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Hunterdon County’s Real Estate Market Conditions October 2019

Residential Real Estate

Hunterdon County's Real Estate Market Conditions January 2019

Hunterdon County’s Real Estate Market Conditions October 2019

Get ahead of the residential real estate market drivers in Hunterdon County, New Jersey with Coldwell Banker Residential Broker sales associate, Joe Peters. Joe’s monthly report walks people through the economic conditions and trends that influence our local markets.  You will come away knowing what is happening and more importantly, why it is happening. As a result, you will be better informed to make home buying and selling decisions.

What is happening

Based on the last full month’s contract sales, statistics show a supply of approximately six months. Normal market conditions average four to six months in Hunterdon County.  Units going under contract averaged 79 days on the market. 145 properties went “under contract” in Seotember, down from 202 in the prior month. Newly listed properties in the same period totaled 254.

Hunterdon County Inventory Breakdown By Price For Last Month:

September September Total  
Hunterdon County New Under Active Months’
Listings Contract Listings Supply
Condos/Town Houses *
50
38 242 6
Over 55 Communities * 7 6 20 3
$000K to $199K 14 32 64 2
$200K to $299K 32 34 111 3
$300K to $399K 48 31 142 5
$400K to $499K 49 26 156 6
$500K to $599K 43 11 171 16
$600K to $699K 25 4 85 21
$700K to $799K 17 4 63 16
$800K to $899K 10 1 34 34
$900K to $999K 5 0 23
$1,000K and Up 11 2 64 32
Totals for September 254 145 913 6
Average Price $538,872 $349,359 -35.2%
Average DOM   79
* Included in $ breakdowns
  • 85% of sales in houses < $500,000
  • 15% of sales in houses > $500,000
  • 05% percent of total sales (or 7 in total) in houses >$700,000

Hunterdon County Inventory Breakdown By Municipality For Last Month:

  Active Listings Under Contract Month’s Supply
Alexandria Twp. 56 1 56
Bethlehem Twp. 37 4 9
Bloomsbury Boro. 5 4 1
Califon Boro. 8 2 4
Clinton Town 13 2 7
Clinton Twp. 74 12 6
Delaware Twp. 38 5 8
East Amwell Twp. 23 3 8
Flemington Boro. 15 3 5
Franklin Twp. 30 2 15
Frenchtown Boro. 13 4 3
Glen Gardner Boro. 17 6 3
Hampton Boro 7 2 4
High Bridge Boro. 21 12
Holland twp. 31 4 8
Kingwood Twp. 28 1 28
Lambertville City 33 2 17
Lebanon Boro. 5 2 3
Lebanon Twp. 48 3 16
Milford Boro. 9 3 3
RaritanTwp. 135 29 5
Readington Twp. 95 15 6
Stockton Boro. 7 1 7
Tewksbury Twp. 104 8 13
Union Twp. 45 15 3
West Amwell Twp. 16 0
Totals 913 145 6

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

  • High Bridge
  • W Amwell

Eleven areas reported 1 or 2 sales each last month:

  • Alexandria Twp.
  • Califon
  • Clinton (town)
  • E. Amwell
  • Franklin
  • Hampton
  • Kingwood
  • Lambertville
  • Lebanon Boro.
  • Milford
  • Stockton

Hotspots:

  • Clinton/Clinton Township – 14 sales
  • Raritan Township – 29 sales
  • Readington Township – 15 sales

Hotspot areas equaled 40% of the sales last month. The average new listing coming on the market last month neared $538,872. The average price of a unit going “under contract” neared $349,359 (35% less).

Note: To get an accurate price point for your property based on its location and price point, contact me. Coldwell Banker’s big data technology capabilities will put you at a unique advantage. I can show you the latest age and earnings breakdown for your particular area, show you where people are moving into that area from and how I can market to those specific areas and demographics directly. The result is in you receiving the maximum selling price with a shorter time on the market.  Houses priced and marketed accurately sell faster, especially with a real estate industry veteran and local expert, helping you navigate the process.

 

Why it is happening

New Jersey’s Economic Drivers:

New Jersey Home Sales:

The still low inventory numbers lead to a bit of softening in the price appreciation on existing homes and a slowdown in growth. It is turning the tide back to a buyers market (or at least neutralize it to being a normal market).

We saw an increase of 6% in sales in August and year to date; we are ahead of 2018 by 3%.  And, this is not state-wide.  Only 12 of the 21 counties have benefited with an increase in sales.

Increases in inventory have occurred in all price points above $400,000 with the $400,000 to $600,000 range seeing the largest jump (+9%) followed by the $600,000+ with a slight increase.

The under $400,000 range saw a 9% drop n inventory.

Activity still concentrates in the under $400,000 market where Millennial buyers are transitioning into homeownership.  But, this price point only saw only a slight increase vs. 2018 YTD due to lack of inventory.  The $400 to $600K range also saw a nearly 900 increase in units sold YTD while dropping 22z% in inventory levels.

During the same period, all housing sales above $400,000 and below $1 million showed very modest increases showing confidence in the changes made on taxes and deregulation. There has also been an improvement at the very high-end in towns where rail service to Manhattan is available.  Houses above $1 million showed a small increase as well.

At the same time, the number of homes offered for sale in New Jersey remained low. Currently, ~31,000 fewer homes (-45%) are on the market compared to the 2011 peak.

Current unsold inventory in New Jersey varies widely by county with only 3.0 months in some and none being above 8.0.  The state is averaging just under four months.

We still have an acute shortage of inventory in both Hunterdon and Somerset County in our more popular price points and locations.

Hunterdon and Somerset County have about 2% & 8% less inventory than we had a year ago, respectively, and the inventory is 2% more in Hunterdon & 11% less in Somerset as compared to 2 years ago.

The market has changed from a seller’s to a buyer’s market above $500K due to the additional inventory coming on to the market.

Also, we are now seeing some millennials coming back into our local markets and buying homes (good news).

 

Interest Rates:

Interest rates have risen slightly over the last month.

The economy is strengthening, and Interest rates have fallen in recent weeks to just over 3.65% for a 30-year conventional mortgage. A fifteen-year conventional mortgage rests at just over the 3.15%  mark. Five-year arms are just under the 3.38% range.

