From the Daily Record:
Do we really love home rule?
A recent poll says residents are not as enamored with their home towns as some think.
A Quinnipiac University poll asked residents if they would support merging school districts and municipalities to lower property towns. Some 73 percent said yes. Only 22 percent said no.
That response does not surprise us. Of course, a majority of New Jersey residents probably would agree to just about anything if the offer was accompanied by the words, “reducing property taxes.”
Notwithstanding, the results are interesting.
It is true that merging some towns and school districts is not going to solve the state’s property tax crisis. No one should think that. But merging jurisdictions and eliminating high-paid public jobs, and the benefits that go with them, would help.
Most of those who like home rule are those doing the ruling. That is why we do not see mergers.
Just about every recent governor has talked about reducing the more than 1,100 combined school districts and municipalities in New Jersey, but the talk does not go very far.
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The record is clear. With rare exception, towns are not going to combine themselves. (One exception may be the Chesters in Morris County where a merger is being considered.) Before that, the last municipality to voluntarily “go out of business” was Pahaquarry in Warren County. The town had fewer than 50 full-time residents and most of it was parkland.
From the NYT:
U.S. Will Push Mortgage Firms to Reduce More Loan Payments
The Obama administration on Monday plans to announce a campaign to pressure mortgage companies to reduce payments for many more troubled homeowners, as evidence mounts that a $75 billion taxpayer-financed effort aimed at stemming foreclosures is foundering.
“The banks are not doing a good enough job,” Michael S. Barr, Treasury’s assistant secretary for financial institutions, said in an interview Friday. “Some of the firms ought to be embarrassed, and they will be.”
Even as lenders have in recent months accelerated the pace at which they are reducing mortgage payments for borrowers, a vast majority of loans modified through the program remain in a trial stage lasting up to five months, and only a tiny fraction have been made permanent.
Mr. Barr said the government would try to use shame as a corrective, publicly naming those institutions that move too slowly to permanently lower mortgage payments. The Treasury Department also will wait until reductions are permanent before paying cash incentives that it promised to mortgage companies that lower loan payments.
“They’re not getting a penny from the federal government until they move forward,” Mr. Barr said.
From the Press of Atlantic City:
Sheriff’s sales increase as housing bust continues
Larry Notch may have the most difficult job at the Cape May County Sheriff’s Office.
The veteran investigator is in charge of serving court papers on homeowners who are so far in debt that they are at risk of losing their homes. And when all efforts fail to raise money or renegotiate a loan, Notch is the one who must evict the former homeowners and their possessions.
Lately, he has been busier than ever.
“Can you imagine being in a home most of your life and having to leave because you got caught up in this situation?” he asked.
Cape May County, with its thousands of resort properties, was in some ways insulated from the national mortgage crisis as investors waited in hopes of a quick market rebound. But like the rest of the nation before it, Cape May County is seeing a rise in foreclosures now.
The county auctioned 280 properties last year, double the number in 2006 during the flush real estate market boom. So far this year, the county has sold 287, with five weeks to go.
The same phenomenon was seen across the region.
Cumberland County has seen 453 sheriff sales so far this year.
Ocean County has tallied 553 sales so far compared with 518 last year and 99 during the peak of the last real estate market boom in 2005.
“We’re finding when we go to houses to post them, the owners have already walked out — just given up,” Ocean County Undersheriff Wayne Rupert said. “I think next year is going to be at least as bad as this year and maybe worse. It’s a shame, but these things are happening all over.”
This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.
For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.
From the Star Ledger:
N.J. budget deficit grows to $1B for current fiscal year
The state today said it is facing a $1 billion hole in this year’s budget — a shortfall five times bigger than previously disclosed — and will cut funding for schools, municipalities, higher education, hospitals and pension plans to help close the gap.
A Treasury spokesman said the state collected $412 million less in taxes than expected through October.
“It is going to be a gut-wrenching experience,” said Bill Dressel, executive director of the New Jersey League of Municipalities.
The crunch has already led to a disagreement with Gov.-elect Chris Christie, who has called for spending freezes. On Tuesday, Corzine and Christie clashed over emergency funding for food banks and soup kitchens.
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That revelation is the latest budget problem facing New Jersey as it grapples with fallout from the deepest economic downturn since the Great Depression. Two days after he lost the election, Gov. Jon Corzine said the state needed to find $400 million in savings to cover shortfalls that included $190 million in anticipated taxes that did not materialize.
In addition, the state already will start off next fiscal year’s budgeting process with an $8 billion hole, according to a report from a nonpartisan legislative office.
