HousingTRENDS
  • For-Rent HousingTRENDS
  • MortgageTRENDS
  • ForeclosureTRAC
  • Recommended Reading
  • EventTRAC
  • MarketTRAC
  • Attention Builders & Developers
  • About Us
  • Quick Links

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EconomicTRENDS

Pace of National Job Growth Remains Slower in 2016

After a year end revision, the US economy realized a gain of 2,744,000 non-farm jobs in 2015, reflecting a 9% decline from the 'Best in a Decade' gain of 3.1-Million in 2014. Based upon preliminary figures, the pace of job growth is off to a slower start in 2016 with 414,000 jobs added in January-February, or 15% less than in the same period last year. Since the national economy 'technically' achieved full recovery of the jobs that were lost during the recession more than a year ago, it has gained an additional 5.1-Million non-farm jobs, and 5.4-Million private sector jobs. All of this is a bit exaggerated however because part-time and temporary contract workers are counted equally to full-time employment by the BLS. Taking this into account, the US Economy still needs to create an additional 3-Million jobs to achieve the same employment situation that existed prior to the start of the recession in December 2007. Still, the national economy continues to make progress with more workers being employed with each passing month.

NJ Jobs Decline after 'Best in a Decade' Year of Job Growth

After a record-breaking year of growth, jobs have declined for the past two months totaling a loss of 24,300 jobs YTD. Still, there is cause for optimism concerning the future however, as the pace of New Jersey's economic recovery accelerated in 2015, representing a 76% increase over 2014, and the recent declines are only based upon two months of data, which are subject to revision. Supporting this assessment is a recent analysis published by the Federal Reserve Bank of Philadelphia indicating that the projected growth of the New Jersey's economy will outpace most other states over the next 6 months. Also positive is that New Jersey's unemployment rate fell to 4.3%, which is its lowest level since August 2007.
 NYC Jobs Decline after Strong 2015
Due to a combination of factors, New York City's economic downturn resulting from the recession began later, declined less, and began recovering sooner than the rest of the country. As a result of these factors New York City achieved full recovery of the jobs that were lost during the recession in May 2011, which was 3 years earlier than for the US overall. Since then, NYC has gone on to add an additional 600,300 jobs, which is nearly triple (286%) the total jobs that were lost during the recession.
 
NYC's economy gained 87,100 jobs in 2015 signaling a modest slowdown compared to the past five years. While the 2015 pace still signals strong job growth, the trend over the past 3 years suggests slower economic growth ahead. Also concerning is that NYC has lost 64,800 YTD, however this is only based upon two months of data which are subject to revision. Either way, this bears close watching as the viability of planned construction projects in Manhattan, the Outer Boroughs and Hudson County are largely dependent on continued economic growth in the Manhattan employment center. Adding to this concern is the potential for an economic recession in the next few years which has historically been a disruptive force for new construction projects.
 

For-Sale HousingTRENDS

NJ Purchase Contracts Record an Impressive Gain in February

 
Home purchase demand in New Jersey increased for the 18th consecutive month in February rising to more than 8,000 home-purchase contracts. This was the highest number of purchase contracts recorded in the month of February since 2005, reflecting an impressive 26% increase compared to the same month one year ago.
 
On a year-to-date basis (January-February) home purchase demand in New Jersey continues to expand, increasing by 22%. The majority of this year's increase has been concentrated in homes priced below $600,000, as first-time 'Millennial' buyers begin to transition from rentership to homeownership.
 
 
 
 
While home purchase demand continues to rise, the inventory of available homes remains constrained in New Jersey. The number of homes being offered for sale in the month of February increased slightly by 1,400 homes (3%) compared to one year ago. Still, this is about 26,000 (-35%) fewer homes on the market compared to the cyclical high in 2011. Today's unsold inventory equates to 5.9 months of sales (non-seasonally adjusted), which is less than one year ago when it was 7.2 months.
 
