Republicans strike deal on sweeping tax overhaul

Republicans strike deal on sweeping tax overhaul

Reposted from Politico.com

 

Republicans struck a deal on a sweeping tax overhaul Wednesday, including steep corporate and individual rate cuts, and hope to have legislation on President Donald Trump’s desk by next week.

The agreement includes a 37 percent top tax rate for individuals, Senate Majority Whip John Cornyn (R-Texas) said, lower than either the House or Senate called for earlier. The corporate tax rate would be 21 percent, higher than the 20 percent in each chamber’s separate legislation, and would start in 2018 instead of being delayed until 2019 as the Senate propose

“Pass-through” businesses that pay taxes through the individual side of the tax code would get a 20 percent deduction, and businesses would get to immediately write off investments for the next five years. The corporate alternative minimum tax, which business groups had fought hard to get squelched in a final deal, is out, sources said. The AMT for individuals is retained, though fewer people are expected to pay it as the exemption would be raised to $1 million for couples.

The estate tax, long a target for elimination by Republicans, would be kept, Cornyn said, though the exemption would be doubled.

The final legislation would also end Obamacare’s mandate that all Americans have health insurance or face a fine.

The Senate plans to take up the bill first, on Monday, with a final vote by the chamber on Tuesday

Republicans plan to release the details of the agreement by the end of this week, a GOP aide said. They still need to finish writing the legislative text, and get a final budgetary accounting by the official Joint Committee on Taxation.

Getting tax reform across the finish line would give Republicans the major legislative victory that has eluded them all year and mark arguably the biggest change to the tax code in more than 30 years. The GOP wants to pass the compromise legislation before Christmas, despite calls from Democrats to wait and allow Democrat Doug Jones, who won the Alabama Senate race in a stunning upset Tuesday night, to vote on the measure.

The lower top individual tax rate is sure to play into Democrats’ complaints that the bill is a giveaway to the wealthy. But sources indicated Tuesday it was necessary to make other deals work, including one on the state and local tax deduction.

That agreement would allow taxpayers to choose a property tax deduction along with either an income or sales tax deduction, with a $10,000 limit, according to a source familiar with the plan.

The issue has been a major snag throughout the tax fight, with Republican lawmakers from the Northeast clamoring for the property tax deduction and those from California insisting on the income tax write-off. Republican leaders originally wanted to abolish the entire state and local tax deduction.

“From my perspective, the bill’s just getting better in the process,” said Rep. Tom MacArthur (R-N.J.), who supported the original House version despite opposing its elimination of the tax break.

The 21 percent corporate tax rate would be a major reduction from the 35 percent rate set in law now, though many businesses don’t actually pay the top rate. The nudge up from 20 percent would help make the plan’s math more workable given the strict budget rules Republicans have to follow in the Senate.

Trump indicated he would support a 21 percent corporate rate on Wednesday afternoon.

“We’re going to see where it ends up but it’s at 35 right now. If it got down to 21, I would certainly — I would be thrilled. We’ll see,” he told reporters at the White House before having lunch with GOP tax writers. “We haven’t set that final figure yet, but certainly, 21 is a very great difference.”

Another major issue that confronted negotiators was how to treat the pass-through businesses.

Sen. Ron Johnson (R-Wis.), a swing vote on the tax plan, told reporters he could support a smaller deduction for pass-through businesses than the 23 percent he had secured in the Senate’s draft of the plan “if it’s married to 37 percent top [income tax] rate” for individuals.

There was also a deal to allow homeowners to deduct the interest on up to $750,000 in mortgage debt, down from $1 million now. Negotiators dropped a House plan to tax as income college tuition waivers for graduate students working as teaching or research assistants.

As most Republicans welcomed the news that the final pieces of the legislation were falling into place, Democratic lawmakers and senior officials in the party began using Jones’ victory almost immediately after the returns came in on Tuesday night to demand the vote be delayed

“I am hoping that Republican leaders accept the will of the people of Alabama and halt their attempt to jam through massive tax cuts for the rich until Sen.-elect Jones is seated,” said Washington Sen. Patty Murray, the third-ranking Senate Democrat.

At the start of the conference meeting, Rep. Richard Neal of Massachusetts, the top Democrat on the House Ways and Means Committee, requested such a delay but was shot down.

“That motion is not available,” Chairman Kevin Brady (R-Texas) said.

Democrats pointed to a similar dynamic in 2010, when Republican Scott Brown defeated Martha Coakley in a political shocker in Massachusetts, denying Democrats a filibuster-proof majority in the Senate while they were deep in the middle of the Obamacare battle. Then-Senate Majority Leader Harry Reid declared that Democrats would not “rush into anything” in light of Brown’s victory in the special election.

But Republicans show no sign of relenting, and with a deal in principle, attention turns to a handful of Republican senators who have held considerable leverage in the tax fight.

Among them are Sen. Susan Collins of Maine, who had extracted a promise from Senate GOP leaders that the health care stabilization measures she’s sought will become law this year. She stressed on Wednesday that she doesn’t believe the top individual tax rate should be lowered, although she said she was more focused on bumping up the proposed 20 percent corporate rate in order to pay for other priorities.

“I haven’t seen the conference agreement,” she told reporters. “I always wait until the conference report is finished before making a final decision.

Negotiators also agreed to another of Collins’ priorities: keeping a deduction for un-reimbursed medical expenses that exceed 10 percent of a taxpayer’s adjusted gross income, but lowering the threshold to 7.5 percent of AGI for two years.

Sen. Marco Rubio (R-Fla.) hinted Wednesday that his vote for the plan was not guaranteed. He has demanded that, if his colleagues back off their promises to cut the corporate tax rate to 20 percent, they must use at least some of the budget savings to expand the refundability of the child tax credit, which allows people to get a tax refund even if the amount of the credit exceeds what they owe in taxes.

“If the conference agreement does not make some improvement on the refundability, the leadership knows where I stand,” he said Wednesday.

He declined to clarify other than to say he’s “not going to make public threats about anything. I’ll just do what I need to do.”