Consumer fears of further rises in interest rates and slowly rising home prices are driving the current market demand. The Fed has made several downward adjustments and more may still be in order.

The fear of increasing interest rates, coupled with steadily increases in prices, is still driving the current market activity.

 

National Job Front:

On the national level, the US added over 2,700,000+ jobs in 2018.

US unemployment rate in August came in with 130,000 jobs added.  And unemployment remained at 3.7%.

As of the end of August, the US had added a little over 1.3 million jobs vs. around 1.9 million the prior year.

At this rate, they are predicting 1.6 million jobs will be added by year-end.

At the end of August, there were 7.2+ million openings compared to nearly 6.1 million unemployed persons.

 

New Jersey Job Front:

NJ added 39,000+ jobs in 2018 as compared to 47,100 for the same period in 2017.

The NJ unemployment rate fell to 3.2% (the lowest it has been on over ten years), bolstering consumer confidence in NJ as well.  In effect, NJ is rising with the national tide of nearly full employment.   Based on the first eight month’s results, 2019 the state has added 21,000+ jobs in 2019 vs. only 14,000+ for the same period in the prior year.

The level of jobs created has been at consistently higher levels than in the past several years (a silver lining as these additions to our job market will be able to afford to buy houses eventually).

It also should be noted that these jobs are mostly in the northern half of the state.

 

Rental Market Trends:

We have seen an 11 year high in rental availability,

Rental prices in New Jersey rose nearly 5% in 2018, averaging just over $1,600 per unit. Current vacancy rates in New Jersey have fallen to 2.7% in central NJ.

The drop in New Jersey’s homeownership contributes to rental demand.  A 12+ year trend shows a decrease from  71% to 66%.  This 7% decrease compared to an 8% national decrease contributes to the slower recovery of home prices in the state and adds over 20,000+ additional renters in our state. However, the 71% level resulted from the loose lending standards of the early 2000s and is actually at a good level.  Households with no children stand at 65%, reflecting the decline in our school population.

One article states that the average homeowner who is 65+ has an average net wealth of over $318K, while the same for a renter is only just under $8K.  It also offers a stable place to live, an evident hedge against inflation, and a way to build wealth (a strong argument for homeownership).

However, the number of renters has increased by 7% over the past 25 years, with the less educated leading the way.  And, we are now seeing more educated millennials moving east into higher rent and cost of living areas that eat into their discretionary income (including savings).  It makes one wonder where this all is heading.

The pace of new rental construction has increased to meet this demand and now seems to have caught up.

 

New Jersey Foreclosures:

New Jersey continues to face falling foreclosure rate filings dropped to  2.1%. Other states have begun to, or already have recovered. In a tight real estate market, these foreclosures sell at a small discount.

Note: Figures vary by the local market, especially those walloped by Hurricane Sandy three years ago and rural and urban areas. We rank #5 in the country with 2.1%, led by NY with 2.8%, MS with 2.6% (mostly hurricane-related)  LA with 2.4%, ME with 2.1% and trailed by FL, DE, MD, PA, and AL.  The national baseline number sits at a little under 1.3%.

Foreclosures in NJ in 2018 were the lowest in the state in over four years.  And, 2019 looks to be even better with a forecast of under 41,700 foreclosure filings.

 

Real Estate Market Recap

Economic conditions:

  • Nationally, 2018 was the eighth straight year of 2 million + job gains.
  • We are now in our longest economic expansion period in America’s history with 100+ months of positive job gains.
  • The GDP is still rising (although its rate of increase seems to be slowing).
  • At 3.3% unemployment, NJ is now near to the national average, which is currently at 3.5% & leading economic indicators in NJ are now surpassing the nation by almost two-fold.
  • The best paying and most attractive jobs are in NYC, pulling many of our millennials in that direction (although this trend is diminishing).
  • And, wages are up 3.2% at the same time.
  • Interest rates have dropped to surprising lows of under 3.65% since the first of the year.
  • And, house prices have risen around 3+% in the more popular housing price points and areas further exasperating the situation (although this appreciation now appears to be slowing).
  • Baby boomers who were choosing to “stay put’ and update rather than “move up” to their dream house as it is no longer considered a sound investment (and a lot of times inventory is not available) which is causing most of the housing shortage are now finding available inventory.  This situation has loosened up as many new listings have come on the market over the past few months.
  • And there is still little entry-level construction going on in our area, just larger homes and new rentals (only 50% of what it was in 2005).
  • As a result of the previous two points, we are experiencing the current housing inventory shortage (the shelves are empty in our starter housing price points).
  • And, some empty houses are starting to appear at out higher price points.
  • Foreclosures rates continue to decline (or normalize).
  • There is continued confidence that the new tax and jobs act will further stimulate the economy with more jobs as the economy remains robust.

Changes in lifestyle:

  • The average age at marriage is now in the mid to late ’30s (up seven years from just a decade ago).
  • Families usually have only one to two children due to costs and the ability to choose.
  • 70% of all NJ homes have no children of school age, and 50% do not have more than one person in them. This factor minimizes the need for larger housing not only in NJ but everywhere.
  • As a result of job opportunities, buyers are gravitating to areas within 15 miles of NYC with good mass transportation systems.
  • 80% of consumers still perceive homeownership as part of the American Dream.  It is just what they want to buy (or rent) that has changed.
  • Builders have been thinking larger 4 BR center hall colonials on 1+ acre in the country (based mostly on local building codes).
  • Buyers are thinking of smaller luxury hi-rise close to mass transportation and work in the east (truly a mismatch).
  • 60% of all new housing starts in 2018 in NJ were in the rental sector.