Currently, more than three-fourths 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 4 months of supply, followed by Union, Essex, Somerset and Morris Counties, which all have fewer than 5 months of supply. All of the counties with an unsold inventory level equivalent to a supply of 12 months or greater are concentrated in the southern portion of the state including Atlantic (13.6) and Salem (14.3).
 

For-Rent HousingTRENDS


 
Demand for rental apartments continues to expand in NJ with statewide occupancy rates being amongst the highest in the US. Statewide vacancy increased slightly to 3.4% (20 basis points). Nationally, the average vacancy rate increased by 10 basis points to 4.4%. Still, the statewide and national vacancy rates remain well below their 2010 peak with vacancy rates having fallen by 180 bp and 360 bp, respectively.

Central NJ currently has the lowest vacancy rate in the state (2.4%), followed by Southern NJ (3.4%). Northern NJ continues to have the highest vacancy rate in the state due to the accelerating pace of new construction deliveries, which are occurring at a rapid pace in locations with direct rail access to Manhattan. Focusing specifically on Hudson County, the vacancy rate stood at 6.5% in 2015.Q4, which is considerably higher than what exists at the state level. This increase is attributable to the continuing absorption of more than 6,000 new apartments that have been built over the past 5 years.
 

MortgageTRENDS

As predicted, mortgage rates slowly inched their way up during the month of March, peaking at 3.73% during the week of March 17th. The average commitment rate for the 30-year fixed rate loan is 3.71% nationally. During the same week last year, mortgage rates were averaging 3.69%, or about the same as they are currently.
 
According to Freddie Mac, the Federal Reserve's decision last week to maintain the current level of the Federal funds rate combined with the reduction in their forecast for growth triggered a 3-basis point drop in the 10-year Treasury yield. As a consequence, the 30-year mortgage rate declined 2 basis points to 3.71%. However, comments this week by several members of the Fed, indicated that a June rate hike is still on the table.
 

ForeclosureTRAC

The percentage of delinquent mortgage loans in New Jersey that are 90+ days past due remained at 7.5%, which is unchanged from the prior month down from a peak of 11.4% in September 2012. New Jersey continues to have the highest rate in the nation followed by 6.2% in New York. Rounding out the list of states with the highest delinquency rates are Florida (5.2%), Mississippi (4.9%), Maine (4.7%), Rhode Island (4.5%) and Maryland (4.5%). Nationally, the percentage of 90+ delinquent mortgage loans also remained unchanged from the prior month at 3.2%.
 
Due to New Jersey's high rate of mortgage delinquency, the pace of foreclosure filings in the state remains elevated at a time when other states are experiencing decreasing activity. New Jersey foreclosure filings in 2015 recorded a 14% increase over the prior year, rising from 67,350 to 76,800. However, based upon YTD figures, foreclosures are on pace for a decline in 2016 with filings estimated to be 68,100. Still, the accelerated pace of foreclosure filings in New Jersey will create additional constraints on home prices in those places where they are most concentrated which are in the state's urban and rural fringes, as well as in Atlantic County which currently has the highest foreclosure rate in the nation.

Recommended Reading

 
These N.J. counties experienced the highest population growth
NJBIZ / njbiz.com
 
N.J. housing expert sees 4 percent rise in prices this year
The Record / northjersey.com
 
The Top 12 Cities Where Affluent Millennials Live
National Real Estate Investor / nreionline.com
 
Jersey City residential tower experiencing a leasing rush
NJBIZ / njbiz.com
 
Is the Hotel Sector Due for a Setback?
National Real Estate Investor / nreionline.com
 
Fannie Mae, Freddie Mac set to reduce mortgage balances
Housing Wire / housingwire.com
 
Marriott Back in the Picture as Starwood Accepts its Higher Offer
Co Star / costar.com
 
KRE Group, Oxford Realty and Verde Capital acquire rental property in Plainsboro
NJBIZ / njbiz.com
 
Exceptional Year Forecast for Self-Storage Assets
National Real Estate Investor / nreionline.com
 
Millennials: Delaying the Move from Gotham to Mayberry
National Real Estate Investor / nreionline.com
 