During the Senate’s consideration of its draft of the plan, Rubio offered an amendment that would have cut the corporate rate to 20.94 percent, and used the savings to make the child credit refundable against payroll taxes. It was defeated by his colleagues as Republicans held the line on a 20 percent corporate rate.

Sen. Bob Corker of Tennessee, the only Republican to vote against the Senate bill because of its impact on the deficit, was non-committal.

“I’m, just as I do on all of these votes, looking at where things are and voting as if I’m the deciding vote,” Corker said of the tax compromise. “Whether I am or not.”

Other Republicans once considered shaky were upbeat on Wednesday. Sen. Lisa Murkowski (R-Alaska) suggested she had some misgivings about the lower top individual rate, but said she was satisfied with the end product overall.

“Obviously, there was a great deal of give-and-take and back-and-forth and compromise,” said Murkowski, who won an opening for oil drilling in an Arctic wildlife refuge as part of the tax bill. “And everything doesn’t come out exactly as you would have liked. I think the product we’re at is a good one.”

 


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USAA members and their families can receive a substantial reduction on their next real estate transaction.


 

 

Real Estate Market Update Hunterdon County, NJ

Hunterdon County’s Real Estate Market Conditions | December of 2017

Hunterdon County’s Real Estate Market Conditions | December of 2017

Monthly Market Update Newsletter Banner

Get ahead of the real estate market economic and behavior drivers in Hunterdon County, New Jersey with Coldwell Banker Residential Broker sales associate, Joe Peters.

Hunterdon County New Jersey Real Estate Market Conditions (including):

  1. Clinton Township
  2. Flemington
  3. Raritan Township
  4. Readington Township
  5. Clinton

Based on the last full month’s contract sales, statistics show a supply of approximately five months. Normal market conditions average four to six months in Hunterdon County.  Units sold averaged 67 days on the market. 140 properties went “under contract” in November, down from 162 in the prior month. Newly listed properties in the same period totaled 147.

Hunterdon County Inventory Breakdown by Price | November:

New Listings Under Contract Active Listings Month’s Supply
Condos/Town Houses * 42 34 131 4
Over 55 Communities * 9 8 18 2
$000K to $199K 23 27 106 4
$200K to $299K 28 24 119 5
$300K to $399K 33 41 126 3
$400K to $499K 16 24 98 4
$500K to $599K 21 9 102 11
$600K to $699K 10 8 82 10
$700K to $799K 6 2 42 21
$800K to $899K 2 1 19 19
$900K to $999K 3 1 23 23
$1,000K and Up 5 3 63 21
Totals for November 147 140 780 6
Average Price $542,327 $375,793 -30.7%
Average DOM 67
* Included in $ breakdowns

83 % of sales in houses < $500,000

Hunterdon County Sales Breakdown Overview:

  • 17 %of sales in houses > $500,000
  • 5% percent of total sales (or 9 in total) in houses >$700,000

Hunterdon County Inventory Breakdown by Municipality | November

Active Listings Under Contract Month’s Supply
Alexandria Twp. 34 6 6
Bethlehem Twp. 20 3 7
Bloomsbury Boro. 7 0
Califon Boro. 6 1 6
Clinton Town 16 3 5
Clinton Twp. 72 9 8
Delaware Twp. 37 0
East Amwell Twp. 32 6 5
Flemington Boro. 17 1 17
Franklin Twp. 27 6 5
Frenchtown Boro. 26 1 26
Glen Gardner Boro. 15 1 15
Hampton Boro 11 4 3
High Bridge Boro. 21 6 4
Holland twp. 27 4 7
Kingwood Twp. 20 8 3
Lambertville City 18 9 2
Lebanon Boro. 3 4 1
Lebanon Twp. 36 4 9
Milford Boro. 9 0
RaritanTwp. 123 26 5
Readington Twp. 83 23 4
Stockton Boro. 1 0
Tewksbury Twp. 74 9 8
Union Twp. 35 5 7
West Amwell Twp. 10 1 10
Totals 780 140

Four areas in Hunterdon County reported no sales in the past month:

Hunterdon County Sales Breakdown Detailed:

  • Bloomsbury
  • Delaware
  • Milford
  • Stockton

Six areas reported one or two sales each last month:

  • Bloomsbury
  • Califon
  • Flemington
  • Frenchtown
  • Glen Gardner
  • W. Amwell

Hotspots:

  • Clinton/Clinton Township – 12 sales
  • Raritan Township – 26 sales
  • Readington Township – 23 sales

Hotspot areas equaled 44% of the sales last month. The average new listing coming on the market last month neared $542,327. The average price of a unit going “under contract” neared $375,792 (31% less).

Note: To get an accurate price point for your property, contact me. Coldwell Banker’s big data technology capabilities will put you at an advantage. Houses priced and marketed accurately sell fast, especially with a real estate industry veteran and local expert helping you navigate the process.

New Jersey’s Economic Drivers:

New Jersey Home Sales:

Home purchase demand increased by  9% in New Jersey during October giving the state its 6th consecutive month of increases. (These numbers run a month behind).  The same number were about 4% in 2016.

New Jersey experienced a compounded growth rate of 14% over the past two years. Sales increased by 5% YTD.

Activity concentrates in the <$400,000 market where Millennial buyers transition into home ownership. During the same period, all housing sales showed increases across all price points showing confidence in the new administration’s plans on taxes and deregulation.

At the same time, the number of homes offered for sale in New Jersey remained low and had recently decreased. The supply decreased by ~ 5,000 homes, compared to a year ago.  Currently, ~33,000 fewer (-46%) homes are on the market compared to the 2011 peak.

Current unsold inventory in New Jersey sits at just under 4.3 months vs. 5.2 months from a year ago.

Hunterdon County has ~10% less inventory, and Somerset County also has ~ 13% less inventory than a year ago.

The fear of increasing interest rates based on future increases, and the Fed’s slightly loosening lending standards affect the current market activity.

