$1.3 Billion? Poof!

From the Daily Record:

Property values decline $1.3B in Morris County NJ over past year

The value of all taxable property in Morris County dropped $1.3 billion in the past year, after growing for most years in the past decade.

The county’s total value still is almost $102 billion but the 1.2 percent drop — which mirrors declining real estate values nationwide — means that local governments can no longer rely on an expanding ratable base to help fund budgets. Some are already cutting personnel and services.

The property value decline has been fueling tax appeals in some towns and meanwhile foreclosure actions continue to increase, with so many filed so far this year that Morris County’s hearing schedule for them already stretches into December.

For most of the 2000s, Morris County’s property values grew, spurred by job growth and a healthy housing market. Even after 2008, when Wall Street collapsed and the national economy soured, Morris County’s property values grew, adding a shade more than $1 billion in 2008 and about $500 million in 2009.

But now 30 of the county’s 39 towns have recorded drops in their 2010 net valuations — a measure of the value of all taxable property in a municipality.

New ratables are scarce as less land is available for new development: some has been preserved as open space and farmland and the state has implemented tighter rules about water use, septic systems, sewers, and building in watershed lands. In 2000, 3,163 building permits were approved. By 2007, the number had dropped to 908. In the first four months of 2010, Morris has seen 119 permit filings, the New Jersey Builders Association reported. If that rate continues for the year, there would be fewer that 500 permits sought for the year.

As home values sank the number of tax appeals jumped, from 800 in 2004 to 3,180 this year.

And, the number of home foreclosures increased, from 298 in 2004 to 468 in 2008, according to the county sheriff’s office records. In six months this year, the number of foreclosures hit 523, up 111 percent over the same period in 2009. The sheriff’s office schedule of foreclosure sales already reaches into December.

This entry was posted in Economics, New Jersey Real Estate, Property Taxes. Bookmark the permalink.

64 Responses to $1.3 Billion? Poof!

  1. Nomad says:

    1st

    Would be interesting to know what the aggregate household income is in Morris county for each of the last few years.

  2. frank says:

    Hoboken market is as hot as a 5th floor walk up in July.

    12UC this week.

    http://hudson.fnismls.com/publink/default.aspx?GUID=ae18df6b-b787-455c-87e1-1bed8a6a9fba&Report=Yes

  3. Confused in NJ says:

    And, the number of home foreclosures increased, from 298 in 2004 to 468 in 2008, according to the county sheriff’s office records. In six months this year, the number of foreclosures hit 523, up 111 percent over the same period in 2009. The sheriff’s office schedule of foreclosure sales already reaches into December

    Seems like the Revolutionary War was supposed to eliminate Kings stealing your property?

  4. Outofstater says:

    We just received a notice from the tax assessors (in Cobb County, Georgia) that our house is now worth 22% less than the previous assessment.

  5. Confused in NJ says:

    MAZAMA, Wash. – The U.S. Border Patrol is warning hikers on the Pacific Crest Trail they could face arrest, jail and a $5,000 fine if they cross the U.S.-Canadian border improperly.

    The Wenatchee World reports that the agency sent a letter last month urging the Pacific Crest Trail Association to warn hikers to only enter the U.S. at designated border crossings.

    The 2,650-mile trail stretches north from Mexico, crosses the U.S. border in the Pasayten Wilderness and continues for about nine miles to Manning Provincial Park in British Columbia.

    The nearest port of entry is 50 miles to the west, at Sumas, in Whatcom County, or more than 50 miles to the east, at Nighthawk or Oroville, Okanogan County.

  6. Nomad says:

    Back from a visit to the Garden State. Still seeing tear downs and big houses going up in there place. Maybe not as many, and not as big but still happening. Apparently some folks still have some big $$. Friend telling us their property taxes continue to jump significantly each year – many looking out 5-7 yrs when the kids are done with HS and thinking of leaving. I wonder at what point do property taxes get so high that homes become illiquid or is the area still one of the key places to go for employment so by default, people will always be going there to work and buy homes, etc.