Market conditions:

  • We experienced a sales slump in late 2018 due to interest rate hikes. But the first half of 2019 made up for it by being the best we have seen, and the 2nd half is also promising.
  • It appears that we are now entering the next phase of the housing cycle, which is still active, just less robust in price appreciation.  Sort of a cool down from 2018. Or, maybe back to normal.
  • And, we see some warnings of an economic slowdown starting in late 2020 and beyond.
  • However, these warnings are not holding back sales activity.  We may see fewer sales and less price appreciation as a result.
  • The effect on housing is seen to be limited to curtailing the growth of price appreciation and not in any loss in value.
  • But, in general, homeowners are sitting with more equity than ever (NJ reports 95+% with positive equity) and are no longer using their homes as an ATM.  So, the effect of any slowdown on housing should be minimal (if at all).
  • Consumer confidence remains high nation-wide based on the job and stock market increases.
  • Most consumers still see homeownership as a sound investment.
  • There is a bit of offset to this encouraging news from the discord that we see in our national politics and trade policies.
  • This confidence is reflected in buyer traffic being up at open houses.  However, with a lack of inventory in our lower price points, there are fewer houses for sale.
  • Affordability will never be in this good of shape as interest and price increases start to eat into what you can afford.
  • Millennials make up about 35% of our current homeowners with much more room for expansion at the lower end of the market when adequate inventory supply materializes.
  • Central New Jersey’s trend in early 2019 shows an increase in home sales, but price increases only in houses clustered in < $400,000 market where the first-time buyers and Millennials are focused.
  • The >$400K market holds diminishing slightly due to a lack of inventory.  We have additional new inventory in the $400K to $600K range.
  • Minimal new construction, lack of entry-level new housing, and COAH restrictions add additional value to the current inventory.
  • Analysts five-year forecast indicates slow but steady price growth (but at reduced rates) at an annual average of 2 to 4% (depending on location and price point).  This price growth will remain higher in the under $400K market. And, little depreciation in pricing is being forecasted except in the higher-end inventory.
  • There is an acute shortage of inventory in both Hunterdon and Somerset County in our more popular price points and locations holding back even more sales.  In general, we have only about 65% of the inventory that we had in 2011 but are selling current inventory at faster rates.
  • It is simple; we could sell more houses if we had more inventory on hand,  And, as we have started to see small inventory increases over the past six months, 2019 can be a boom for resales.
  • In 2018 prices rose ~ averaging just over 3.5% and depending on price points and locations.  2019 promises to be more normalized with at least 3% growth in prices.  But it depends on your price point and location. The following two years will also see less in % but should still show modest positive growth.
  • Mortgage delinquency is normalizing.

 

Forecast:

  • The economy will continue to prosper with no recession currently in sight for the next 18  months.  And, there most likely will be only a slowdown impact on the rate of price appreciation if this happens.
  • Prime Interest rates will probably drop further in 2019.  And, we have just seen a slight drop and are anticipating another.
  • Home prices will rise by an average of another 3% during that same period (this will depend on your price point and location) further decreasing buying power. And, the most bullish projections show at least a 7% increase over the next few years.
  • While improving, supply will remain tight in the more popular price points in the residential real estate.
  • Many new jobs seem to be resulting from the Tax and Jobs act (just look at the help wanted signs).
  • For the first time in memory, the US is reporting 7.2+million open jobs and only 6. million unemployed.  We are at full employment if you consider that 3% of unemployed is the normal level.
  • We now need to match the skills of the unemployed to the job openings to prosper further as many four-year degrees currently being obtained, are not useful in the current job market. It has also opened up the need for inward migration of workers to our the economy.  In some areas, this is happening via people immigrating from outside of the US to areas with the skills needed to fill open positions.
  • The affordability index shows that there is room for much more sales; all we need an increase in inventory.  The most affordable time to buy appears to be now!.
  • Some high-end fall-out has resulted in the residential real estate from the SALT and mortgage interest changes in the Tax and Jobs act.
  • The commercial real estate market is flourishing as a result of creating more buying demand.
  • People in their home > 10 years have very positive home equity built up, and a more significant portion of payments applies to principle.  Increases in selling prices should eventually motivate people to make changes in their lifestyle by investing in summer homes or even start a new business with the extra equity cash.
  • And, thirty-seven percent of all homes in the US have no mortgage at all.
  • Small investor activity in the market is up.  In many cases, these are flippers buying-low end unsaleable inventory and bringing it up to marketable status.

Note:  Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. I took reasonable precautions in 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.

 

You can ask me a question or request a monthly copy of this newsletter here.

 

 

 

 

 

Hunterdon County’s Real Estate Market Conditions August 2019

Residential Real Estate

Hunterdon County's Real Estate Market Conditions January 2019

Hunterdon County’s Real Estate Market Conditions August 2019

Get ahead of the residential real estate market drivers in Hunterdon County, New Jersey with Coldwell Banker Residential Broker sales associate, Joe Peters. Joe’s monthly report walks people through the economic conditions and trends that influence our local markets.  You will come away knowing what is happening and more importantly, why it is happening. As a result, you will be better informed to make home buying and selling decisions.

What is happening

Based on the last full month’s contract sales, statistics show a supply of approximately six months. Normal market conditions average four to six months in Hunterdon County.  Units going under contract averaged 66 days on the market. 160 properties went “under contract” in July, down from 184 in the prior month. Newly listed properties in the same period totaled 214.

Hunterdon County Inventory Breakdown By Price For Last Month:

Month’s
New Listings Under Contract Active Listings Supply
Condos/Town Houses * 48 38 145 4
Over 55 Communities * 4 4 30 8
$000K to $199K 23 19 83 4
$200K to $299K 31 35 116 3
$300K to $399K 36 28 152 5
$400K to $499K 35 30 143 5
$500K to $599K 40 26 188 7
$600K to $699K 21 11 92 8
$700K to $799K 10 5 65 13
$800K to $899K 11 2 38 19
$900K to $999K 1 1 27 27
$1,000K and Up 6 3 64 21
Totals for July 214 160 968 6
Average Price $484,772 $425,092 -12.3%
Average DOM   66
* Included in $ breakdowns
  • 70% of sales in houses < $500,000
  • 30% of sales in houses > $500,000
  • 07% percent of total sales (or 11 in total) in houses >$700,000

Hunterdon County Inventory Breakdown By Municipality For Last Month:

