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Consumer Spending in U.S. Shows Biggest Gain in Almost Six Years

June 25, 2015 — 8:30 AM EDT
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Household spending climbed in May by the most in almost six years, buoyed by gains in incomes as the U.S. job market strengthened.
Purchases increased 0.9 percent, the biggest gain since August 2009, after rising 0.1 percent in April, Commerce Department figures showed Thursday in Washington. The median forecast of 75 economists in a Bloomberg survey called for a 0.7 percent advance. Incomes rose 0.5 percent for a second month.
Consumers may finally be putting savings from lower gas prices to work after holding back earlier this year. Higher stock and home prices that are lifting household wealth, in addition to increases in employment, may help Americans feel secure enough to boost spending.
“You have all these indicators pointing to stronger labor market dynamics, and at the same time you have stronger wage growth,” Gregory Daco, head of U.S. macroeconomics at Oxford Economics USA Inc. in New York, said before the report. “We are expecting consumer spending to accelerate quite sharply in the coming quarters.”
Another report showed the number of applications for unemployment insurance benefits held below 300,000, a level typically consistent with a strong labor market, for a 16th consecutive week. Jobless claims rose by 3,000 to 271,000 in the week ended June 20, according to figures from the Labor Department.
Projections for consumer spending in the Bloomberg survey ranged from gains of 0.3 percent to 1 percent. The previous month’s reading was revised up after being initially reported as little changed.
Survey Results
The Bloomberg survey median called for incomes to rise 0.5 percent. April’s income reading was revised up from a previously reported 0.4 percent increase.
The report showed the price index tied to consumer spending increased 0.3 percent in May from the prior month. It rose 0.2 percent from May 2014. This inflation measure is preferred by Fed policy makers and hasn’t met their 2 percent target since April 2012.
Stripping out the volatile food and energy components, the price measure increased 0.1 percent from the month before and climbed 1.2 percent in the 12 months ended May.
Inflation will “move gradually back” toward the Fed’s goal as the impact of lower prices of energy and imported goods fades, Fed Chair Janet Yellen said in a press conference last week at the end of a two-day policy meeting. “The committee continues to judge that the first increase in the federal funds rate will be appropriate when it has seen further improvement in the labor market and is reasonably confident that inflation will move back to its 2 percent objective over the medium-term.”
Spending Jumps
Thursday’s report also showed that after adjusting for inflation, which generates the figures used to calculate GDP, purchases climbed 0.6 percent last month, the biggest gain since August, after being little changed in April.
That increase may provide a needed lift to growth, especially after a poor showing in the first three months of the year. Commerce Department data Wednesday showed the economy shrank 0.2 percent at an annualized rate in the first quarter. Consumer spending climbed at a 2.1 percent pace after jumping 4.4 percent at the end of 2014.
Spending on durable goods, including automobiles, increased 2.3 percent in May after adjusting for inflation, following a 0.1 percent drop in April, Thursday’s data showed. Purchases of non-durable goods, which include gasoline, rose 0.9 percent, while outlays on services climbed 0.2 percent.
Auto Sales
Auto sales have been boosting the spending figures, with cheap financing helping fuel Americans’ appetites for vehicles. Industry data from Ward’s Automotive Group issued earlier this month showed cars and light trucks sold at a 17.7 million annualized rate in May, the strongest pace since July 2005.
Fuel savings may also be benefitting retailers such as restaurants, even if indirectly.
While business at steakhouse operator Ruth’s Hospitality Group Inc. may not be heavily influenced by gas prices due to its customer base, there could be knock-on effects, Chief Executive Officer Michael O’Donnell said at a June 9 industry conference. “What does affect them is if their businesses are doing better because gas prices are down. Then, they’re more likely to spend money.”
Disposable income, or money left over after taxes, increased 0.2 percent in May from the prior month after adjusting for inflation. It was up 3.5 percent over the past year. The saving rate decreased to 5.1 percent from 5.4 percent in May.

Isn’t it rich? The Donald presents his financials

Donald-Trump2

Donald Trump wants everyone to know just how really, really rich he really, really is. At a Trump Tower press conference last week to proclaim that he is a Republican presidential candidate, the real estate developer and reality-TV star waved around a piece of paper that he said demonstrated his net worth is $8.7 billion.