  7. mob says:

    Town we live in is reevaluating house prices, last done in 2006. Initial numbers provided by town is decline of 4% a year. Don’t expect much if any drop in tax burden but it will at least bring listed value closer to what the house might actually sell for.

  8. yo'me says:

    Got my 3rd Qtr property tax bill on my 2nd house in EHT,up 9.3%.Still waiting for the main house.Where is the cap?

  9. Confused in NJ says:

    N.J. unemployment insurance fund lost $25M in fraudulent claims in last 2 years

  10. freedy says:

    25million for unemployment. Whats the problem? NJ is a welfare state, has been for years . just take a look at who’s walking around on the streets.

  11. Final Doom says:

    nomad (6)-

    Is that a cut-and-paste of a post made in 1999?

  12. Final Doom says:

    I can show you three towns within a 10-minute drive of my house where property taxes have rendered homes unsellable at almost any price.

  13. Final Doom says:

    310K price and 12K annual property taxes…perfect together.

  14. A.West says:

    Doom,
    Which towns?

    It’s amazing that while this is going on, (towns and government taxes making homes uninhabitable) folks like Sastry are wringing their hands worrying about the government not spending enough and someone not getting taxed enough. I guess they think that taxing the rich at 75% instead of 50% will solve all the problems.

  15. meter says:

    @13 –

    Exactly why I’m not buying. Taxes in Yardley/Newtown not a whole helluva lot better to be honest. Lower real estate taxes, but you are forced to pay a 1% tax on income to the municipality.

    Plus there are other disincentives tax-wise if you work in NYC and live in PA vs NJ.

    I’m left wondering if CT is any better. Probably not. We need to bring the VA model up to NJ – they have world class schools and pay less than half the taxes we do. Consolidate, consolidate, consolidate.

  16. Confused in NJ says:

    12.Final Doom says:
    July 5, 2010 at 11:24 am
    I can show you three towns within a 10-minute drive of my house where property taxes have rendered homes unsellable at almost any price

    Townhouse MLS 2841535 in Berkeley Heights is asking $399K, down from Zillow at $619K, originally. Why, try Taxes of $8532, with Common Fees of $7560 ($630/mo), for a total nut of $16,092 before mortgage. All for a 1987 2 bedroom townhouse.

  17. Mr Hyde says:

    Confused

    but but but my neigbhor just bought a new escalade and CNBC says we are at a historic bottom!?

  18. Final Doom says:

    west (14)-

    High Bridge, Hampton, Flemington

  19. Final Doom says:

    Fourth of July has passed, but I still want to drink and blow shit up.

  20. Final Doom says:

    “We see, then, in the very deliberate acts of envy and entitlement politics, the seeds of national collapse in Australia, the US, and Western Europe.”

    http://www.zerohedge.com/article/guest-post-new-civil-wars-within-west

  21. Mr Hyde says:

    I hope everyone got an extra day off and is enjoying it

    cheers

  22. jersey gal says:

    what do you people think about condos along hudson, in hoboken and jersey city?

    For example, AquaBlue, Hudson 77 and Trump look nice (In Trump would have to walk 10-15 mins to path, though) with swimming pools, rooftops and nice views. Most buildings have 20 year tax abatement so taxes can not be increased arbitrarily. Not sure how maintenance fees.

    Prices have come down maybe 20% from the peak. Some condos may lose the nice view as there are plans to build new condo towers nearby, though.

    I can’t comment on the building quality based on my brief visit. I still feel they are overpriced, but I have been waiting since 2003 for prices to come down. I’m starting to feel that unless Wall Street really goes down, perhaps due to massive terror attack in downtown Manhattan or due to absolute economic collapse, the prices may not go down significantly anymore.

    currently renting nice 1BR.

    any thoughts?

  23. blowboken says:

    http://www.nj.com/hobokennow/index.ssf/2010/07/hobokens_only_pet_store_hoboke.html

    In this tough economy, many businesses, even those with decades of history in a community like Christopher Colon’s Hoboken Fish & Pets, are finding they have no choice but to pack up shop.

  24. Final Doom says:

    gal (23)-

    Bet on absolute economic collapse.