  Active Listings Under Contract Month’s Supply
Alexandria Twp. 58 6 10
Bethlehem Twp. 32 2 16
Bloomsbury Boro. 9 2 5
Califon Boro. 11 1 11
Clinton Town 12 4 3
Clinton Twp. 84 18 5
Delaware Twp. 39 3 13
East Amwell Twp. 21 2 11
Flemington Boro. 14 4 4
Franklin Twp. 33 6 6
Frenchtown Boro. 17 0
Glen Gardner Boro. 18 4 5
Hampton Boro 7 1 7
High Bridge Boro. 32 7 5
Holland twp. 35 1 35
Kingwood Twp. 24 6 4
Lambertville City 30 4 8
Lebanon Boro. 7 4 2
Lebanon Twp. 49 2 25
Milford Boro. 10 1 10
RaritanTwp. 148 31 5
Readington Twp. 106 24 4
Stockton Boro. 6 0
Tewksbury Twp. 106 9 12
Union Twp. 49 14 4
West Amwell Twp. 11 4 3
Totals 968 160 6

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

  • Flemington Boro.
  • Stockton

Eight areas reported 1 or 2 sales each last month:

  • Bethlehem Twp.
  • Bloomsbury
  • Califon
  • E. Amwell
  • Glen Gardner
  • Holland
  • Lebanon Boro.
  • Milford

Hotspots:

  • Clinton/Clinton Township – 22 sales
  • Raritan Township – 31 sales
  • Readington Township – 24 sales

Hotspot areas equaled 48

% of the sales last month. The average new listing coming on the market last month neared $484,772. The average price of a unit going “under contract” neared $425,092 (12% less).

Note: To get an accurate price point for your property based on its location and price point, contact me. Coldwell Banker’s big data technology capabilities will put you at a unique advantage. I can show you the latest age and earnings breakdown for your particular area, show you where people are moving into that area from and how I can market to those specific areas and demographics directly. The result is in you receiving the maximum selling price with a shorter time on the market.  Houses priced and marketed accurately sell faster, especially with a real estate industry veteran and local expert, helping you navigate the process.

 

Why it is happening

New Jersey’s Economic Drivers:

New Jersey Home Sales:

For the first time in three years, we have seen an improvement in the inventory situation over the past seven months (but is still far below what is needed).  Let’s hope that it is the beginning of a trend.

The still low inventory numbers lead to a bit of softening in the price appreciation on existing homes and a slowdown in growth. It is turning the tide back to a buyers market (or at least neutralize it to being a normal market).

After an increase in sales for the past three months, we saw a decrease of 2% in June. . Year to date we are slightly ahead of 2018.  And, this is not state-wide.  Only 12 of the 21 counties have benefited with an increase in sales.

Increases in inventory have occurred in all price points above $400,000 with the $400,000 to $600,000 range seeing the largest jump (+12%) followed by the $600,000+ with a 3% increase.

The under $400,000 range saw a 6% drop n inventory.

Activity still concentrates in the under $400,000 market where Millennial buyers are transitioning into homeownership.  But, this price point only saw a slight increase vs. 2018 YTD due to lack of inventory.  The $400 to $600K range also saw a 13% increase YTD due to additional inventory coming on the market in that price range.

During the same period, all housing sales above $600,000 and below $1 million showed very modest increases showing confidence in the changes made on taxes and deregulation. There has also been an improvement at the very high-end in towns where rail service to Manhattan is available.  Houses above $1 million showed a small increase as well.

At the same time, the number of homes offered for sale in New Jersey remained low (but rose by 7% last month). Currently, ~30,000 fewer homes (-41%) are on the market compared to the 2011 peak.

Current unsold inventory in New Jersey varies widely by county with only 2.8 months in some and none being above 8.0.  The state is averaging 3.8 months.

We still have an acute shortage of inventory in both Hunterdon and Somerset county in our more popular price points and locations.

Hunterdon and Somerset County have about 2% & -1% more inventory than we had a year ago respectively, but about the sales in 1% more in Hunterdon & 7% less in Somerset as compared to 2 years ago.

The market has changed from a seller’s to a buyer’s market above $500K due to the additional inventory coming on to the market.

Also, we are now seeing some millennials coming back into our local markets and buying homes (good news).

 

Interest Rates:

Interest rates have dropped slightly further over the last month.

The economy is strengthening, and Interest rates have fallen in recent weeks to just over 3.75% for a 30-year conventional mortgage. A fifteen-year conventional mortgage rests at just over the 3.18%  mark. Five-year arms are just under the 3.47% range.

Consumer fears of further rises in interest rates and slowly rising home prices are driving the current market demand. The Fed appears to have interest rates on hold for the first two quarters (and maybe the year). We might even see a downward adjustment.

The fear of increasing interest rates, coupled with steadily increases in prices, is still driving the current market activity.

 

National Job Front:

On the national level, the US added over 2,700,000+ jobs in 2018.

US unemployment rate in June came in with 224,000 jobs added.  And unemployment rose slightly to 3.7%.

As of the end of June, the US had added a little over 1 million jobs vs. around 1.4 million the prior year.

At the end of May, there were 7.3+ million openings compared to nearly 5.9 million unemployed persons.

 

New Jersey Job Front:

NJ added 39,000+ jobs in 2018 as compared to 47,100 for the same period in 2017.

The NJ unemployment rate fell to 3.5% (the lowest it has been on over ten years) bolstering consumer confidence in NJ as well.  In effect, NJ is rising with the national tide of nearly full employment.   Based on the first six month’s results, 2019 the state has added 25,000+ jobs in 2019 vs. only 17,000+ for the same period in the prior year.

The level of jobs created was at a much higher level than in the past several years (a silver lining as these additions to our job market will be able to afford to buy houses eventually).

It also should be noted that these jobs are mostly in the northern half of the state.

 

Rental Market Trends:

We have seen an 11 year high in rental availability,

Rental prices in New Jersey rose nearly 5% in 2018, averaging just over $1,600 per unit. Current vacancy rates in New Jersey have fallen to just under 4% statewide and 2.7% in central NJ.  This rise resulted in part by a rapid increase in building in this sector.

The drop in New Jersey’s homeownership contributes to rental demand.  A 12+ year trend shows a decrease from  71% to 66%.  This 7% decrease compared to an 8% national decrease contributes to the slower recovery of home prices in the state and adds over 20,000+ additional renters in our state. However, the 71% level resulted from the loose lending standards of the early 2000s and is actually at a good level.  Households with no children stand at 65%, reflecting the decline in our school population.

One article states that the average homeowner who is 65+ has an average net wealth of over $318K while the same for a renter is only just under $8K.  It also offers a stable place to live, an evident hedge against inflation and a way to build wealth (a strong argument for homeownership).