Former Newark Bears stadium sold to NYC developer for $23M
The Star Ledger / nj.com
 
Downtrodden Asbury Park Attracts Upscale Development
The Wall Street Journal / wsj.com
 
Christie to propose moratorium on towns suing to get property taxes from non-profit hospitals
The Record / northjersey.com
 
A money tree grows in Brooklyn
Appraisal Institute / valuation-digital.com
 
Do First Floor Retail Spaces Pencil Out for Multifamily Developers?
National Real Estate Investor / nreionline.com
 
Morgan Stanley: Global recession risk rises 30% this year
Housing Wire / housingwire.com
 
Legislature votes to put North Jersey casino expansion on ballot
NJBIZ / njbiz.com
 
12 Struggling Retailers
National Real Estate Investor / nreionline.com
 
Property tax cap growing weaker across North Jersey; more towns than ever exceed 2% limit
The Record / northjersey.com
 
Over a third of Manhattan new development condos sold in 2015 were later listed for rent: StreetEasy
The Real Deal / therealdeal.com
 
This Toilet Bowl Lights the Night
Builder Online / builderonline.com
 
O'Neill Properties Completes Remediation, Starts Construction of The Pointe at Sayreville
RE Business Online / rebusinessonline.com
 
Housing Myths, Debunked: Millennials, Not Baby Boomers, Are the Driving Force Behind the Recent Surge in Apartment Demand
Fannie Mae / fanniemae.com
 
CoreLogic- 1 million borrowers regained equity last year
Housing Wire / housingwire.com
 
Construction starts on Jersey City apartment project that includes affordable units
NJBIZ / njbiz.com
 
Developers Expanding Single-Family Build-for-Rent Market
CoStar / costar.com
 
High End Sales Will Continue to Slide in San Francisco, NYC
Core Logic / corelogic.com
 
Realtors: Millennials Warm up to Suburbia
 
Your new neighbor in the 'burbs? A millennial. Yes, really
CNBC / cnbc.com
 
Owner plans to reopen Revel hotel and casino by mid-June, report says
The Star Ledger / nj.com
 
Newark, property owners reach agreement on Triangle Park redevelopment by Prudential Center
NJBIZ / njbiz.com
 
N.J. bridges among the worst in the U.S., report shows
The Star Ledger / nj.com
 
Guess where N.J. ranks in the U.S. in property taxes
NJBIZ / njbiz.com
 
Investors See Opportunity in Value-Add Strategies for Class-B Multifamily Assets
National Real Estate Investor / nreionline.com
 
Which N.J. town cracked the nation's Top 25 most expensive ZIP codes?
NJBIZ / njbiz.com
 
Florida has seen more middle-class neighborhoods vanish than any other state
Fusion / fusion.net
 
Sports Authority Unveils List of 140 Store Closures
RE Business Online / rebusinessonline.com
 
Tourism climbs in NJ, with increased number of visitors around the Garden State
NJ Spotlight / njspotlight.com
 
Does N.J. have eminent domain power for Shore protection?
The Star Ledger / nj.com
U.S. Movie Theater Chains Consolidating Almost as Fast as CRE Brokerage Firms
CoStar / CoStar.com
 
Drexel, Brandywine Realty Trust Partner on Philadelphia's $3.5B Schuylkill Yards Development
Real Estate Business Online / rebusinessonline.com
 
Get lost in this N.J. mall? There's now an app for that
The Star Ledger / nj.com
 
Our port set a record for cargo in January, officials say
The Star Leger / nj.com
 
Discontinuation of Foreclosure Proceedings
Federal Deposit Insurance Corporation / fdic.gov
 
Sports Authority Files For Bankruptcy, Plans To Shutter 140 Stores
Forbes / forbes.com
 
Port of New York and New Jersey Container Volumes Set Record for January
The Wall Street Journal / wsj.com
 
Inside RXR's massive bet on the suburbs beyond NYC
The Real Deal / therealdeal.com
 
The struggle to build bigger in Nassau and Suffolk
The Real Deal / therealdeal.com
 