Interest Rates:

Interest rates at the end of October rose slightly to a level of just over 3.9% for a 30-year conventional mortgage. A fifteen-year conventional mortgage rests at just under the 3.3% range. Five and seven-year arms are at the 3.3% range as well.

Consumer fears of steadily rising rates and slowly rising home prices impact the current market. The Fed already instituted initial increases in rates and are talking about additional ones. Industry analysts forecast a 4.7% rate by the end of the year, 5% by the end of 2018, and 5.5% by the end of 2019. If the rate increases from 4% to 5%, buyers will lose 9% of their buying power.

Combine that with the steadily increasing prices and consumer confidence, and you have what is driving our current market activity

National Job Front:

US unemployment rate is 4.1%. This is the lowest it has been in over forty+ years ! And, it is a decline of over 70% from the peak which happened in 2009.

On the national level, we reached full recovery in May of 2014 with 2,700,000+ job gains in 2015. Revised figures show a gain of 2,242,000+ in 2016.  Expectations of 2,000,000 jobs in 2017 leave us at  -6% from 2016.

  • The national U-3 unemployment rate stands at 4.1%.
  • U-6 unemployment rate stands at 7.9%

Note: Due to full-time and part-time jobs counted equally by the BLS, numbers differ.  The US economy still needs to create an additional 2,600,000 jobs to reach the same employment rate that existed before the start of the 2007 to 2009 recession.

But, the momentum is building and the result is consumer confidence is the highest since 2004. Great news for the housing industry !

New Jersey Job Front:

NJ unemployment rate increased to 4.9%, bolstering consumer confidence remains high in NJ as well.

New Jersy job growth increased by 65,000+ in 2015, the best in 15 years. Projecting on those numbers, New Jersey’s recession losses would recover by 2017.  To date, we reached 96% of projected numbers. Finalized projected numbers showed 59,000 in 2016. Still good!  Although we still trail the nation, we’re on pace to add 25,000 jobs this year vs. 59,000 being added in 2016 (- 60%).

Thru October, 22,000 additional jobs were added YTD vs. 50,900 for the same period last year.

It should be noted that even though these numbers are disappointing, the levels of the jobs being added at is much higher than in the past several years (a silver lining?).

Rental Market Trends:

Tight Market!

Prior restrictive mortgage standards nudged Millennials to postpone home ownership until later in life than previously seen. These potential buyers live with parents or share rentals. We are starting to see them now re-enter the rental and first-time buyer markets. The average age of our first-time buyer changed from 29 to 37 years over the past five years.  Older Americans impacted by underfunded retirement plans due to the economic downturn rent houses too.

Rental prices in New Jersey rose ~ 10% annually, averaging over $1,300 per unit. Current vacancy rates in New Jersey rest at 3.5%, the lowest in the state and nation (which is at 4.5%).

The drop in New Jersey’s homeownership contributes to rental demand.  A 12+ year trend shows a decrease from  71% to 52%.  This 8% decrease compared to an 8% national decrease contributes to the slower recovery of home prices in the state.  One or two-person households with no children stands at 65%, reflected in our school population.

New Jersey Foreclosures:

New Jersey continues to face high foreclosure rate filings. Other states have begun to, or already have recovered. In tight real estate market, these foreclosures sell at a small discount.

Note:  Figures vary by local market, especially those walloped by Hurricane Sandy three years ago and rural and urban areas. We still rank #1 in the country at 4.0%, followed by NY, LA, MS, ME, FL, MD, PA, MD, RI and DE.  The national baseline number sits at ~ 1.7%.

2016 saw a 3% decrease over the prior year and added a ~ 71,100 filings, compared to 76,800 in 2015.  2017 YTD  foreclosure filings YTD have decreased sllightly with 2016 YTD.  Forecasts project 72,000+ or -3%, putting pressure home prices in concentrated areas.

 Real Estate Market Recap

  • Consumer confidence is high. This is mainly based on the job and stock market increases.
  • 80% of consumers perceive homeownership as part of the American Dream.
  • Millennials make up 24% of homeowners with room for expansion at the lower end of the market with adequate inventory supply.
  • Analysts five-year forecast indicates slow and steady price growth ay an annual 4%.
  • Central New Jersey’s trend for 2016 and early 2017 showed a surge in home sales, but not prices, clustered in < $500,000 market. In 2016, a 1% rise in prices tallied for New Jersey. As inventory builds, prices will rise.
  • In 2017 prices rose ~ 4% in the more popular price points with ideal locations. Projections for 2017 rest at 5% by the end of the year.  Houses priced <$400,000 for first-time buyers, and Millennials experience greater pricing fluctuations.
  • The >$600K market holds steady to diminishing slightly, depending on location and price.  Often when a >$600K property goes on the market, it’s competing with a >$700K that needs to sell quickly.
  • People in their home > 10 years think about making a change with a healthy economy.  Home equity built up and a more significant portion of payments applies to principle.  Increases in pricing motives people to make changes or even start a new business with the extra equity cash.
  • Minimal new construction adds additional value to the current inventory.
  • Foreclosures help to offset fewer listings.

Hunterdon County

Net-Net

Either as a seller or buyer, navigate this real estate market with me!

  • Low-interest rates
  • Pent-up demand
  • Active market with increasing prices in the more popular price points and locations
  • High consumer confidence

Call me at 908-238-0118 to discuss your situation, and I’ll put my expertise and access to big data to work for you.

Note:  Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. I took reasonable precautions presenting this information. Please consult with a professional sales agent and take no actions based on my opinions, gathered trends, and statistics.  I assume no liability.

 

Real Estate Market Update Report Somerset County NJ

Somerset County’s Real Estate Market Conditions | December of 2017

Somerset County’s Real Estate Market Conditions | December of 2017

Monthly Market Update Newsletter Banner

Get ahead of the real estate market economic and behavior drivers in Somerset County, New Jersey with Coldwell Banker Residential Broker sales associate, Joe Peters.