The depth of the state’s current $1 billion shortfall was not revealed until today, when it was included in a required statement sent to Wall Street bond investors. It means officials now have to tell people who were expecting money they will not be getting it.
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It is the second straight year the state has been forced to make mid-year budget adjustments to deal with revenue shortfalls in the billions.
From the APP:
N.J. budget deficit could reach $1.5 billion
New Jersey’s budget problem worsened in October, with a $222 million shortfall that exceeded its deficit in tax collections from July, August and September combined.
In a prospectus sent Wednesday to prospective bondholders, the state says its deficit could be $1 billion. It said that could be closed in part through “up to $400 million actions affecting major cost centers, including: school aid, municipal aid, higher education, hospitals and the state contribution to the pension plans.”
However, the 5.1 percent, $412.7 million year-to-date tax shortfall would, if maintained over the course of the next eight months, leave collections almost $1.5 billion behind budget.
Odds are it won’t, as tax collections fluctuate. Sales tax revenues are greatly influenced by the Christmas shopping season; income taxes could see a bump from Wall Street bonuses, but that won’t be known until April and May.
From New Jersey Newsroom:
As N.J. budget shortfall grows, local, school aid at risk
With the deficit for the current 2010-11 state budget growing toward $1 billion, the outgoing Corzine administration could be forced to cut aid to cities, towns, schools, and hospitals as well as state contributions to public employee pension plans.
The grim outlook became public Wednesday in a state report sent to Wall street bond investors.
“Largely due to continuing revenue shortfalls and the need for supplemental appropriations, the projected deficit by the close of the current fiscal year (June 30) is now estimated at $1 billion,’’ said Sen. Barbara Buono, chairman of the Senate Budget and Appropriations Committee. “Obviously, many worthy and deserving programs that are in need of state funding will have to make do without it. We have no choice – there simply isn’t enough money to sustain our current state budget, let alone any additional spending proposals.’’
From the NY Times:
Industrial Real Estate, a New Jersey Bulwark, Shows Some Cracks
Over the years, as the real estate markets for offices, residences and stores in New Jersey have gone through peaks and valleys, the market for industrial real estate has been like the buildings themselves — not flashy, but big, solid and reliable.
No longer. The tenor of third-quarter market reports about the warehouse sector has ranged from unhappy to abysmal.
One big commercial real estate services concern, CB Richard Ellis, reported, for instance, that 11.7 percent of the state’s industrial property was available for either purchase or lease as of Sept. 30. That was the highest rate it has recorded since 1992 and a 32 percent rise in 12 months.
Another company, Cushman & Wakefield, uses somewhat different parameters in its calculations, but said it agreed with the “thrust and reasoning” of CBRE’s report. Its measure of the vacancy rate for warehouses and distribution centers was 8.8 percent as of Sept. 30.
Furthermore, industrial specialists said that asking rents were plummeting statewide, and that in many submarkets, effective rents were the lowest in a decade.
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“Staggering,” Mr. Knee said. “I haven’t seen it in all my 21 years in the business.”
From the NY Times:
Northeast Home Sales Soar 25 Percent in October
ome sales in the Northeast soared in October as first-time buyers clamored to close deals before the expiration of a federal tax credit.
The nine-state region registered 85,000 home resales last month, up 25 percent from a year ago when the financial crisis gripped the country, the National Association of Realtors said Monday. The median price, however, fell about 3 percent to $235,400.
Nationally, sales of existing homes jumped almost 21 percent from October last year, without adjusting for seasonal factors. The median sales price tumbled 7 percent to $173,100.
The surge in sales came as many first-time homebuyers rushed to qualify for an $8,000 tax credit that was scheduled to expire at the end of this month before Congress extended it through April.
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”The only reason we’re seeing good numbers is because of government policies that are propping the market up,” said Patrick Newport, an economist with IHS Global Insight. ”Housing is still fundamentally weak.”
All nine major Northeast cities tracked in the Associated Press-Re/Max Monthly Housing Report showed annual increases in home sales last month. The report, also released Monday, analyzed sales transactions in the metropolitan statistical areas recorded by all real estate agents, regardless of company affiliation.
Here are some highlights from the region:
–Biggest sales gain: Trenton, N.J., saw sales climb by 45 percent from a year ago. Prices there continue to fall, tumbling 11 percent year-over-year to $231,500.
Lower-priced homes between $150,000 to $350,000, are leading the brisk sales, said T. Christopher Hill, an agent with Re/Max TriCounty in Hamilton Township, N.J., thanks in large part to the first-time homebuyer tax credit.