This figure is more than double other credible estimates of his wealth and raises the question of how seriously should we take Mr. Trump’s latest claim. The short answer: Not at all.

For starters, Mr. Trump’s financial “statement” said his real estate licensing deals, brand and branded developments are worth $3.3 billion—his greatest source of wealth. But there’s no information documenting the income or cash flows generated from lending out Mr. Trump’s name to casinos, condos or whatever. So you’ll just have to take his word for it.

Mr. Trump also said he holds $302 million in cash and marketable securities. But there are some unusual qualifiers. For instance, Mr. Trump said he’s counting cash “before the collection of significant receivables.” Sounds like someone owes The Donald big-time. Who? Can he collect? After all, just because someone wrote an IOU doesn’t mean they can pay.

One last point: Mr. Trump claimed that his financial statement has been audited by a “big accounting firm—one of the most highly respected.” It would bolster the credibility of his statement if he would name it. Or perhaps not: Former Crain’s Publisher Alair Townsend said it best back when she was a deputy mayor for Ed Koch and tartly observed that she wouldn’t believe Donald Trump “if his tongue were notarized.”

GOLDMAN TO LEND TO CONSUMERS

Goldman Sachs is preparing to launch an online consumer-lending unit. The new venture would rival Main Street banks and other online lenders in offering $15,000-to-$20,000 loans that carry low interest rates. The investment bank expects to issue its first loans next year.

AREA’S A&P STORES ON THE BLOCK

A&P, the owner of its namesake supermarkets as well as Pathmark, Food Emporium and Waldbaums, is unloading 137 of its stores in New York, New Jersey and Connecticut. Dozens of stores in the city—encompassing poorly performing and lucrative locations—are on the block, including 10 Manhattan Food Emporiums. A&P, with 301 stores and partly owned by Ron Burkle’s Yucaipa Cos., has been struggling to turn a profit.

MARTHA STEWART NEARS SALE

Sequential Brands Group, which owns Linens ‘n Things and Ellen Tracy, is close to buying Martha Stewart Living Omnimedia. If the deal closes, it would mark the end of an independent publishing and housewares conglomerate built by Ms. Stewart. Terms of the deal are being hashed out. Martha Stewart Living Omnimedia had a market value of $370 million last week, a fraction of what it was worth in 1999. Sequential buys brands and licenses them to retailers and manufacturers.

UNITED DEPARTS JFK

United Airlines will stop operating at JFK airport in October and move its overseas flights to Newark airport. The switch will let the airline increase the number of round-trip flights between Newark and the West Coast, as well as boost its premium-seating service for business travelers at Newark.

ARIANNA TO STAY AT HUFFPOST

Arianna Huffington has renewed her contract as chairwoman, president and editor in chief of her namesake online publication, ending rumors that she would exit the company she founded, given that Verizon now owns The Huffington Post.

CAR-FREE PARKS

More of Central and Prospect parks will soon be off-limits to cars. The city will permanently close to traffic a portion of the northern end of Central Park and the West Drive of Prospect Park.

IN MEMORIAM

JPMorgan Chase & Co. Vice Chairman Jimmy Lee died of a heart attack at the age of 62. Lee, who oversaw the bank’s investment arm, was known for his work in the syndicated loan market and as a dealmaker advising major conglomerates like General Electric.

$100m Cornell Tech gift

Michael Bloomberg is donating $100 million to Cornell Tech. The money will endow the first phase of construction of the $2 billion Roosevelt Island campus, which includes the Bloomberg Center, an energy-efficient academic building that will be named after his daughters, Emma and Georgina. His gift was announced in advance of the groundbreaking ceremony, where Mr. Bloomberg shared the stage with his successor, Mayor Bill de Blasio, who credited his predecessor with spearheading the graduate school’s creation.

Donald Trump Announces 2016 Presidential Campaign: ‘We Are Going Make our Country Great Again’

Donald Trump

Donald Trump, the real estate mogul, reality television star and hair icon, today announced he is taking his first run at the White House.

From the iconic Trump Tower in New York City, the Donald told his supporters he is “officially running for president of the United States.”