Somerset County New Jersey Real Estate Market Conditions (including):

  1. Branchburg
  2. Bridgewater
  3. Somerville
  4. Hillsborough 
  5. Warren
  6. Watchung

Based on the last full month’s contract sales, statistics show a supply of approximately four months. Normal market conditions average four to six months in Somerset County.  Units sold averaged 61 days on the market. 307 properties went “under contract” in November, down from 338 in the prior month. Newly listed properties in the same period totaled 252.

Somerset County Inventory Breakdown by Price | October:

New Listings Under Contract Active Listings Month’s Supply
Condos/Town Houses * 133 132 358 3
Over 55 Communities* 10 19 50 3
$000K to $199K 33 38 91 2
$200K to $299K 81 94 245 3
$300K to $399K 79 64 199 3
$400K to $499K 40 42 153 4
$500K to $599K 31 33 139 4
$600K to $699K 29 22 122 6
$700K to $799K 21 14 98 7
$800K to $899K 10 12 83 7
$900K to $999K 16 6 73 12
$1,000K and Up 49 13 260 20
Totals for October 389 338 1463 4
Average Price $579,975 $436,420 -24.8%  
Average Days on Market 61
* Included in $ breakdowns

Somerset County Sales Breakdown Overview:

  • 70 % of sales in houses < $500,000
  • 26 %of sales in houses > $500,000 and < $1,000,000
  • 04 % percent of total sales (or 13 in total) in houses >$1,000,000

Somerset County Inventory Breakdown by Municipality | October

Somerset County Sales Breakdown Detailed:

Active Listings Under Contract Month’s Supply
Bedminster Twp 72 17 4
Bernards Twp 151 31 5
Bernardsville 88 8 11
Bound Brook 20 6 3
Branchburg Twp 75 12 6
Bridgewater Twp 161 40 4
Far Hills Boro 14 0
Franklin Twp 202 80 3
Green Brook 34 7 5
Hillsborough 123 31 4
Manville Boro 37 6 6
Millstone Boro 2 0
Montgomery Twp 147 20 7
North Plainfield 71 25 3
Peapack Gladstone 30 3 10
Raritan Boro 12 8 2
Rocky Hill Boro 2 1 2
Somerville Boro 32 8 4
South Bound Brook 13 7 2
Warren Twp 125 19 7
Watchung Boro 52 9 6
Totals 1463 338 4

Two areas in Somerset County reported no sales in the past month:

  • Far Hills
  • Millstone

One area reported one or two sales each last month:

  • Rocky Hill

Hotspots:

  • Bernards – 24 sales
  • Bridgewater – 35 sales
  • Franklin – 65 sales
  • Hillsborough – 35 sales
  • Montgomery – 19 sales
  • N Plainfield – 18 sales

These hotspot areas equaled 64% of the sales last month. The average new listing coming on the market last month neared $545,660 The average price of a unit going “under contract” neared $432,561 (21% less).

Note: To get an accurate price point for your property, contact me. Coldwell Banker’s big data technology capabilities will put you at an advantage. Houses priced and marketed accurately sell fast, especially with a real estate industry veteran and local expert helping you navigate the process.

New Jersey’s Economic Drivers:

New Jersey Home Sales:

Home purchase demand increased by  9% in New Jersey during October giving the state its 6th consecutive month of increases. (These numbers run a month behind).  The same number were about 4% in 2016.

New Jersey experienced a compounded growth rate of 14% over the past two years. Sales increased by 5% YTD.

Activity concentrates in the <$400,000 market where Millennial buyers transition into home ownership. During the same period, all housing sales showed increases across all price points showing confidence in the new administration’s plans on taxes and deregulation.

At the same time, the number of homes offered for sale in New Jersey remained low and had recently decreased. The supply decreased by ~ 5,000 homes, compared to a year ago.  Currently, ~33,000 fewer (-46%) homes are on the market compared to the 2011 peak.

Current unsold inventory in New Jersey sits at just under 4.3 months vs. 5.2 months from a year ago.

Hunterdon County has ~10% less inventory, and Somerset County also has ~ 13% less inventory than a year ago.

The fear of increasing interest rates based on future increases, and the Fed’s slightly loosening lending standards affect the current market activity.

Interest Rates:

Interest rates at the end of October rose slightly to a level of just over 3.9% for a 30-year conventional mortgage. A fifteen-year conventional mortgage rests at just under the 3.3% range. Five and seven-year arms are at the 3.3% range as well.

Consumer fears of steadily rising rates and slowly rising home prices impact the current market. The Fed already instituted initial increases in rates and are talking about additional ones. Industry analysts forecast a 4.7% rate by the end of the year, 5% by the end of 2018, and 5.5% by the end of 2019. If the rate increases from 4% to 5%, buyers will lose 9% of their buying power.

Combine that with the steadily increasing prices and consumer confidence, and you have what is driving our current market activity

National Job Front:

US unemployment rate is 4.1%. This is the lowest it has been in over forty+ years ! And, it is a decline of over 70% from the peak which happened in 2009.

On the national level, we reached full recovery in May of 2014 with 2,700,000+ job gains in 2015. Revised figures show a gain of 2,242,000+ in 2016.  Expectations of 2,000,000 jobs in 2017 leave us at  -6% from 2016.

  • The national U-3 unemployment rate stands at 4.1%.
  • U-6 unemployment rate stands at 7.9%

Note: Due to full-time and part-time jobs counted equally by the BLS, numbers differ.  The US economy still needs to create an additional 2,600,000 jobs to reach the same employment rate that existed before the start of the 2007 to 2009 recession.

But, the momentum is building and the result is consumer confidence is the highest since 2004. Great news for the housing industry !

New Jersey Job Front:

NJ unemployment rate increased to 4.9%, bolstering consumer confidence remains high in NJ as well.

New Jersy job growth increased by 65,000+ in 2015, the best in 15 years. Projecting on those numbers, New Jersey’s recession losses would recover by 2017.  To date, we reached 96% of projected numbers. Finalized projected numbers showed 59,000 in 2016. Still good!  Although we still trail the nation, we’re on pace to add 25,000 jobs this year vs. 59,000 being added in 2016 (- 60%).

Thru October, 22,000 additional jobs were added YTD vs. 50,900 for the same period last year.