  25. Shore love overpaying taxes Guy says:

    ” I guess they think that taxing the rich at 75% instead of 50% will solve all the problems.”

    It is time the rich step up to the plate and start paying their fair share. Since we like it when sports teams give “110%,” it only seems reasonable that the rich get taxed at that rate.

  26. nycchef says:

    meter,

    been wondering about CT myself…

  27. nycchef says:

    Not sure if it was kettle that asked for comments about the livability of some of the islands for a possible retirement home, but just came back from a cruise and thought that Roatan was a really nice place (island belonging to Honduras about 40 miles off it’s coast). Might be worth looking into.

  28. Yikes Limbaugh says:

    incidentally, 110% is also the share of votes in Hudson county elections

  29. jpasteurized says:

    23 –

    I drove past those brownstone-looking developments on the water’s edge last night. They’ve really spread like a rash these last few years, haven’t they? Nice to look at, I probably wouldn’t mind living there. But then I think about how I’d like scuba-diving off my lovely rooftop after the next one of these comes up the pike:

    http://en.wikipedia.org/wiki/New_England_Hurricane_of_1938

  30. Nomad says:

    #11 –

    Doom, nope it’s what my eyes showed me during my visit. One had to be a $2.5 M house and the other was north of 8k square feet. Must have been another half dozen. The sight amazed me but for the real wealthy, I guess this kind of purchase is chump change. I would not know though, I’m not one of them.

  31. Mr Hyde says:

    Nycchef

    thanks for the report, Shoreguy was the one looking for a home in the islands

  32. Juice Box says:

    Re: 23 gal – aqua blue is a rental way overpriced too, Trump labeled buildings are crap and way overpriced kind of like buying a Birkin bag only to wear it hooking on 37 st doing a 2 for one for a crisp Andrew Jackson to pay for it. If you hit the other way Trump will prob toss in a night with Ivanka to close the deal. Rent in Hoboken for a few years…..you will be better off.

  33. cobbler says:

    shore [26]
    If the return to the Americana of 1950s – that many dream about as the ideal society – is desired, to get the aftertax income distribution to where it had been the 1 mln+ incomes have to be taxed at a marginal rate of 75% or so… Sorry about that… Will not happen though, too many copies of Atlas Shrugged sold.

  34. cobbler says:

    confused [17]
    I am hard stressed to figure out what kind of maintenance one should be doing at the TH development at $650/mo per unit – which is on par with the property tax (OK, garbage is probably $50 – but what is another $600). Landscaping is rather nice there, so it is another $80/mo or so… No swimming pool or clubhouse as far as I know… Are the buildings falling apart?

  35. nj escapee says:

    too much angst in NJ. I’ll keep my less tan 1000 / month nut in Key West, thanks. even with the potential for tar balls :-)

  36. Final Doom says:

    cobbler (34)-

    Bullshit. All kinds of tax sheltering/avoidance stuff was legal then, so the rich ducked paying the full load.

  37. nj escapee says:

    Doom, come on down to the keys. We’ve got more than a few bottles of Creek here in Pirate country. You can watch the sh-t fall apart from afar.

  38. Jim says:

    More Bad news, http://www.nj.com/news/index.ssf/2010/07/us_economy_expands_at_slower_p.html

    Well at least the government was able to fudge unemployment numbers.

  39. House Whine says:

    39- I count up every month how many of those I know have been laid off. Sometimes, it’s offset by those I know who have since found a job. I don’t care what nonsense numbers the media reports- most people aren’t buying it anymore. I called a local employment agency last month just to get their take on things because I had dealt with them in the past. When I asked the owner if there was any pick-up in the pace of hiring he paused and told me, “Well, no, in fact we are in the midst of closing OUR doors after having been in business for 50 years”. So that kind of says it all.

  40. sas3 says:

    West, I think unemployment benefits should be extended while the millionaires tax rate should be reinstated. The other way round [cutting taxes on uber-rich while refusing to extend unemployment benefits] sounds cruel to me.