“We are going to make our country great again,” Trump, who turned 69 on Saturday, declared.

He added, “I will be the greatest jobs president that God ever created.”

In 2012, Trump launched a Presidential exploratory committee and visited key battleground states before bowing out in May 2011. This time though, Trump says he’s in it for the long haul; he plans to step away from the day to day management of The Trump Organization, and hand the reigns over to his children: Ivanka, Donald Jr, and Eric. He has also chosen to step aside from his hit reality show, “The Apprentice.”

“They all said, a lot of the pundits on television, well, Donald will never run, and one of the main reasons is he’s private and he’s probably not as successful as everybody thinks,” said Trump, who has never held public office before. “So I said to myself, you know, nobody is ever going to know unless I run because I’m really proud of my success.”

“Sadly the American dream is dead. But if I get elected president I will bring it back, bigger, and better, and stronger than ever before,” Trump said today to a packed room of supporters.

Last month, Trump told ABC’s Rick Klein, “Politicians are all talk, no action. They do a terrible job; a tremendous disservice to the country. And I know them better than anybody, and I love them – I think they’re great. It’s easy to make money with politicians. But, the fact is that it’s all talk and no action…and the country’s going to hell.”

Trump entered the real estate business started by his father, the late Fred C. Trump. Today, the kid from Queens is worth just over $9 billion, he claims. The name Trump can be found on countless Manhattan buildings along with hotels and golf courses across the globe.

“I’m really rich,” Trump said after declaring his candidacy today.

Trump made many promises throughout his speech: “I would do various things very quickly. I would repeal and replace the big lie, Obamacare.”

“I would build a great wall, and nobody builds walls better than me believe me, and I’ll build them very inexpensively. I will build a great, great wall on our southern border, and I will have Mexico pay for that wall.”

“Nobody would be tougher on ISIS than Donald Trump, nobody.”

“I will stop Iran from getting nuclear weapons,” said Trump, who also said that he wouldn’t allow Secretary Kerry to spearhead the negotiations.

“And I promise I will never be in a bicycle race,” said Trump, referring to Sec. Kerry’s biking accident in May.

Trump has been married three times, his longest marriage to Ivana Zelnícková ended in divorce in 1992, he married actress Marla Maples a year later until they called it quits in 1999. His current wife, Melania Knauss married the Donald in 2005. Trump has three children from his first marriage – Donald Jr, Ivanka and Eric, a daughter Tiffany from his second marriage, and a son Barron with wife Melania. Ivanka had the pleasure of introducing her father, whose grand entrance to his announcement event was a ride down an escalator.

“Our country needs a truly great leader,” Trump said Tuesday. “And we need a truly great leader now. We need a leader that wrote the art of the deal, we need a leader that can bring back our jobs, can bring back our manufacturing, can bring back our military, and take care of our vets.”

The Democrat National Committee responded to Trump’s announcement with a statement: “Today, Donald Trump became the second major Republican candidate to announce for president in two days. He adds some much-needed seriousness that has previously been lacking from the GOP field, and we look forward hearing more about his ideas for the nation.“

 

Real Estate Magnate Pushes for a Casino in North Jersey

Jeff Gural, the New York real estate tycoon, had cleaned up well.

The shaggy, steel-gray beard was gone. The customary khakis had given way to a blue suit. As he sat on a dais on Thursday at the Meadowlands Racetrack he has operated in East Rutherford, N.J., for over two years, a smile spread across his face.

A dozen elected officials were in the room to endorse putting a referendum before voters this fall to expand gambling to northern New Jersey and to support Mr. Gural’s vision for a $1 billion casino at the racetrack. In a surprise, Vincent Prieto, a Democrat who is the State Assembly speaker, also showed up to express his support.

Though he was not at the event, Gov. Chris Christie, a Republican who had once been cool to the idea, has also become a proponent of a casino in the northern part of the state.

Continue reading the main story
RELATED COVERAGE

As Casinos Close in Atlantic City, a Push for More, Closer to New YorkAUG. 18, 2014
Building allies among elected officials and capitalizing on a growing momentum to expand gambling in New Jersey, Mr. Gural is seeking to edge closer to what has long been a tantalizing goal: a gambling site just a few miles from New York City.