It should be noted that even though these numbers are disappointing, the levels of the jobs being added at is much higher than in the past several years (a silver lining?).

Rental Market Trends:

Tight Market!

Prior restrictive mortgage standards nudged Millennials to postpone home ownership until later in life than previously seen. These potential buyers live with parents or share rentals. We are starting to see them now re-enter the rental and first-time buyer markets. The average age of our first-time buyer changed from 29 to 37 years over the past five years.  Older Americans impacted by underfunded retirement plans due to the economic downturn rent houses too.

Rental prices in New Jersey rose ~ 10% annually, averaging over $1,300 per unit. Current vacancy rates in New Jersey rest at 3.5%, the lowest in the state and nation (which is at 4.5%).

The drop in New Jersey’s homeownership contributes to rental demand.  A 12+ year trend shows a decrease from  71% to 52%.  This 8% decrease compared to an 8% national decrease contributes to the slower recovery of home prices in the state.  One or two-person households with no children stands at 65%, reflected in our school population.

New Jersey Foreclosures:

New Jersey continues to face high foreclosure rate filings. Other states have begun to, or already have recovered. In tight real estate market, these foreclosures sell at a small discount.

Note:  Figures vary by local market, especially those walloped by Hurricane Sandy three years ago and rural and urban areas. We still rank #1 in the country at 4.0%, followed by NY, LA, MS, ME, FL, MD, PA, MD, RI and DE.  The national baseline number sits at ~ 1.7%.

2016 saw a 3% decrease over the prior year and added a ~ 71,100 filings, compared to 76,800 in 2015.  2017 YTD  foreclosure filings YTD have decreased sllightly with 2016 YTD.  Forecasts project 72,000+ or -3%, putting pressure home prices in concentrated areas.

 Real Estate Market Recap

  • Consumer confidence is high. This is mainly based on the job and stock market increases.
  • 80% of consumers perceive homeownership as part of the American Dream.
  • Millennials make up 24% of homeowners with room for expansion at the lower end of the market with adequate inventory supply.
  • Analysts five-year forecast indicates slow and steady price growth ay an annual 4%.
  • Central New Jersey’s trend for 2016 and early 2017 showed a surge in home sales, but not prices, clustered in < $500,000 market. In 2016, a 1% rise in prices tallied for New Jersey. As inventory builds, prices will rise.
  • In 2017 prices rose ~ 4% in the more popular price points with ideal locations. Projections for 2017 rest at 5% by the end of the year.  Houses priced <$400,000 for first-time buyers, and Millennials experience greater pricing fluctuations.
  • The >$600K market holds steady to diminishing slightly, depending on location and price.  Often when a >$600K property goes on the market, it’s competing with a >$700K that needs to sell quickly.
  • People in their home > 10 years think about making a change with a healthy economy.  Home equity built up and a more significant portion of payments applies to principle.  Increases in pricing motives people to make changes or even start a new business with the extra equity cash.
  • Minimal new construction adds additional value to the current inventory.
  • Foreclosures help to offset fewer listings.

Somerset County

Net-Net

Either as a seller or buyer, navigate this real estate market with me!

  • Low-interest rates
  • Pent-up demand
  • Active market with increasing prices in the more popular price points and locations
  • High consumer confidence

Call me at 908-238-0118 to discuss your situation, and I’ll put my expertise and access to big data to work for you.

Note:  Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. I took reasonable precautions presenting this information. Please consult with a professional sales agent and take no actions based on my opinions, gathered trends, and statistics.  I assume no liability.

Somerset County Market Update

Somerset County’s Real Estate Market Conditions – as of November of 2017

Somerset County’s Real Estate Market Conditions | November of 2017

Monthly Market Update Newsletter Banner

Get ahead of the real estate market economic and behavior drivers in Somerset County, New Jersey with Coldwell Banker Residential Broker sales associate, Joe Peters.

Somerset County New Jersey Real Estate Market Conditions (including):

  1. Branchburg
  2. Bridgewater
  3. Somerville
  4. Hillsborough 
  5. Warren
  6. Watchung

Based on the last full month’s contract sales, statistics show a supply of approximately four months. Normal market conditions average four to six months in Somerset County.  Units sold averaged 61 days on the market. 338 properties went “under contract” in October, down from 340 in the prior month. Newly listed properties in the same period totaled 389.

Somerset County Inventory Breakdown by Price | October:

New Listings Under Contract Active Listings Month’s Supply
Condos/Town Houses * 133 132 358 3
Over 55 Communities* 10 19 50 3
$000K to $199K 33 38 91 2
$200K to $299K 81 94 245 3
$300K to $399K 79 64 199 3
$400K to $499K 40 42 153 4
$500K to $599K 31 33 139 4
$600K to $699K 29 22 122 6
$700K to $799K 21 14 98 7
$800K to $899K 10 12 83 7
$900K to $999K 16 6 73 12
$1,000K and Up 49 13 260 20
Totals for October 389 338 1463 4
Average Price $579,975 $436,420 -24.8%  
Average Days on Market 61
* Included in $ breakdowns

Somerset County Sales Breakdown Overview:

  • 70 % of sales in houses < $500,000
  • 26 %of sales in houses > $500,000 and < $1,000,000
  • 04 % percent of total sales (or 13 in total) in houses >$1,000,000

Somerset County Inventory Breakdown by Municipality | October

Somerset County Sales Breakdown Detailed:

Active Listings Under Contract Month’s Supply
Bedminster Twp 72 17 4
Bernards Twp 151 31 5
Bernardsville 88 8 11
Bound Brook 20 6 3
Branchburg Twp 75 12 6
Bridgewater Twp 161 40 4
Far Hills Boro 14 0
Franklin Twp 202 80 3
Green Brook 34 7 5
Hillsborough 123 31 4
Manville Boro 37 6 6
Millstone Boro 2 0
Montgomery Twp 147 20 7
North Plainfield 71 25 3
Peapack Gladstone 30 3 10
Raritan Boro 12 8 2
Rocky Hill Boro 2 1 2
Somerville Boro 32 8 4
South Bound Brook 13 7 2
Warren Twp 125 19 7
Watchung Boro 52 9 6
Totals 1463 338 4

Two areas in Somerset County reported no sales in the past month:

  • Far Hills
  • Millstone

One area reported one or two sales each last month:

  • Rocky Hill

Hotspots:

  • Bernards – 21 sales
  • Bridgewater – 23 sales
  • Franklin – 25 sales
  • Hillsborough – 23 sales
  • Montgomery – 20 sales
  • N Plainfield – 25 sales

Hotspot areas equaled 40% of the sales last month. The average new listing coming on the market last month neared $579,975 The average price of a unit going “under contract” neared $436,420 (25% less).