However, the number of renters has increased by 7% over the past 25 years, with the less educated leading the way.  And, we are now seeing more educated millennials moving east into higher rent and cost of living areas that eat into their discretionary income (including savings).  Makes one wonder where this all is heading.

The pace of new rental construction has increased to meet this demand and now seems to have caught up.

 

New Jersey Foreclosures:

New Jersey continues to face high, but falling foreclosure rate filings dropped to  2.1%. Other states have begun to, or already have recovered. In a tight real estate market, these foreclosures sell at a small discount.

Note: Figures vary by the local market, especially those walloped by Hurricane Sandy three years ago and rural and urban areas. We rank #6 in the country with 2.1%, led by NY with 2.7%, MS with 2.4% (mostly hurricane-related)  LA with 2.4%, ME with 2.1% and trailed by FL, DE, MD, PA, and AL.  The national baseline number sits at a little under 1.3%.

Foreclosures in NJ in 2018 were the lowest in the state in over four years.  And, 2019 looks to be even better with a forecast of under 42,500 foreclosure filings.

 

Real Estate Market Recap

Economic conditions:

  • Nationally, 2018 was the eighth straight year of 2 million + job gains.
  • We are now in our longest economic expansion period in America’s history with 100+ month’s of positive job gains.
  • The GDP is still rising (although its rate of increase seems to be slowing).
  • At 3.5% unemployment, NJ is now near to the national average, which is currently at 3.7% & leading economic indicators in NJ are now surpassing the nation by almost two-fold.
  • The best paying and most attractive jobs are in NYC, pulling many of our millennials in that direction.
  • And, wages are up 3.2% at the same time.
  • Interest rates have dropped to surprising lows of under 3.75% since the first of the year.
  • And, house prices have risen around 3+% in the more popular housing price points and areas further exasperating the situation (although this appreciation now appears to be slowing).
  • Baby boomers who were choosing to “stay put’ and update rather than “move up” to their dream house as it is no longer considered a sound investment (and a lot of times inventory is not available) which is causing most of the housing shortage are now finding available inventory.  This situation has loosened up as many new listings have come on the market over the past few months.
  • And there is still little entry-level construction going on in our area, just larger homes and new rentals.
  • As a result of the previous two points, we are experiencing the current housing inventory shortage (the shelves are empty in our starter housing price points).
  • And, some houses are starting to appear as empty at out higher price points.
  • Foreclosures are on the decline.
  • There is continued confidence that the new tax and jobs act will further stimulate the economy with more jobs as the economy remains robust.

Changes in lifestyle:

  • The average age at marriage is now in the mid to late ’30s (up seven years from just a decade ago).
  • Families usually have only one to two children due to costs and the ability to choose.
  • 70% of all NJ homes have no children of school age, and 50% do not have more than one person in them. This factor minimizes the need for larger housing not only in NJ but everywhere.
  • As a result of job opportunities, buyers are gravitating to areas within 15 miles of NYC with good mass transportation systems.
  • 80% of consumers still perceive homeownership as part of the American Dream.  It is just what they want to buy (or rent) that has changed.
  • Builders have been thinking larger 4 BR center hall colonials on 1+ acre in the country (based mostly on local building codes).
  • Buyers are thinking smaller luxury hi-rise close to mass transportation and work in the east (truly a mismatch).
  • 60% of all new housing starts in 2018 in NJ were in the rental sector.

Market conditions:

  • We experienced a sales slump in late 2018 due to interest rate hikes. But the first half of 2019 made up for it, and the 2nd half also looks promising.
  • It appears that we are now entering the next phase of the housing cycle, which is still active, just less robust in price appreciation.  Sort of a cool down from 2018. Or, maybe back to normal.
  • And, we see some warnings of an economic slowdown starting in late 2020 and beyond as the fed might adjust interest rates to curb inflation.
  • However, these warnings are not holding back sales activity.  We may just see a fewer sales and a little lower price appreciation as a result.
  • The effect on housing is seen to be limited to curtailing the growth of price appreciation and not in any loss in value.
  • But, in general, homeowners are sitting with more equity than ever (NJ reports 92% with positive equity) and are no longer using their homes as an ATM.  So, the effect of any slowdown on housing should be minimal (if at all).
  • Consumer confidence remains high nation-wide based on the job and stock market increases.
  • Most consumers still see homeownership as a sound investment.
  • There is a bit of offset to this encouraging news from the discord that we see in our national politics.
  • This confidence is reflected in buyer traffic being up at open houses.  However, with a lack of inventory in our lower price points, there are fewer houses for sale.
  • Affordability will never be in this good of shape as interest and price increases start to eat into what you can afford.
  • Millennials make up about 35% of our current homeowners with much more room for expansion at the lower end of the market when adequate inventory supply materializes.
  • Central New Jersey’s trend in early 2019 shows an increase in home sales but price increases only in houses clustered in < $400,000 market where the first-time buyers and Millennials are focused.
  • The >$400K 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 (etc.).
  • Minimal new construction, lack of entry-level new housing, and COAH restrictions add additional value to the current inventory.
  • Analysts five-year forecast indicates slow but steady price growth (but at reduced rates) at an annual average of 2 to 4% (depending on location and price point).  This price growth will remain higher in the under $400K market. But, no depreciation in pricing is being forecasted except in the higher end inventory.
  • There is an acute shortage of inventory in both Hunterdon and Somerset County in our more popular price points and locations holding back even more sales.  In general, we have only about 40% of the inventory that we had in 2011 bu are selling current inventory at faster rates.
  • It is simple; we could sell more houses if we had more inventory on hand,  And, as we have started to see small inventory increases over the past six months, 2019 can be a boom for resales.
  • In 2018 prices rose ~ averaging just over 3.5% and depending on price points and locations.  2019 promises to be more normalized with at least 3% growth in prices.  But it depends on your price point and location. The following two years will also see less in % but should still show modest positive growth.
  • Mortgage delinquency is normalizing.