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As for November? Hill predicts a strong sales month, but the numbers won’t be as high as September and October.
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– Smallest sales gain: Sales in the New York City suburbs increased 5 percent in October, while the median price lost 3 percent to $385,000.
Despite lagging in the region, the performance was a step up for the area which has been battered by job losses in the financial sector.
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–Biggest price gain: For October, Pittsburgh prices inched up 2 percent from a year ago to $118,000, the only price increase in the region. Sales there rose almost 11 percent.
”We weren’t invited to the party, so we don’t have a hangover,” said Dan Kite of Northwood Realty Services, explaining the relative stability of Pittsburgh’s home prices.
From Bloomberg:
Sales of Existing U.S. Homes Probably Rose to a Two-Year High
Sales of existing U.S. homes probably increased in October to the highest level in more than two years, spurred in part by a tax credit that lured first-time buyers, economists said before a report today.
Purchases rose 2.3 percent to a 5.7 million annual rate, according to the median forecast of 60 economists surveyed by Bloomberg News. The expected increase from September’s 5.57 million pace would be the sixth in the past seven months.
Cheaper homes and stimulus such as the $8,000 homebuyer tax credit, extended and expanded by the Obama administration this month, have revived an ailing housing market that contributed to the worst economic slump since the Great Depression. Further improvement that would aid the economy’s recovery depends on an easing in unemployment and foreclosures.
“We are making progress in housing,” said Michael Moran, chief economist at Daiwa Securities America Inc. in New York. “Inventories are getting under control due to the pickup in sales. It’s not going to be a vigorous recovery but it’ll contribute to growth.”
The National Association of Realtors’ report is due at 10 a.m. in Washington. Bloomberg survey estimates ranged from 5.2 million to 6 million. Resales fell to a 4.49 million pace in January, the lowest level since comparable records began in 1999.
This is the time and place to post observations about your local areas, comments on news stories or the New Jersey housing market, open house reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let’s have them. Also a good place to post suggestions, requests for information, criticism, and praise.
For readers that have never commented, there is a link at the top of each message that is typically labelled “[#] Comments“. Go ahead and give that a click, you might be missing out on a world of information you didn’t know about. While you are there, introduce yourselves to everyone.
For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past year. The archives can be accessed by using the links found in the menus on the right hand side of the page.
From the Record:
N.J. troubled mortgages grow to 14.5%
As unemployed homeowners struggled to pay their mortgages, the percentage of New Jersey loans in foreclosure or at least a month behind on payments hit 14.5 percent in the third quarter, the Mortgage Bankers Association said Thursday.
That means that almost one of every seven mortgages in the state was in trouble. The nationwide percentage of delinquent or foreclosed mortgages was a record 14.4 percent, up from 10 percent a year earlier.
The rise in unemployment is the main driver behind the rise in foreclosures, according to Jay Brinkmann, the mortgage bankers’ chief economists. Despite the apparent end to the recession, unemployment is running at the highest level in decades — 9.7 percent in New Jersey and 10.2 percent nationwide in October.
“Mortgages are paid with paychecks,” Brinkmann said. As the number of unemployed people jumped by about 5.5 million over the past year, two million mortgages fell into serious delinquency, he said.
And he said mortgage delinquency rates and foreclosures “will continue to worsen before they improve,” because hiring is not expected to pick up until the first or second quarter of 2010.
While subprime mortgages remain the most distressed sector of the market, the number of new delinquencies is growing faster among prime mortgages, which were taken out by qualified borrowers. Those prime borrowers tend to have more savings to support themselves during unemployment, Brinkmann said. But if they are out of work for a long period, eventually even they find it difficult to hang on to their homes.
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New Jersey ranked fifth, right behind those states, in the percentage of loans in some stage of the foreclosure process during the third quarter. With home values down about 20 percent from their peak in the region, many homeowners who lost their jobs and fell behind on mortgage payments couldn’t just sell their houses without taking a loss.
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“We’re seeing people with exploding mortgages that have just started to explode,” Salowe-Kaye said.
From the Star Ledger:
Economic Indicators point to an uneven housing recovery
As the New Jersey real estate market tries to get its footing back, more evidence was released this week showing the terrain is uneven.
New home building in the Northeast hit the skids last month, but at the same time fewer New Jersey homeowners received foreclosure notices, according to the latest state and federal statistics.
Construction of new homes in the region fell 18.8 percent in October to a seasonally adjusted annual rate of 56,000 from 69,000 in September — the biggest percentage drop in the country, according to the Commerce Department. That included a nearly 10 percent decline in single-family homes.