Note: To get an accurate price point for your property, contact me. Coldwell Banker’s big data technology capabilities will put you at an advantage. Houses priced and marketed accurately sell fast, especially with a real estate industry veteran and local expert helping you navigate the process.

New Jersey’s Economic Drivers:

New Jersey Home Sales:

Home purchase demand increased by just under .5% in New Jersey during September giving the state its 5th consecutive month of increases. (These numbers run a month behind).  The same number were about 12% in 2016. But the number of new contracts in September were impressive.  The highest for that month since 2005.

New Jersey experienced a compounded growth rate of 22% over the past two years. Sales increased by 5% YTD.

Activity concentrates in the <$400,000 market where Millennial buyers transition into home ownership. During the same period, luxury housing sales showed an impressive increase affected by confidence in the new administration’s plans on taxes and deregulation.

At the same time, the number of homes offered for sale in New Jersey remained low and had recently decreased. The supply decreased by ~ 6,00 homes, compared to a year ago.  Currently, ~31,000 fewer (-42%) homes are on the market compared to the 2011 peak.

Current unsold inventory in New Jersey sits at just under 4.7 months vs. 5.4 months from a year ago.

Hunterdon County has ~9% less inventory, and Somerset County also has ~ 10% less inventory than a year ago.

The fear of increasing interest rates based on future increases, and the Fed’s slightly loosening lending standards affect the current market activity.

Interest Rates:

Interest rates at the end of October rose slightly to a level of just over 3.9% for a 30-year conventional mortgage. A fifteen-year conventional mortgage rests at just under the 3.25% range. Five and seven-year arms rest at the 3.2% range.

Consumer fears of steadily rising rates and slowly rising home prices impact the current market. The Fed already instituted initial increases in rates and are talking about additional ones. Industry analysts forecast a 4.7% rate by the end of the year, 5% by the end of 2018, and 5.5% by the end of 2019. If the rate increases from 4% to 5%, buyers will lose 9% of their buying power.

Combine that with the steadily increasing prices and consumer confidence, and you have what is driving our current market activity

National Job Front:

US unemployment rate is 4.2%. This is the lowest it has been in over forty years! And, it is a decline of over 70% from the peak which happened in 2009.

On the national level, we reached full recovery in May of 2014 with 2,700,000+ job gains in 2015. Revised figures show a gain of 2,242,000+ in 2016.  Expectations of 2,000,000 jobs in 2017 leave us at  -6% from 2016.

  • The national U-3 unemployment rate stands at 4.2%.
  • U-6 unemployment rate stands at 8.3%

Note: Due to full-time and part-time jobs counted equally by the BLS, numbers differ.  The US economy still needs to create an additional 2,600,000 jobs to reach the same employment rate that existed before the start of the 2007 to 2009 recession.

But, the momentum is building and the result is consumer confidence is the highest since 2004. Great news for the housing industry !

New Jersey Job Front:

NJ unemployment rate increased to 4.7%, bolstering consumer confidence remains high in NJ as well.

New Jersey job growth increased by 65,000+ in 2015, the best in 15 years. Projecting on those numbers, New Jersey’s recession losses would recover by 2017. To date, we reached 96% of projected numbers. Finalized projected numbers showed 59,000 in 2016. Still good!  Although we still trail the nation, we’re on pace to add 24,000 jobs this year vs. 59,000 being added in 2016 (- 60%).

Thru September, 20,500 additional jobs were added YTD vs. 50,900 for the same period last year.

It should be noted that even though these numbers are disappointing, the levels of the jobs being added at is much higher than in the past several years (a silver lining?).

Rental Market Trends:

Tight Market!

Prior restrictive mortgage standards nudged Millennials to postpone home ownership until later in life than previously seen. These potential buyers live with parents or share rentals. We are starting to see them now re-enter the rental and first-time buyer markets. The average age of our first-time buyer changed from 29 to 37 years over the past five years.  Older Americans impacted by underfunded retirement plans due to the economic downturn rent houses too.

Rental prices in New Jersey rose ~ 10% annually, averaging over $1,300 per unit. Current vacancy rates in New Jersey rest at 3.5%, the lowest in the state and nation.

The drop in New Jersey’s homeownership contributes to rental demand. A 12+ year trend shows a decrease from  71% to 62%. This 13% decrease compared to an 8% national decrease contributes to the slower recovery of home prices in the state. One or two-person households with no children stands at 65%, reflected in our school population.

New Jersey Foreclosures:

New Jersey continues to face high foreclosure rate filings. Other states have begun to, or already have recovered. In tight real estate market, these foreclosures sell at a small discount.

Note:  Figures vary by local market, especially those walloped by Hurricane Sandy three years ago and rural and urban areas. We still rank #1 in the country at 4.1%, followed by NY, LA, MS, ME, FL, MD, PA, MD, RI and DE.  The national baseline number sits at ~ 1.7%.

2016 saw a 3% decrease over the prior year and added a ~ 71,100 filings, compared to 76,800 in 2015.  2017 YTD  foreclosure filings YTD hold par with 2016 YTD.  Forecasts project 72,000 or -3%, putting pressure home prices in concentrated areas.