Photo

A rendering of the Hard Rock International, a casino proposed for the Meadowlands Racetrack. Credit Zimmerman Architects
His pitch: With over 14 million adults within 50 miles of the racetrack, Mr. Gural and his partner, the Hard Rock, estimate that their proposed Hard Rock Casino could generate $400 million a year in tax revenues; half of that would go toward reviving Atlantic City, where four casinos closed last year.

“It’s a spectacular project,” Mr. Gural said.

It must still overcome opposition from Atlantic City and lawmakers in South Jersey and win a statewide referendum. But the battle over the future of gambling in New Jersey has placed Mr. Gural, 73, at the nexus of a fierce tristate gambling war in which Pennsylvania casinos have sucked the life out of Atlantic City; the only casino in New York City is a runaway success; and a $1 billion casino resort in the Catskills is being built to grab patrons from North Jersey as well as New York and Pennsylvania.

Mr. Gural has essentially sat down at the regional blackjack table to play three simultaneous hands. Not only is he bidding for a casino at the Meadowlands Racetrack, seven miles west of Manhattan, but he will also soon submit a bid for a full-scale casino in Nichols, N.Y., near the northern border of Pennsylvania.

Then there is his pat hand: Mr. Gural and his partners own the land underneath the Sands Casino Resort in Bethlehem, one of Pennsylvania’s most successful casinos.

And he does not even like casino gambling.

It is really all about his lifelong love of horses, he said.

“Saving the horse industry is just as important as saving Atlantic City,” said Mr. Gural, who owns farms in Stanfordville, N.Y., and Litchfield, Pa., where he raises as many as 80 Standardbred horses. “There was no way that horse racing could succeed in New York, or ultimately New Jersey, without it being subsidized by another form of gambling.”

Until recently, Mr. Gural’s day job was running a major commercial real estate company, Newmark Grubb Knight Frank, and overseeing a family portfolio of about 40 buildings.

A few years ago, he sold the family firm, although he remains at Newmark as chairman.

His love of horses and horse racing began in high school, growing up in Woodmere, on Long Island, about a half-mile from Roosevelt Raceway, a now defunct harness track. “We’d go for the last race at night — it was free,” he said. “We’d bet one race and go home.”
Jeff Gural, the New York real estate tycoon, had cleaned up well.

The shaggy, steel-gray beard was gone. The customary khakis had given way to a blue suit. As he sat on a dais on Thursday at the Meadowlands Racetrack he has operated in East Rutherford, N.J., for over two years, a smile spread across his face.

A dozen elected officials were in the room to endorse putting a referendum before voters this fall to expand gambling to northern New Jersey and to support Mr. Gural’s vision for a $1 billion casino at the racetrack. In a surprise, Vincent Prieto, a Democrat who is the State Assembly speaker, also showed up to express his support.

Though he was not at the event, Gov. Chris Christie, a Republican who had once been cool to the idea, has also become a proponent of a casino in the northern part of the state.

RELATED COVERAGE

As Casinos Close in Atlantic City, a Push for More, Closer to New YorkAUG. 18, 2014
Building allies among elected officials and capitalizing on a growing momentum to expand gambling in New Jersey, Mr. Gural is seeking to edge closer to what has long been a tantalizing goal: a gambling site just a few miles from New York City.

Photo

A rendering of the Hard Rock International, a casino proposed for the Meadowlands Racetrack. Credit Zimmerman Architects
His pitch: With over 14 million adults within 50 miles of the racetrack, Mr. Gural and his partner, the Hard Rock, estimate that their proposed Hard Rock Casino could generate $400 million a year in tax revenues; half of that would go toward reviving Atlantic City, where four casinos closed last year.

“It’s a spectacular project,” Mr. Gural said.

It must still overcome opposition from Atlantic City and lawmakers in South Jersey and win a statewide referendum. But the battle over the future of gambling in New Jersey has placed Mr. Gural, 73, at the nexus of a fierce tristate gambling war in which Pennsylvania casinos have sucked the life out of Atlantic City; the only casino in New York City is a runaway success; and a $1 billion casino resort in the Catskills is being built to grab patrons from North Jersey as well as New York and Pennsylvania.