 

Forecast:

  • The economy will continue to prosper with no recession currently in sight for the next 18 to 24 months.  And, there most likely will be only a slowdown impact on the rate of price appreciation if this happens.
  • Prime Interest rates will probably not climb too much further in 2019.  And, we have just seen a slight drop.
  • Home prices will rise by an average of another 3% during that same period (this will depend on your price point and location) further decreasing buying power. And, the most bullish projections show at least a 7% increase over the next few years.
  • While improving, supply will remain tight in the more popular price points in the residential real estate.
  • Many new jobs seem to be resulting from the Tax and Jobs act (just look at the help wanted signs).
  • For the first time in memory, the US is reporting 7.3+million open jobs and only 5.9 million unemployed.  We are at full employment if you consider that 3% of unemployed is the normal level.
  • We now need to match the skills of the unemployed to the job openings to prosper further as many four-year degrees currently being obtained, are not useful in the current job market. It has also opened up the need for inward migration of workers to out the economy.
  • The affordability index shows that there is room for much more sales; we just need an increase in inventory.  The most affordable time to buy appears to be now!.
  • Some high-end fall-out has resulted in the residential real estate from the SALT and mortgage interest changes in the Tax and Jobs act.
  • The commercial real estate market is flourishing as a result of creating more buying demand.
  • People in their home > 10 years have very positive home equity built up, and a more significant portion of payments applies to principle.  Increases in selling prices should eventually motivate people to make changes in their lifestyle by investing in summer homes or even start a new business with the extra equity cash.
  • Small investor activity in the market is up.  In a lot of cases these are flippers who are buying low end unsaleable inventory and bringing it up to marketable status.

Note:  Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. I took reasonable precautions for 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.

 

You can ask me a question or request a monthly copy of this newsletter here.

 

 

 

 

 

Hunterdon is the place to be for active seniors, and there’s lots of them

Hunterdon is the place to be for active seniors, and there’s lots of them

Reposted from NewJerseyHills.com

“A study shows there will be more senior citizens in Hunterdon County than kids below the age of 18 within 10 years,” said Councilman Al Rylak at a Clinton Town Council meeting last month.

Although considered a high-priced area in which to live, Hunterdon County can be a great place for retirees even if their pocketbooks aren’t as “flush” as some of their neighbors. In other words, you don’t have to be wealthy to find a lot to do with your spare time. The county has a wealth of senior citizen groups with a lot to offer. Some adhere strictly to age restrictions of 65 or more, but others generously welcome younger folks in their 50s.

In the northern part of the county, there are a number of cost-effective opportunities for seniors, mostly run by the seniors themselves. Some towns support their activities by providing places for them to meet or with other contributions, but in most cases today’s seniors are a generation that like to make their own rules and choices.

If you are now retired, consider reaching out to one or more of the following groups to meet old friends, make new friends, and add a bit of entertainment to your daily life. If you no longer drive, perhaps you can connect with a fellow senior citizen willing to bring you along.

The largest group in the area is the completely self-sustaining Clinton Township Seniors Club (CTSC) with a membership of 80 plus. They do not receive any support from local government, leaving them free to not only choose what activities they can pursue, but removing all age and residency requirements municipally-run senior programs often impose.

The CTSC meets at 10 a.m. on the second Wednesday of each month in the Annandale Reformed Church on the corner of West Street and Beaver Avenue. Most meetings offer speakers or activities of a wide variety.

What has really drawn a large membership to the CTSC though, is that they are day-trippers. It is an opportunity to go places without having to drive great distances. Just sign up, drive to Annandale and hop on the bus. The club has no age or residency restrictions, but of course virtually everyone is over the age of 55 since anyone younger is probably at work on weekdays. It is a club of seniors living within a 15-20 mile radius of Annandale.

This year’s monthly trip itinerary included Broadway plays as well as performances at a variety of venues in New Jersey and Pennsylvania. On Tuesday, May 15, the bus is full for a trip to Lancaster, Pa. In July they’ll be taking the Spirit of New Jersey Cruise, luncheon included. To learn more about the club, call club president Sandy Pill at (908) 404-5448.

Although it is one of Hunterdon’s smallest towns, Lebanon Borough has a very active senior group. In addition to their monthly meetings at 10 a.m. on the fourth Wednesday of each month with interesting programs and refreshments; fun bingo from 1-3 p.m. on the second and fourth Mondays of each month; and chair yoga exercises from 11:30 a.m. 12:30 p.m. on Wednesdays. The Lebanon group is independent of the Borough government, but enjoy the benefit of being allowed to hold all of their meetings and other activities in Borough Hall on High Street. They just held a luncheon to celebrate their 13th anniversary, complete with magician-comic Rick Vale.

Like virtually all of the senior groups in northern Hunterdon, the Lebanon group also enjoy day trips. They will be going to the Mt. Airy Casino in June and Manasquan’s Crystal Point Yacht Club in July. They are also planning a 3-day trip to the PA Amish country in late September.

One problem all the clubs have had to deal with when it comes to excursions is being able to fill a bus. No one could afford renting a bus for only a handful of travelers. In Lebanon, there are 15 resident members and 20 that live in surrounding communities. So, they cooperatively travel with another small senior group in Bound Brook, which has 40 to 50 members, to have enough travelers to fill a bus. For more information, call club president Maddie Nolan at (908) 287-7949.

Another club that had been somewhat dormant for a while but has now reactivated is the Senior Club of Oldwick, which meets at 10 a.m. on the second Monday of each month in the Oldwick Firehouse. For those 65 plus, the reorganized club already has 35 members and is still growing.

“We were previously called the Tewksbury Township Seniors, but not enough people were coming,” said organizer Jim Reed. “Tewksbury doesn’t contribute anything to the club and we welcome non-residents. Only members can play bingo, though.”

Reed said no day trips have been planned yet, as they just began activities a few months ago, but they are looking into what excursions may be available. For more information, call Reed at (908) 439-2329.

In Readington Township there is a township sponsored seniors group for residents only, 60 plus in age. They meet at 12 noon on the third Wednesday of each month at Polish American Club in Whitehouse Station. They do, however, work jointly with a senior group in Raritan Borough to be able to fill a bus for their day trips. For more information, call club president Diane Anthony at (908) 534-4724.

Once out and about you will find a lot of the seniors have joined multiple clubs in the area to take advantage of more opportunities. In Bethlehem Township for example 80 percent of the members live there while 20 percent do not. Their minimum age is 55, and they meet at 12:30 a.m. for lunch on the first Monday of each month at 405 Mine Street, to the right of township hall. There are monthly programs, “out to lunches” and some day trips. For more information, call club president Sandra Bailey at (908) 917-8206.