 Real Estate Market Recap

  • Consumer confidence is high.
  • 80% of consumers perceive homeownership as part of the American Dream.
  • Millennials make up 24% of homeowners with room for expansion at the lower end of the market with adequate inventory supply.
  • Analysts five-year forecast indicates slow and steady price growth ay an annual 4%.
  • Central New Jersey’s trend for 2016 and early 2017 showed a surge in home sales, but not prices, clustered in < $500,000 market. In 2016, a 1% rise in prices tallied for New Jersey. As inventory builds, prices will rise.
  • In 2017 prices rose ~ 4% in the more popular price points with ideal locations. Projections for 2017 rest at 5% by the end of the year.  Houses priced <$400,000 for first-time buyers, and Millennials experience greater pricing fluctuations.
  • The >$600K market holds steady to diminishing slightly, depending on location and price. Often when a >$600K property goes on the market, it’s competing with a >$700K that needs to sell quickly.
  • People in their home > 10 years think about making a change with a healthy economy.  Home equity built up and a more significant portion of payments applies to principle. Increases in pricing motives people to make changes or even start a new business with the extra equity cash.
  • Minimal new construction adds additional value to the current inventory.
  • Foreclosures help to offset fewer listings.

Somerset County

Net-Net

Either a seller or buyer, navigate the real estate market with me!

  • Low-interest rates
  • Pent-up demand
  • Active market with increasing prices in the more popular price points.

Call me at 908-238-0118 to discuss your situation, and I’ll put my expertise and access to big data to work for you.

Note:  Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. I took reasonable precautions presenting this information. Please consult with a professional sales agent and take no actions based on my opinions, gathered trends, and statistics. I assume no liability.

 

Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage

Joe Peters logo

Request a monthly copy of this newsletter to be sent to you. 

 

Hunterdon County Real Estate Market Update

Hunterdon County’s Real Estate Market Conditions – as of November of 2017

Hunterdon County’s Real Estate Market Conditions | November of 2017

Monthly Market Update Newsletter Banner

Get ahead of the real estate market economic and behavior drivers in Hunterdon County, New Jersey with Coldwell Banker Residential Broker sales associate, Joe Peters.

Hunterdon County New Jersey Real Estate Market Conditions (including):

  1. Clinton Township
  2. Flemington
  3. Raritan Township
  4. Readington Township
  5. Clinton

Based on the last full month’s contract sales, statistics show a supply of approximately five months. Normal market conditions average four to six months in Hunterdon County.  Units sold averaged 78 days on the market. 162 properties went “under contract” in October, up from 150 in the prior month. Newly listed properties in the same period totaled 220.

Hunterdon County Inventory Breakdown by Price | October:

New Listings Under Contract Active Listings Month’s Supply
Condos/Town Houses * 42 52 142 3
Over 55 Communities * 9 4 19 5
$000K to $199K 31 38 117 3
$200K to $299K 42 40 130 3
$300K to $399K 49 29 141 5
$400K to $499K 23 23 109 5
$500K to $599K 34 10 115 12
$600K to $699K 15 13 91 7
$700K to $799K 11 4 49 12
$800K to $899K 1 2 21 11
$900K to $999K 2 1 21 21
$1,000K and Up 12 2 65 33
Totals for October 220 162 859 5
Average Price $457,394 $359,266 -21.5%
Average DOM   78
* Included in $ breakdowns

Hunterdon County Sales Breakdown Overview:

  • 80 % of sales in houses < $500,000
  • 20 %of sales in houses > $500,000
  • 6% percent of total sales (or 9 in total) in houses >$700,000

 

Hunterdon County Inventory Breakdown by Municipality | October

  Active Listings Under Contract Month’s Supply
Alexandria Twp. 30 6 5
Bethlehem Twp. 20 6 3
Bloomsbury Boro. 8 2 4
Califon Boro. 7 2 4
Clinton Town 19 4 5
Clinton Twp. 78 19 4
Delaware Twp. 37 6 6
East Amwell Twp. 36 2 18
Flemington Boro. 18 4 5
Franklin Twp. 30 1 30
Frenchtown Boro. 29 2 15
Glen Gardner Boro. 16 6 3
Hampton Boro 15 0
High Bridge Boro. 25 4 6
Holland twp. 21 7 3
Kingwood Twp. 28 7 4
Lambertville City 21 7 3
Lebanon Boro. 6 2 3
Lebanon Twp. 44 9 5
Milford Boro. 8 2 4
RaritanTwp. 136 25 5
Readington Twp. 91 23 4
Stockton Boro. 2 1 2
Tewksbury Twp. 82 7 12
Union Twp. 39 7 6
West Amwell Twp. 13 1 13
Totals 859 162 5

Hunterdon County Sales Breakdown Detailed:

One area in Hunterdon County reported no sales in the past month:

  • Hampton

Nine areas reported one or two sales each last month:

  • Bloomsbury
  • Califon
  • E. Amwell
  • Franklin
  • Frenchtown
  • Lebanon Boro
  • Milford
  • Stockton
  • W. Amwell

Hotspots:

  • Clinton/Clinton Township – 23 sales
  • Raritan Township – 25 sales
  • Readington Township – 23 sales

Hotspot areas equaled 41% of the sales last month. The average new listing coming on the market last month neared $457,394. The average price of a unit going “under contract” neared $358,266 (22% less).

Note: To get an accurate price point for your property, contact me. Coldwell Banker’s big data technology capabilities will put you at an advantage. Houses priced and marketed accurately sell fast, especially with a real estate industry veteran and local expert helping you navigate the process.

 

New Jersey’s Economic Drivers:

New Jersey Home Sales:

Home purchase demand increased by just under .5% in New Jersey during September giving the state its 5th consecutive month of increases. (These numbers run a month behind).  The same number were about 12% in 2016. But the number of new contracts in September were impressive.  The highest for that month since 2005.

New Jersey experienced a compounded growth rate of 22% over the past two years. Sales increased by 5% YTD.

Activity concentrates in the <$400,000 market where Millennial buyers transition into home ownership. During the same period, luxury housing sales showed an impressive increase affected by confidence in the new administration’s plans on taxes and deregulation.