Meanwhile, for the first time this year, the number of residential foreclosure filings was actually lower than the same period in 2008, according to the state judiciary.
Lenders started 4,991 foreclosure proceedings against New Jersey homeowners in October, down from 5,262 during the same month last year.
The state is retreating from a foreclosure filings high in June, when 6,138 foreclosure notices were recorded.
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More than 2,600 New Jerseyans have received counseling through the state’s Foreclosure Mediation Program, Gov. Jon Corzine said earlier this fall. About 1,450 cases have been completed, and roughly half of the homeowners were able to stay in their homes.
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In New Jersey, foreclosure filings from September to October in Cumberland and Warren counties increased by the widest margins — 8.75 percent and 11.29 percent, respectively, while filings in Hunterdon and Passaic counties decreased the most — 32.1 percent and 27.5 percent, respectively.
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Unemployment is the main reason homeowners are falling behind, said Joseph Seneca, a professor of economics at Rutgers University’s Edward J. Bloustein School of Planning and Public Policy. While the economy is likely out of recession, the state’s unemployment rate is now only starting to retreat from a record 26-year-high of 9.8 percent. The state’s jobless rate for October was 9.7 percent.
“Looking forward, it’s hard to pull the trigger on any big purchases, such as homes,” Seneca said of the housing climate in the state.
From the WSJ:
Mortgage-Delinquency Rate Rose to New High in 3rd Quarter
Mortgage delinquencies rose for the 11th straight time to a new high in the third quarter, although the rate of increase again relaxed a bit, credit information company TransUnion reported Tuesday.
“Until the housing market can consistently demonstrate several months of home value appreciation and the unemployment rate improves, mortgage delinquency will likely continue to rise,” said F.J. Guarrera, vice president of TransUnion’s financial services division.
Mortgage loan delinquency, or the ratio or borrowers 60 or more days past due, rose to 6.25% in the third quarter from 3.96% a year earlier and 5.81% in the previous quarter. While still increasing, the rate of growth sequentially decelerated for the third time in a row.
From HousingWire:
TransUnion Sees Delinquency Rise for 11 Quarters
Mortgage loan delinquency rose for the 11th straight quarter in Q309, according to market research by credit bureau TransUnion.
Overall mortgage delinquency of 60 or more days reached a record 6.25% in TransUnion’s ongoing study of a random selection of 27m credit files from its national consumer database. The rate is up from 5.81% in Q209 and is expected by the credit bureau to come in just under 7% by year-end 2009.
Despite the rising trend, TransUnion saw a bit of positive news in that the rate of increasing delinquency narrowed in Q309, marking the third consecutive quarter of deceleration.
“While it continues to be a positive sign that the increase in mortgage borrower delinquency rates has slowed for three consecutive quarters, we have to keep things in perspective,” said FJ Guarrera, vice president of TransUnion’s financial services division. “Delinquency rates are rising and expected to peak at record levels.”
From the Morning Call:
Mortgage delinquencies rise in the Lehigh Valley
Mortgage delinquencies in the Lehigh Valley area continued to rise in the third quarter, indicating the weight of foreclosures on the local housing market is likely to keep growing, according to a new report released today.
For the three months ended Sept. 30, 4.5 percent of mortgages in the Lehigh Valley area defined as Lehigh, Northampton and Carbon counties and Warren County, N.J. were 60 or more days past due, according to the credit reporting agency TransUnion in Chicago. That’s up from 3.1 percent in the same quarter a year ago and up from 4.2 percent in the second quarter of this year.
Being two months behind is considered a first step toward foreclosure, because it’s so hard to catch up with payments at that point.
The local mortgage delinquency rate has been climbing since the first quarter of 2007, when only 1.8 percent of mortgages were 60 or more days delinquent, according to TransUnion.
From the WSJ:
Trump Abandons Casino-Control Bid
Donald Trump, whose name is synonymous with Atlantic City gambling, abandoned his bid to regain control of the three New Jersey casinos that bear his name.
He and his daughter Ivanka Trump reached a settlement with a group of creditors they were battling for control of Trump Entertainment Resorts, which filed for bankruptcy protection in February. Under the deal, the Trumps will drop a $116 million bid for the casinos they had been making with Beal Bank, the company’s largest secured lender.
The noteholders’ reorganization plan will still need to be approved by the bankruptcy court. A confirmation hearing is scheduled for January.