Mr. Gural has essentially sat down at the regional blackjack table to play three simultaneous hands. Not only is he bidding for a casino at the Meadowlands Racetrack, seven miles west of Manhattan, but he will also soon submit a bid for a full-scale casino in Nichols, N.Y., near the northern border of Pennsylvania.

Then there is his pat hand: Mr. Gural and his partners own the land underneath the Sands Casino Resort in Bethlehem, one of Pennsylvania’s most successful casinos.

And he does not even like casino gambling.

It is really all about his lifelong love of horses, he said.

“Saving the horse industry is just as important as saving Atlantic City,” said Mr. Gural, who owns farms in Stanfordville, N.Y., and Litchfield, Pa., where he raises as many as 80 Standardbred horses. “There was no way that horse racing could succeed in New York, or ultimately New Jersey, without it being subsidized by another form of gambling.”

Until recently, Mr. Gural’s day job was running a major commercial real estate company, Newmark Grubb Knight Frank, and overseeing a family portfolio of about 40 buildings.

A few years ago, he sold the family firm, although he remains at Newmark as chairman.

His love of horses and horse racing began in high school, growing up in Woodmere, on Long Island, about a half-mile from Roosevelt Raceway, a now defunct harness track. “We’d go for the last race at night — it was free,” he said. “We’d bet one race and go home.”

Mr. Gural worked with his father, Aaron, in the real estate business. In 1978, he and his friend Barry M. Gosin, Newmark’s chief executive, bought out Mr. Gural’s father.

Mr. Gural, who lives in the El Dorado on the Upper West Side of Manhattan, earned a reputation as a rare liberal Democrat in the real estate industry and as a “soft touch” for charities.

“He’s a mark for any charity, if it’s a worthwhile cause,” Mr. Gosin said. “He likes money to pay the bills, but he’s never been motivated by money.”

After New York State started allowing racetracks to install electronic slot machines, Mr. Gural bought and reopened two bankrupt harness tracks — Tioga Downs and Vernon Downs in central New York, both of which have slot machines. Mr. Gural said the tracks employed hundreds of people in one of the most depressed parts of the state and had generated over $300 million for public education.

In 2012, Mr. Gural signed a deal with Governor Christie to operate the Meadowlands Racetrack, after the state decided to cease subsidizing the state-owned complex, a victim of the decline in the popularity of horse racing.

He lined up partners — Hard Rock owns a one-sixth stake — and built a $120 million grandstand.

Judging from a recent Saturday night, the Meadowlands, which features a large sports bar and several restaurants, attracts younger patrons than can be found at Aqueduct Racetrack in Queens, whose slot-machine parlor has been hugely successful.

But if Mr. Gural is not motivated by money, he also does not want to preside over failing tracks in New York and New Jersey. The betting was that the slot parlors at New York tracks and the Meadowlands would eventually house full-scale casinos.

“I would not have done the Meadowlands if I didn’t think — it’s common sense — that there’d be a casino,” he said.

But until recently, Governor Christie preferred to focus on reviving Atlantic City, where gambling revenues have fallen by half from their $5.2 billion peak in 2006. Alex Bumazhny, a casino analyst at Fitch Ratings, predicts at least two more of the eight remaining casinos there will close.

The problem for the gambling industry is that there are too many casinos chasing too few gamblers — the Northeast, in particular, is considered saturated, with more casinos on the way.

Still, Mr. Bumazhny is far more optimistic about the prospects for a casino in the Meadowlands, or in Jersey City, where a businessman, Paul Fireman, has proposed a $4 billion casino resort with a 95-story tower and 14 restaurants next to a golf course he owns.

“It’s probably one of the better locations in the United States,” he said.

In an attempt to woo support from Atlantic City and South Jersey, Mr. Gural has proposed a 55 percent tax rate on gambling revenues from the proposed Meadowlands project, half of which would be funneled to noncasino projects in Atlantic City. Governor Christie now favors casinos in North Jersey as long as new tax revenues are used to help Atlantic City.

Mr. Gural, Mr. Fireman, the governor and many North Jersey politicians and business leaders are pressing for a referendum on gambling in North Jersey this November. To make that happen, the Legislature must vote on scheduling a referendum before Aug. 3.