At the same time, the number of homes offered for sale in New Jersey remained low and had recently decreased. The supply decreased by ~ 6,00 homes, compared to a year ago.  Currently, ~31,000 fewer (-42%) homes are on the market compared to the 2011 peak.

Current unsold inventory in New Jersey sits at just under 4.7 months vs. 5.4 months from a year ago.

Hunterdon County has ~9% less inventory, and Somerset County also has ~ 10% less inventory than a year ago.

The fear of increasing interest rates based on future increases, and the Fed’s slightly loosening lending standards affect the current market activity.

Interest Rates:

Interest rates at the end of October rose slightly to a level of just over 3.9% for a 30-year conventional mortgage. A fifteen-year conventional mortgage rests at just under the 3.25% range. Five and seven-year arms rest at the 3.2% range.

Consumer fears of steadily rising rates and slowly rising home prices impact the current market. The Fed already instituted initial increases in rates and are talking about additional ones. Industry analysts forecast a 4.7% rate by the end of the year, 5% by the end of 2018, and 5.5% by the end of 2019. If the rate increases from 4% to 5%, buyers will lose 9% of their buying power.

Combine that with the steadily increasing prices and consumer confidence, and you have what is driving our current market activity

National Job Front:

US unemployment rate is 4.2%. This is the lowest it has been in over forty years! And, it is a decline of over 70% from the peak which happened in 2009.

On the national level, we reached full recovery in May of 2014 with 2,700,000+ job gains in 2015. Revised figures show a gain of 2,242,000+ in 2016.  Expectations of 2,000,000 jobs in 2017 leave us at  -6% from 2016.

  • The national U-3 unemployment rate stands at 4.2%.
  • U-6 unemployment rate stands at 8.3%

Note: Due to full-time and part-time jobs counted equally by the BLS, numbers differ.  The US economy still needs to create an additional 2,600,000 jobs to reach the same employment rate that existed before the start of the 2007 to 2009 recession.

But, the momentum is building and the result is consumer confidence is the highest since 2004. Great news for the housing industry !

New Jersey Job Front:

NJ unemployment rate increased to 4.7%, bolstering consumer confidence remains high in NJ as well.

New Jersy job growth increased by 65,000+ in 2015, the best in 15 years. Projecting on those numbers, New Jersey’s recession losses would recover by 2017.  To date, we reached 96% of projected numbers. Finalized projected numbers showed 59,000 in 2016. Still good!  Although we still trail the nation, we’re on pace to add 24,000 jobs this year vs. 59,000 being added in 2016 (- 60%).

Thru September, 20,500 additional jobs were added YTD vs. 50,900 for the same period last year.

It should be noted that even though these numbers are disappointing, the levels of the jobs being added is much higher than in the past several years. Perhaps this is a silver lining?

Rental Market Trends:

Tight Market!

Prior restrictive mortgage standards nudged Millennials to postpone home ownership until later in life than previously seen. These potential buyers live with parents or share rentals. We are starting to see them now re-enter the rental and first-time buyer markets. The average age of our first-time buyer changed from 29 to 37 years over the past five years.  Older Americans impacted by underfunded retirement plans due to the economic downturn rent houses too.

Rental prices in New Jersey rose ~ 10% annually, averaging over $1,300 per unit. Current vacancy rates in New Jersey rest at 3.5%, the lowest in the state and nation.

The drop in New Jersey’s homeownership contributes to rental demand.  A 12+ year trend shows a decrease from  71% to 62%.  This 13% decrease compared to an 8% national decrease contributes to the slower recovery of home prices in the state.  One or two-person households with no children stands at 65%, reflected in our school population.

New Jersey Foreclosures:

New Jersey continues to face high foreclosure rate filings. Other states have begun to, or already have recovered. In tight real estate market, these foreclosures sell at a small discount.

Note:  Figures vary by local market, especially those walloped by Hurricane Sandy three years ago and rural and urban areas. We still rank #1 in the country at 4.1%, followed by NY, LA, MS, ME, FL, MD, PA, MD, RI and DE.  The national baseline number sits at ~ 1.7%.

2016 saw a 3% decrease over the prior year and added a ~ 71,100 filings, compared to 76,800 in 2015.  2017 YTD  foreclosure filings YTD hold par with 2016 YTD.  Forecasts project 72,000 or -3%, putting pressure home prices in concentrated areas.

 Real Estate Market Recap

  • Consumer confidence is high.
  • 80% of consumers perceive homeownership as part of the American Dream.
  • Millennials make up 24% of homeowners with room for expansion at the lower end of the market with adequate inventory supply.
  • Analysts five-year forecast indicates slow and steady price growth ay an annual 4%.
  • Central New Jersey’s trend for 2016 and early 2017 showed a surge in home sales, but not prices, clustered in < $500,000 market. In 2016, a 1% rise in prices tallied for New Jersey. As inventory builds, prices will rise.
  • In 2017 prices rose ~ 4% in the more popular price points with ideal locations. Projections for 2017 rest at 5% by the end of the year.  Houses priced <$400,000 for first-time buyers, and Millennials experience greater pricing fluctuations.
  • The >$600K market holds steady to diminishing slightly, depending on location and price. Often when a >$600K property goes on the market, it’s competing with a >$700K that needs to sell quickly.
  • People in their home > 10 years think about making a change with a healthy economy.  Home equity built up and a more significant portion of payments applies to principle. Increases in pricing motives people to make changes or even start a new business with the extra equity cash.
  • Minimal new construction adds additional value to the current inventory.
  • Foreclosures help to offset fewer listings.

Hunterdon County

Net-Net

Either a seller or buyer, navigate the real estate market with me!

  • Low-interest rates
  • Pent-up demand
  • Active market with increasing prices in the more popular price points.

Call me at 908-238-0118 to discuss your situation, and I’ll put my expertise and access to big data to work for you.

Note:  Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. I took reasonable precautions presenting this information. Please consult with a professional sales agent and take no actions based on my opinions, gathered trends, and statistics.  I assume no liability.

 

Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage

Joe Peters logo

Request a monthly copy of this newsletter to be sent to you.