New Jersey Tax Climate Drove Away 2 Million People
NFIB / nfib.com
 
3 Things to Consider when Building for Millennials
 
The Best (And Worst) States to Retire
Fortune / fortune.com
 
Fortis seeking $272M sellout at 1 Seaport condo tower
The Real Deal / therealdeal.com
 
Related targeting nearly $700M sellout at Tribeca condo
The Real Deal / therealdeal.com
 
Affordable housing: Baby steps toward a fix
NJBIZ / njbiz.com
 
What are N.J.'s biggest spec real estate projects?
NJBIZ / njbiz.com
 
Developers really sweetening the pot to sell high-end condos
The Real Deal / therealdeal.com
 
McSam Hotel Group Breaks Ground on 89-Room Choice Hotel in Manhattan
Real Estate Business Online / rebusinessonline.com
 
See you later, CMBS?
The Real Deal / therealdeal.com
 
Vonage renews lease in Holmdel through 2023
NJBIZ / njbiz.com
 
Amtrak President: Gateway tunnel project 'top priority'
The Star Ledger / nj.com
 
A map of where U.S. job growth is spiking
MarketWatch / marketwatch.com
 
Woodmont Properties Receives 'Builder of the Year' Award
City Biz List / newyork.citybizlist.com
 
The Best Place to Be a Real Estate Agent
National Association of Realtors / realtor.org
 
Big banks are fleeing the mortgage market
Market Watch / marketwatch.com

EventTRAC

Below is a list of events at which the Otteau Group will be presenting information on real estate trends.  
 
April 2016
29Keynote Address for ICSC P3 Program - Wayne, New Jersey
 
May 2016
17 Private Lecture for Amboy Bank - Old Bridge, NJ
19 2016 Advanced CMA Workshop - More details coming soon!
25 2016 Advanced CMA Workshop - More details coming soon!
 
June 2016
2 Private Lecture for Haefele Flanagan - Philadelphia, PA
7 NJ Bankers Commercial Real Estate Conference - Iselin, NJ
 
Click here to discover the full menu of services that we provide.

Latest MarketTRAC Reports Now Available

The March 2016 MarketTRAC Monthly reports covering February's data are now available for download to Gold level subscribers.

 

Attention Builders & Developers 

Concerned about where to go from here?  Help is just a phone call away as our team is ready to provide micro-market updates and alternative product-type recommendations in an array of consulting services ranging from pipeline project evaluations, current project assessments, highest & best use analysis and entitlement proceedings.
  
Contact Us to find out more.

About Us


The lightning strike speed of today's information flow has accelerated the pace of change for real estate markets. As a result, trends that previously took years to develop can now unfold in a few short months. Our mission is to assist our clients in keeping pace with that change by providing insightful analysis and cutting edge pricing skills.

 

To accomplish this we have assembled a team of skilled professionals specializing in the complex field of real estate market analysis. With a broad based experience in real estate valuation and consultation, our firm engages in a diversified practice encompassing all property types.

  • Appraisal Services are provided to financial & lending institutions, developers & builders, attorneys, investors, relocation management service companies, governmental agencies, corporations and the public.

  •  Consulting Group - our consultants provide a wide array of services with respect to market analysis, project feasibility, demographic trends, project valuation and municipal entitlement proceedings.

  • Litigation Support is provided for matters requiring the valuation and corresponding expert testimony for eminent domain proceedings, contractual disputes, bankruptcy, tax appeals, equitable distribution, estate valuation and stigma related issues.

  • Brokerage Services - brokerage and advisory services are provided for commercial and land development property to developers, builders and investors.

  • OTTEAU.com offers a wide range of informational content and analysis of real estate trends including published and live session formats. MarketTRAC is an online market data service available for subscription on www.otteau.com. 

 

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All information contained in MarketNEWS, The OTTEAU REPORT Quarterly, and MarketTRAC Monthly is copyright protected, and may not be reproduced or disseminated without express written consent. Requests for use of this information must be submitted in writing and require prior written consent.
 
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