But that prospect faces a difficult hurdle: Stephen M. Sweeney, the president of the State Senate who is from South Jersey. Senator Sweeney, a Democrat and a probable candidate for governor, has tried to walk a fine line, saying a casino question should be put off until 2016 when there would be higher voter turnout.

That, however, would put it in the middle of a presidential campaign, when it would be harder and far more expensive to promote an expanded gambling message to voters, Mr. Gural said. He added that he and James Allen, the chairman of Hard Rock, were ready to spend as much as $20 million on an advertising campaign.

“This is not a fight between North Jersey and South Jersey,” Mr. Gural said. “This is about what’s good for the state of New Jersey.”

A version of this article appears in print on June 6, 2015, on page A14 of the New York edition with the headline: Real Estate Magnate Pushes for a Casino in North Jersey. Order Reprints| Today’s Paper|Subscribe

Plans For New Hard Rock Casino At Meadowlands To Be Unveiled

 

EAST RUTHERFORD, N.J. (CBSNewYork/AP) —Hard Rock International and the Meadowlands Racetrack are unveiling plans for a new casino just outside New York City.

Jeff Gural, owner of Meadowlands Racetrack, expects to see concerts, horse racing, live table games and slot machines at the new facility.

“The whole works,” as he put it.

Gural, who will unveil the plans Wednesday along with the chairman of Hard Rock International, said the project would bring more than 10,000 jobs to the area and generate more than $400 million in yearly revenue — some of which would go towards helping the struggling Atlantic City, CBS2’s Andrea Grymes reported.

“It would be good for everybody; it would create jobs, not only in the casino industry, it would help Atlantic City recover and it would have an extra couple hundred million dollars, hopefully,” Gural said.

Experts say the casino could be one of the most successful in the country, but Atlantic City fears it could put it out of business.

Atlantic City has opposed every attempt to even consider legislation expanding casino gambling beyond its borders. Last year four of the city’s 12 casinos shut down, and gambling revenue has been falling steadily for eight years, even without in-state competition.

New Jersey’s Constitution would need to be amended for it to become reality and lawmakers are taking steps to put the issue before voters in November.

Many who live near the Meadowlands said they have big concerns.

“Traffic, a gambling element that isn’t suitable for this area,” one resident told Grymes.

“We get nothing out of it and it’s too crowded here anyway,” another resident said.

Still, others believe a casino would be a big boost to East Rutherford and surrounding communities.

‘I think it’s gonna be good for business and it’s gonna bring more people to the area,” resident Catherine Spinella said.

“I think it’ll bring jobs to northern Jersey, which will hopefully alleviate some of the tax burden,” another resident said.

To encourage the passage of the state constitutional amendment, Gural has agreed to pay a 55 percent tax rate.

 

Jersey City Ordinance Proposes Chain Store Prohibition

Posted in Commercial, Retail & Industrial Real Estate, Real Estate

Various sources, including NJBiz, have reported that Mayor Fulop and Jersey City are pushing forward an ordinance largely prohibiting chain businesses, i.e., any business that has 10 or more locations within 300 miles from the City. If challenged, will the ordinance pass legal muster? Arguably not.

Generally land use ordinances must advance the purposes of zoning. Anti-competitive ordinances have historically and repeatedly been stricken by the Courts in New Jersey, for instance, distance regulations between competing businesses (e.g., a zoning ordinance that would purport to require at least 1500 feet between fast food restaurants or other uses otherwise permitted in the zoning district). Thus, in this instance, a chain located on the West Coast, such as In-N-Out Burger (whom ironically said it would not expand to the East Coast due to supply chain challenges) could locate in Jersey City, but Macy’s, Starbucks, Dunkin Donuts, Home Depot, and numerous other well-known chains would be prohibited from opening in most of Jersey City (excepting some areas of the waterfront).

Mayor Fulop asserts that the restrictions will keep the City “livable and desirable” and allow the City to “reflect diversity and spur creativity.” If challenged, the City and Mayor will have to convince the court that these considerations are valid land use objectives advancing the purposes of zoning. Cities such as San Francisco, California, and Nantucket Massachusetts, have enacted similar ordinances, but the authority for the Jersey City ordinance must pass muster under New Jersey’s Municipal Land Use Law, N.J.S.A. 40:55D-1 et seq., in order to survive a challenge.