“We try to offer a program every month,” said Bailey. “Our day trips are mostly by car-pooling, and the township provides us with a stipend for each trip.”

Lebanon Township does not have a senior club, but support the YMCA senior center on County Route 513 in Bunnvale with an annual $4,000 donation. Others communities like High Bridge, Clinton Town and Califon do not sponsor or financially support senior clubs; but you will find their residents involved with the other area clubs.

As part of a community outreach program, the sister facilities of Rolling Hills Care Center in Clinton Township and Hunterdon Care Center in Raritan Township, are a source for local groups to find informative speakers as well as entertainers for their meetings. They also run some day trips, and you don’t have to be a care center resident to go along. Most travelers are 50 plus years of age, but there are no age restrictions. For more information call director of community services Joani Lauyer at (908) 783-0116.

Their most successful outreach has been Bingo, held at 12 p.m. on the third Thursday of each month at the VFW Hall on Main Street in Glen Gardner.

“It is a free program, but has become so popular we now need to have a head count beforehand,” said Lauyer. “We serve a full course luncheon, and last month 120 people came. We were worried we would run out of food.”

So don’t sit home bored, take advantage of all the fun times and new friends that are waiting for Hunterdon’s retired residents.

Keep an eye on the Hunterdon Review’s weekly “Things To Do” listing of upcoming events which will soon be adding more senior clubs in northern Hunterdon including speakers and upcoming excursions.

 


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Springtime events are busting out all over in Hunterdon County

Springtime events are busting out all over in Hunterdon County

Reposted from NJ.com

Now that spring is here, events are popping up all over the area. People are ready to get outside, interact with others, and participate in what’s going on.

* All of Lambertville will be coming alive this weekend. It’s the 37th annual Shad Fest, set for Saturday and Sunday, April 28-29. Shops, stores, galleries and eateries will be welcoming guests from far and near. Bell’s Tavern at 75 Bridge St. will be offering crab cakes and enjoy beer and wine at the Beer Garden. Most places will be opening at noon both days.

* Prallsville Mills is holding the annual Rummage Sale on Saturday, April 28, 9 to 4 and on Sunday, 9 to noon, with half-price kicking in noon to 2. Expect many different gently-used goodies – clothing and accessories, household decor and artworks, kitchen stuff, DVDs, video games and books, tools and hardware, sports equipment and musical instruments. The big sale is located at 33 Risler St., Stockton.

***

Next weekend, Saturday and Sunday, May 5-6, the Clinton Community Center will come alive with the One Spirit Festival. It is the 10th year of this popular event that attracts upwards of 500 people. It runs 10 to 5 both days at 63 Halstead St.

“We’ll have about 40 booths both inside and outside in tents,” said Christina Lynn Whited. “Vendors will have the opportunity to give half-hour lectures and meet with individuals.” Christina is the organizer of this big event.

One Spirit Festival is where the general public meets and interacts with the metaphysical community. For complete information, visit OneSpiritFestival.org, and access the vendors with descriptions of their specialties at that site.

In addition to channelers and readers and mediums and healers, expect practitioners in acupuncture, chiropractic, aromatherapy, astrology, Reiki, reflexology, shiatsu, authors and more. On hand will be specialists in crystals and jewelry, handmade crafts, diet, wellness, handmade crafts plus others. Food will be available, along with door prizes.

“I am doing more pottery and painting these days,” said Laney Britten. She hails from Annandale and will be on hand at One Spirit Festival. “We offer computerized astrology reports.”

Years ago, Peter Jarvis bought some Himalayan salt lamps. It started him on his journey with crystals. He tells visitors, “You’re not here to pick out a crystal. The crystal will speak to you and picks you out.” He will be offering crystals as well as books at the show.

Sue Ann Seccia-Harnden and her colleague Virangini Cindy Rounsaville are looking forward to the One Spirit Festival. They are known as The Holistic Pet Gals and they will be giving a talk “Holistic Pet: Unleashing Your Pet’s Inner Healer to Address Everyday Common Issues Safely and Naturally.” Bring your questions for some serious answers your pet will appreciate, and connect with The Holistic Pet Gals for their on-going work with pet parents.

***

Christina Lynn Whited is a busy woman. Not only does she organize and oversee the One Spirit Festival in the spring and again in the fall, she also operates a store. It’s called Inside/Out and it is located at 76 Main St. in High Bridge. Access at InsideOutOnMain.com.

In this one-of-a-kind shop, you’ll find crystals, fairies, angels, books, metaphysical tools and other items both decorative and nostalgic. Handmade items crowd the floor and shelves. They are for home and personal use, including statuary of wizards, unicorns and animals.

She also operates the CircleOfIntention.com. Various products and services are offered here, including accessibility to tools and techniques in self help, emotional healing, aura clearing, and private consultations.

For more info, call Christina at 908-638-9066 and visit the websites listed above.

***

Mario Russo runs RC Collectibles and he is holding a Customer Appreciation Day on Saturday, May 5, noon to 6 p.m. He is heavy into sports collectibles, as well as nostalgia, and some heavy weights will be on hand for the day’s activities.

“It’s a cool event with great guests who will be meeting people and taking questions,” Mario said.

Special guests include legendary major league umpire Al Clark, baseball original Mets baseball great Frank Thomas and nationally recognized artist James Fiorentino.

“With every purchase now until the big day, receive raffle tickets for our grand prize drawing,” said Mario. “When the wheel spins, it’s a chance to win a Mickey Mantle autographed baseball, an Aaron Judge signed card, James Fiorentino sports art, a $100 gift card and more.”

There’s more. At 2:45 p.m. there’s a baseball pack break at $35 per seat. The silent auction goes on all day until 6 p.m. Frank Thomas will be signing autographs beginning at 3:30, and Al Clark will sign beginning at 4. Break is set to begin at 5 for a round table featuring all three guests with a Q & A session.

For more info, call 908-840-4698 and visit RCcollectibles.com. The store is located at 1060 Route 22 in Lebanon.

