City residents better off?
From Newsday:
Report: NJ cities in better shape, but not their residents
Report: NJ cities in better shape, but not their residents
Many of New Jersey's cities have seen an increase in jobs and property values over the last 10 years, but the changes are not bettering the lives of their residents, according to a report released Tuesday.
The study by the Housing and Community Development Network of New Jersey found housing prices, property values and job growth in 30 cities have outpaced the rest of the state since 1999.
But it found long-term city residents can neither afford the new homes nor qualify for new jobs. The survey also shows that nearly half of city children live in single-parent households.
"New Jersey cities are doing better today than they were 10 years ago, but unfortunately the residents of the cities aren't faring quite as well," said Staci Berger, advocacy director for the network.
The report also questioned whether the positive gains in cities would continue, citing concern about inflated real estate prices, and unpredictable state aid and tax incentives.
...
"The cities have become an economic engine for New Jersey," said Alan Mallach, the report's author and a former Trenton housing and development director. "They are no longer what people consider to be a drag."
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The full report can be found here:
Cities in Transition: New Jersey’s Urban Paradox
From Newsday:
State's unemployment rate rises as more people look for work
New Jersey's unemployment rose to 5.3 percent in August, its highest level in more than two years, even as the national rate declined, the state reported Tuesday.
Despite the higher unemployment rate, New Jersey added about 400 jobs, according to an estimate from the New Jersey Department of Labor and Workforce Development. The rate rose because nearly 20,000 more people were looking for work in August than in July.
In July, the state unemployment rate was 5.1 percent. It had not been as high as 5.3 percent since February 2004.
According to the data, about 4,080,700 people were working in non-farm jobs in New Jersey in August.
Nationally, the unemployment rate declined from 4.8 percent to 4.7 percent from July to August.
While I am well aware this is not the purpose of the author, this is the story of the housing bubble in a nutshell. Home prices have risen beyond the level of affordability. That, and that alone is enough to drive down prices.
People will always want more house than they've got, but if they can't pay for it, they aren't going to buy it. That is the problem underlying all the crappy loans. If lenders stuck to decent lending standards and borrowers weren't so thick as to sign off on loans with exploding payments we wouldn't be where we are, but then again if my grandma had wheels, she'd be a bicycle.
Lindsey
Lindsey,
People put too much trust in RE agents and think they know best. RE agents have really pulled the wool over joe six pack's eyes.
SAS.
don't know if this is a repeat..
Mass foreclosed-home auction in Michigan
Homeowners in so-called 'auto-wreck' states have trouble keeping up with payments; region leads nation in foreclosures.
A few posts are very bullish on future rent increases.
Doesn't rent increase count towards inflation? Wouldn’t higher inflation in turn cause the feds to raise interest rates? Wouldn’t higher interest rates cause housing market to crash even faster?
{{{A few posts are very bullish on future rent increases.
Doesn't rent increase count towards inflation? Wouldn’t higher inflation in turn cause the feds to raise interest rates? Wouldn’t higher interest rates cause housing market to crash even faster?}}}}
Its not being 'bullish'. It is based on what is really going on in the real estate market & the strength of the economy & job market.
Plummeting oil prices, the tightest labor market in 6 years, and wage increases will ensure higher rents across the board EVEN if the housing market "slows".
Its will be very very interesting to see what the fed does. Oil prices have fallen about $10 and gasoline at the pump is headed under $2.00 a gallon.
This will lead to a full reacceleration of consumer spending & retail sales leading to spot shortgages because retailers never thought that the back to school season and holiday season would be as strong as they will be.
Consumer spending is set to grow at the fastest rate since 1999 or maybe the fastest since 1983 after the deep 1981-1982 recession.
The wealth effect may have disappeared from slowing home price appreciation but this is more than compensated by the 'income effect' of the largest wage & income gains since the late 1990's or maybe even since the 1960's.
The job market is super strong in NYC and on Long Island as well.
Recent college grads & twenty somethings have never had it better economically in the last 50 years as it has been since 2001.
{{{Doesn't rent increase count towards inflation? }}
The inflation rate in NYC is the highest since 1990 at 5.6%. Rents, gasoline & food prices have been the driver of inflation...
But demand has taken off and many apartments are RENTING (yes renting) for more than asking rent. I read in the NY Times about recent grads offering $4,000 a month for a one bedroom apartment on the Upper East Side when it is listed at only $3,750 a month.
In the 'other 4 boros' most apartments rent for close to $2,000 a month with a standard brokers fee of 15% of annual rent when it used to be one month brokers fee.
{{Despite the higher unemployment rate, New Jersey added about 400 jobs, according to an estimate from the New Jersey Department of Labor and Workforce Development. The rate rose because nearly 20,000 more people were looking for work in August than in July.}}
In a tight labor market like we are in nationally and in the NYC metro area it is hard to find people with the right skills (Soft AND Hard Skills) ,who know what traditional business attire is (Hint: It isn't worn on MTV or on reality TV but maybe just as expensive as the usual outfit of the $50 T Shirt & $300 Jeans), and have a stable employment history with verifyable checkable references.
Many companies are sitting on many unfilled openings because they cannot find the right people who have the above. Also, no one wants to work for less than $80,000 a year. $50,000 or $60,000 is seen as minimum wage.
I guess it depends on the work you do, but NYC has been TERRIBLE for tech since the 2000/2001 crash.
It's all consulting jobs and shady operations (like DirectRevenue and other adware/popup boiler rooms), or it's moving across the river (or out of the region, or out of the country).
Maybe they need more lawyers or Vee-Jays in NYC, but they definitely don't need tech nerds. Last I heard of anything that wasn't lame was the Google office, and even _they_ suck :/
Also, no one wants to work for less than $80,000 a year. $50,000 or $60,000 is seen as minimum wage.
In the 5 boroughs, that IS minimum wage! You cannot live alone in a 1br apartment for that unless you have a concealed-carry permit, since the neighborhoods you could afford a 1br in would require you to be armed at all times.
Remember, after taxes, that's more like $30k, and a 1br @ $1400/mo eats over half that take-home. Then you've got utilities >$150/mo easily, vehicle insurance, transportation costs, higher bodega prices, etc. Where is the 10% to put into a 401k?
Nope, these companies are insane if they think they can hire folks at the same rate they could in, say, Billings or Omaha. Which is part of why I moved.
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