This is definitely an issue we’re going to keep an eye on and will continue to update you as it develops.jersey-city

February Pending Home Sales Beat

Posted in Economics, Employment, Housing Recovery, National Real Estate | 83 Comments

From CNBC:

Pending home sales rose 3.1% in February

Colder than average temperatures and heavy snow in much of the U.S. failed to keep February home buyers away. Signed contracts to buy existing homes rose 3.1 percent from January, according to the National Association of Realtors (NAR).

The Realtors’ so-called “Pending Home Sales Index” is 12 percent higher than one year ago, and is at its highest level since June, 2013.

The gains were primarily driven by sales in the West and Midwest. Pending sales jumped 11.6 percent month-to-month in the Midwest and are now 13.8 percent higher than a year ago. Sales in the Northeast fell 2.3 percent but are 4.1 percent above a year ago. Sales in the South decreased 1.4 percent sequentially, but are 10.8 percent above last February. Sales in the West climbed 6.6 percent and are now 18.3 percent above a year ago.

“Pending sales showed solid gains last month, driven by a steadily-improving labor market, mortgage rates hovering around 4 percent and the likelihood of more renters looking to hedge against increasing rents,” said Lawrence Yun, chief economist for the NAR. “These factors bode well for the prospect of an uptick in sales in coming months. However, the underlying obstacle—especially for first-time buyers—continues to be the depressed level of homes available for sale.”

Why NYC remains at the top

Posted on by grim

Posted in Demographics, Economics, Employment, NYC | 65 Comments

From the Atlantic:

The Feedback Loop That Will Make America’s Richest Cities Even Richer

This week, the Brookings Institution came out with a report on “job proximity”—that is, which cities have the largest and fastest-growing concentrations of jobs in their city centers. This is an important statistic, because people who live closer to work are more likely to be employed. It’s particularly important for poorer workers who cannot afford longer commutes.

The key finding of the study was that people and jobs moved to the suburbs in the 2000s, and the number of jobs near the typical resident fell by 7 percent. This is in keeping with Trulia data that has found that most moves—both within counties (two-thirds of all moves) and between counties—are toward lower density and cheaper housing.

Even in a decade when retail gasoline prices tripled, people and work didn’t move closer together. Americans are spacing out.

But another story emerges when you look at the cities with the highest job density and who is moving there. When Elizabeth Kneebone and Natalie Holmes used Census tracts to determine the places with the greatest job proximity, these cities topped the list:

(see link)

Anybody who spends their free time looking at ordinal lists of American cities will notice that this is a pretty familiar set. It’s almost exactly the list of the most populous U.S. metro areas (for methodological reasons, the Brookings study could not include Boston or any other cities in Massachusetts). It’s almost exactly the list of the large U.S. cities with the highest median incomes. And the highest density of college grads. And the highest share of foreign-born residents among young people.

And, perhaps most importantly for the immediate future, it’s almost exactly the list of cities where college grads have been moving since the recession began.

This is a tight feedback loop. The densest cities tend to be the most educated cities, which are also the richest cities, and often the biggest cities. They’re gobbling up a disproportionate share of college grads. And, as a result, they are becoming richer, denser, and more educated.

This feedback loop goes by many impressively multisyllabic names—geographic sorting, economic agglomeration, cumulative advantage. But they’re all fancy ways to describe something simple. Even as older and less educated Americans are moving to the suburbs, young people with college degrees are moving toward density, and their migratory patterns are encouraging future young people to follow in their steps.

But many cities that don’t already appear at the top of these degrees-and-density lists are fighting migratory currents that are pulling more of the most talented young people to the same small set of cities. “At the same time that American communities are desegregating, racially, they are becoming more segregated in terms of schooling and earnings,” Enrico Moretti wrote in his book The Geography of Jobs. In other words, today’s richest cities might not mimic the collapses suffered by the richest U.S. cities from the 1970s. “The knowledge economy has an inherent tendency toward geographical agglomeration,” he wrote. “Initial advantages matter, and the future depends heavily on the past.”