***

Harry Potter fans will be excited to attend the Potterheads’ Book Club meet on Saturday evening, May 5, from 4:30 to 9 p.m. at the Califon Book Shop.

This event focuses on the second Harry Potter book, The Chamber of Secrets. Led by Nora Cubberly, it includes a discussion, potion craft, pizza dinner and movie viewing. You should read the book before attending.

Space is limited, so RSVP to 908-832-6686. The event is $15 per potterhead. More at CalifonBookShop.com. The shop is located at 72 Main St., Califon.

 


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Why Outer Suburbs in the East and Midwest Have Stopped Booming

Why Outer Suburbs in the East and Midwest Have Stopped Booming

Reposted from the NYTimes.com

Many counties, including rich ones, are aging and experiencing more deaths than births, without growth through immigration or migration.

Hunterdon County, N.J., is rich. It ranks sixth nationally among counties in median household income, and has for decades exemplified the American outer-ring suburb.

But in one crucial measure, this exurban enclave 60 miles west of Manhattan resembles old mill communities in northern New England or impoverished regions of Appalachia. The measure is death as compared to birth, otherwise known by demographers as “natural increase.” In this case, it’s negative.

Hunterdon County residents gave birth to 3,590 babies between 2013 and 2016. But even more residents — 3,647 — died. Go back to a four-year period two decades earlier: 5,882 births, 2,947 deaths.

Some American communities that until recently were considered demographic boom towns are now caught up in a downward demographic mix: young people having fewer children, the boomer generation getting older. And migration patterns, stalled by the recession, are resuming, but only in certain parts of the country.

Through 2016, about one in four outer-ring suburbs were experiencing more deaths than births, including 18 of 30 such counties in New York, New Jersey and Pennsylvania.

Some of the once-fastest-growing counties in the United States are growing no more, and nationwide, the birthrate has dropped to levels not seen since the Great Depression.

“It is one of the biggest puzzles of my career as a demographer,” said Kenneth Johnson, a sociologist at the University of New Hampshire who has studied the various components of population change for years. “Each year when new data comes out, I expect to see a significant uptick in births, but I have yet to see it.”

More than 1,200 counties in the United States — home to one in seven Americans — had a negative natural increase in population in

For many counties, this makes migration especially important for population stability and growth. Counties in the Northeast and Midwest that have traditionally lost residents to the South and West are having a harder time propping up their population numbers.

Some maintain their numbers because of immigration, but American immigration policy is now a subject of debate, and a smaller number of immigrants would put more pressure on counties facing population loss.

The nation’s sprawling growth pattern has taken its share of criticism; it’s associated with long-distance commuting, environmental degradation and urban decay. But population stagnation in places that had been growing will most likely bring its own sets of problems, including pressures on real estate values and eventual shrinking of political representation.

And it starts with babies. The estimated lifetime births per woman is down 16 percent from a recent peak in 2007.

New Census Bureau projections say that Americans over 65 will outnumber children under 18 for the first time in U.S. history by 2030, and that “a rising number of deaths will increasingly offset how much births are able to contribute to population growth.”

Migration dropped significantly during the recession, Mr. Johnson said, but has returned to pre-recession patterns, albeit at a slower pace. Florida, Texas and Arizona have all seen population inflows resume, for example, while states in the Northeast and Midwest that were losing residents

2016. In total, 1,700 counties experienced a negative natural increase at least one year this decade.

With new county-level census population estimates due out this week, demographers will track not just the population gains and losses but the components of change: births, deaths and the movement of people. And though migration (both immigration and moves from one state to another) gets most of the attention, changes in birth and death patterns are increasingly important to migration have resumed losing them.

Births, on the other hand, have not returned to pre-recession patterns. They’ve instead skewed sharply in a negative direction.

The number of deaths continued to rise during the recessionary period, but births have yet to rebound from the impact of the recession,” Mr. Johnson said.

This has been most pronounced in places that have long struggled economically, but it’s also now increasingly common in well-off suburbia.

In many areas, young people, besides having fewer children, are not as enamored of the suburbs as previous younger generations. This is especially true in cities experiencing urban revivals like New York.

“Millennials don’t want to be in outer suburbia,” said James W. Hughes, the emeritus dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

Whereas previous generations of young couples streamed ever farther out to the suburbs in search of larger lots and lower taxes, the current crop prefers Brooklyn, Jersey City and other locales close to the urban core.

Perhaps the largest symbol of Hunterdon County’s shifting demographics, Mr. Hughes said, is the million-square-foot hexagonal office building that lies abandoned in the county’s lush woodlands. Merck erected the environmentally friendly facility on 460 acres with much publicity in the early 1990s, only to pull up stakes 20 years later and move back to the suburbs’ inner ring.

When they built it, no expense was spared; now it’s just sitting there,” Mr. Hughes said, though local officials recently announced the company was in negotiations with a buyer.

Population had grown rapidly for years in the 11 outer ring counties of the New York metropolitan area, Mr. Hughes said. But those counties are all like Hunterdon: shrinking, with slowing migration and more deaths than births.

Enrollment at some Hunterdon County school districts is down by as much as 20 percent, he said, and although plenty of older residents remain in place, they will most likely end up paying more to live there as the tax base shrinks along with the population.

The birth-death ratio is declining faster in the suburbs of large cities than in the cities themselves, data compiled by the demographer William Frey of the Brookings Institution shows.

In 2008, there were 1.9 births for every death in what Brookings terms the “emerging” suburbs — places like Hunterdon County where the suburban foothold has not yet overtaken the rural character. Less than 10 years later, the ratio had dropped to 1.5, roughly the rate of rural America last decade.

Not only are many outer suburban counties aging, but they also tend to be disproportionately white, said Mr. Frey, which probably contributes to the falling birth-death ratio in suburban counties, since the birthrate is especially low for white women.

In some parts of the South and West, the birth-death imbalance is masked by increasing migration, which still drives population growth. The suburbs there are still popular and attract local, national and international migrants.

Yet many communities in the North are net exporters of migrants — more people leave than move in.

Mr. Johnson said the natality data resembles that of another time in history, but without the obvious economic explanation: “The only other time we’ve been in a situation like this has been in the Great Depression itself. There was a drop in women having children, especially young women, and they never made up for never having children young when they got older.”

 


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