The Trump Organization, the family’s privately held company, could receive as much as a 10% stake in the reorganized company. In addition, the three Atlantic City casinos—the Trump Taj Mahal, Trump Plaza and Trump Marina—would continue to use the Trump name and the likenesses of Mr. Trump and his daughter in marketing efforts. And Mr. Trump would have the right to use his name in gaming operations outside the region that surrounds Atlantic City.
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Mr. Trump began developing casinos in the 1980s. This is the third time they were forced to seek bankruptcy protection. Mr. Trump held roughly a 30% stake in the company when it filed for Chapter 11 protection in February.
From the Record:
Passaic County jobless rate hit 11.7% in Sept.
Passaic County’s unemployment rate of 11.7 percent in September was the highest in New Jersey, and the second highest in the New York area, federal figures released Monday show.
The county lagged only Bronx County, with a rate of 13.3 percent, the U.S. Department of Labor said. Bergen County’s rate of 8.4 percent was 15th highest in the New York area, and eighth in the state. The figures are not seasonally adjusted.
The rates in both Bergen and Passaic counties have increased over the past year by more than the 3.4 percentage point increase in the national rate of 9.5 percent in September. New Jersey’s unadjusted rate that month was 9.6 percent.
September Unemployment Rate 2008/2009
Passaic 6.8 / 11.7
Hudson 6.7 / 11.6
Essex 6.9 / 11.1
Bergen 4.6 / 8.4
Union 5.9 / 9.8
Warren 5.0 / 8.8
Monmouth 4.9 / 8.7
Sussex 4.8 / 8.5
Somerset 4.2 / 7.9
Morris 4.1 / 7.6
Hunterdon 3.8 / 6.9
From the Daily Record:
Getting together in the Chesters?
A bit of New Jersey history has a chance to be made in Chester Borough and Chester Township. If all goes according to plan, residents in both towns will vote next November on becoming one. Both tonws would have to approve for a merger to take place. Meetings of a consolidation committee began earlier this year and the next one is set for Nov. 24 at Chester Borough Hall.
New Jersey has 566 municipalities, all with their own set of professionals and employees. The thinking is that one way to reduce property taxes is to reduce government. Incoming governor Chris Christie correctly has spoken of the need for towns to share services and to explore consolidation. But he stops short of threatening to mandate consolidations, which is something Trenton has had little appetite to do.
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Some may wonder why merging two small towns would be considered historical, as opposed to a no-brainer. The answer is that this is New Jersey, a place where so-called home rule is prized. Some voters have an emotional attachment to their town that is hard to dislodge.
Recent proof of that comes from Sussex County. Voters in Wantage and Sussex Borough were asked in this month’s election if the towns should become one. Sussex voters said yes, but Wantage residents were overwhelmingly opposed.
From the APP:
Forum to give status on potential consolidation of six school districts
Possible scenarios of what might happen if the neighboring school districts of Green Brook, Long Hill, North Plainfield, Warren, Watchung and Watchung Hills Regional High School consolidated will be the focus of a public meeting here Thursday.
The forum will be hosted by the township and presided over by Trudy Doyle, who as executive county superintendent established an advisory committee to study the issue as part of a state directive for municipalities to look at cutting school costs.
Gwen Thornton, a field representative from the New Jersey School Boards Association, will provide an overview of the cost-cutting initiative and an update.
From the Star Ledger:
Sussex Borough and Wantage: A tough sell on N.J. town mergers
In a leafy corner of the state, far from the epicenter of a nasty gubernatorial election, voters from the Sussex County towns of Sussex Borough and Wantage quietly mulled a merger of the two municipalities. And on Tuesday, by nearly a 3-to-1 margin, they said, “No thanks.”
The consolidation seemed to make sense: The towns already share three regional schools, a construction department and a court system and, served by the State Police, wouldn’t have to quibble over police. Plus, the towns had assets (land and utilities) to share. In an unsettling economy, when cutting property taxes is the driving political issue, this one seemed like a rural no-brainer.
“If it wasn’t going to happen here, I wonder if it’s going to happen anywhere,” said Sal Lagattuta, one of the proponents.
According to the Consolidation Study Commission report, the towns — if they merged — could have saved $585,000 in the first year. Future savings could have been greater with even more cost-cutting. That’s a nice chunk of change, but it wasn’t enough to persuade residents to erase a border — especially those in Sussex Borough, population 2,000.
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The average municipal tax bill in Wantage — home to 11,000 — would have shrunk only $57, business administrator James Doherty said. The average savings in Sussex Borough would have been approximately $400. Still not enough, it seems.