National foreclosures nearing 10 year low

National foreclosures nearing 10 year low

Posted in Foreclosures, Housing Recovery, National Real Estate | 69 Comments

From Marketwatch:

U.S. Foreclosure Activity Down 4 Percent in February to Lowest Level Since July 2006 Despite 9 Percent Rise in REOs

Realtytrac today released its U.S. Foreclosure Market Report(TM) for February 2015, which shows foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 101,938 U.S. properties in February, a decrease of 4 percent from revised January numbers and down 9 percent from a year ago to the lowest level since July 2006. The report also shows a U.S. foreclosure rate of one in every 1,295 housing units with a foreclosure filing in February.

“Given that August 2006 was the peak of the housing bubble, this eight-and-a-half year low in foreclosure activity is a significant milestone and a sign that nationwide foreclosure activity is on track to return to historic norms this year — and is possibly even headed below historic norms given the skinny-jeans-tight lending standards over the past five years,” said Daren Blomquist, vice president at RealtyTrac. “In markets where foreclosures were processed more efficiently we are seeing foreclosure numbers now below pre-crisis levels in some cases. Conversely, the cleanup of deferred distress is continuing in markets where a logjam of in-limbo foreclosures is still lingering from the housing crisis — as evidenced by rebounding foreclosure activity in those markets.”

Despite the national decrease from a year ago, 24 states posted a year-over-year increase in overall foreclosure activity, including Massachusetts (up 53 percent; fifth consecutive month with an increase) and New York (up 19 percent; sixth consecutive month with an increase).

Despite the national decrease in foreclosure starts, 23 states posted year-over-year increases in foreclosure starts, including Nevada (up 153 percent; fourth consecutive month with an increase), Massachusetts (up 116 percent; 11th consecutive month with an increase), and Texas (up 5 percent; five out of last six months with increase).

25 states post annual increase in scheduled foreclosure auctions

Nationwide, 45,880 properties were scheduled for a future foreclosure auction in February, down 13 percent from revised January numbers and down 4 percent from a year ago to the lowest level since July 2006.

Despite the national decrease in scheduled foreclosure auctions — which can act as the foreclosure start in some states — 25 states posted a year-over-year increase in scheduled foreclosure auctions, including New York (up 146 percent; ninth consecutive month with an increase), Massachusetts (up 88 percent; third consecutive month with an increase), New Jersey (up 38 percent; 15th consecutive month with an increase), and Washington (up 17 percent; five out of last seven months with an increase).

Maryland, Nevada, Florida post highest state foreclosure rates

Other states with foreclosure rates among the top 10 highest nationwide in February were Indiana (one in every 871 housing units with a foreclosure filing), Idaho (one in every 877 housing units), New Jersey (one in every 895 housing units), Illinois (one in every 906 housing units), Delaware (one in every 957 housing units), Ohio (one in every 1,000 housing units), and North Carolina (one in every 1,088 housing units).

U.S. regained top spot in Real Estate investment

Back in the New York groove

Posted in Demographics, Employment, NYC, National Real Estate | 39 Comments

From the WSJ:

U.S. Regained Top Spot for Real Estate Investment in 2014

We’re number one – again!

For the first time since 2009, the U.S. was the top destination for capital going into real estate markets, according to Cushman & Wakefield’s annual report, leapfrogging over China. But it came as the global market actually got smaller, not bigger.

The market-share gains in the U.S. came more because of a drop in investment in land in China, the firm said, which led to a 6.4% drop in global real-estate investments to $1.21 trillion. “This decline in activity can be solely attributed to a drop in Chinese land purchasing,” the firm wrote. The report was released at the annual real-estate conference sponsored by MIPIM.

New York City was the top destination, followed by L.A., San Francisco, Washington, D.C., Chicago, and Boston. Globally, New York was still number one, followed by London, Tokyo, L.A., and San Francisco. In a nod to the youngsters, the survey found that the top markets offering “the right live/work/play environment” for millennials were Nashville, Brooklyn, Portland, and Memphis.

For 2015, the firm projects the global real-estate market will rise 11%, to $1.34 trillion, with the largest gains coming in central and eastern Europe (30%), followed by western Europe (19%), and North America (15%). But the report was cautious about the current year. “While growth may be better, it will be volatile and divergent market by market.”

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