    S

  41. Confused in NJ says:

    35.cobbler says:
    July 5, 2010 at 4:45 pm
    confused [17]
    I am hard stressed to figure out what kind of maintenance one should be doing at the TH development at $650/mo per unit – which is on par with the property tax (OK, garbage is probably $50 – but what is another $600). Landscaping is rather nice there, so it is another $80/mo or so… No swimming pool or clubhouse as far as I know… Are the buildings falling apart

    Hard to say. We use to live at Whispering Way in BH, which were larger with two car garages, and it’s common fees are currently $350/mo. Insurance was one item that rose dramatically for smaller associations. Also, Corzine added 7% to Lawn Care & Snow Removal when he Sales taxed those services. Berkeley Meadows is also Cedar Sided Units which require more maintenace then Vinyl e.g. painting. But, one thing we found with Condo living is they tend to underfund Capital requirements as long as possible to keep Condo Fees artificially low, thereby kicking the can down the road and getting out before the SHTF. Berkeley Meadows may be actually contributing properly to their 1987 Capital Fund anticipating 25 year replacements after years of underfunding?

  42. chicagofinance says:

    Only buy inventory in the secondary market. Do not buy directly from seller….

    jersey gal says:
    July 5, 2010 at 1:16 pm
    what do you people think about condos along hudson, in hoboken and jersey city?

    For example, AquaBlue, Hudson 77 and Trump look nice (In Trump would have to walk 10-15 mins to path, though) with swimming pools, rooftops and nice views. Most buildings have 20 year tax abatement so taxes can not be increased arbitrarily. Not sure how maintenance fees.

    Prices have come down maybe 20% from the peak. Some condos may lose the nice view as there are plans to build new condo towers nearby, though.

    I can’t comment on the building quality based on my brief visit. I still feel they are overpriced, but I have been waiting since 2003 for prices to come down. I’m starting to feel that unless Wall Street really goes down, perhaps due to massive terror attack in downtown Manhattan or due to absolute economic collapse, the prices may not go down significantly anymore.

    currently renting nice 1BR.

    any thoughts?

  43. cobbler says:

    confused [42]
    7% sales tax on something that is ~$80/mo (lawn and snow) adds only $6. Thinking about what you’ve written, looks like the association suddenly decided they need to re-roof all the TH next year or so… But then, the fee should drop afterwards, there is not that much other exterior maintenance on a 25 yo building?

  44. cobbler says:

    doom [37]
    I am not saying the rich in the 1950s had been paying 75% tax. I meant that the before-tax income distribution had been much flatter than now (thus after-tax, too) and to get to such today higher margin rates would be needed. Again, idle talk, won’t happen – folks would rather live under the bridge or take a job guarding a fortified estate of some hedge fund manager.

  45. Confused in NJ says:

    44.cobbler says:
    July 5, 2010 at 7:15 pm
    confused [42]
    7% sales tax on something that is ~$80/mo (lawn and snow) adds only $6. Thinking about what you’ve written, looks like the association suddenly decided they need to re-roof all the TH next year or so… But then, the fee should drop afterwards, there is not that much other exterior maintenance on a 25 yo building?

    Whispering Way is smaller then Berkeley Meadows & it’s Lawn & Snow in 2006 was $25K. The 7% made them budget an extra $2K for 2007.

  46. Mr Wantanapolous says:

    “West, I think unemployment benefits should be extended while the millionaires tax rate should be reinstated.”

    Capital flows to where it’s treated the best. It can occur on the turn of a dime. If you watch currency exchange rates it’s happening right under your nose. What’s the outcome when you can no longer rob Peter to pay Paul?

  47. cobbler says:

    Housing Shortage Makes Australian Home Prices Almost Twice U.S.

    By Nichola Saminather

    July 6 (Bloomberg) — Tamara Jenkins has been outbid about 20 times in her nine-month quest to buy an apartment in Melbourne’s inner suburbs.

    “I started with such enthusiasm,” the 36-year-old public relations director said in an interview. “I’m so frustrated with the process. I’m ready to buy, but I keep missing out.”

    The source of her frustration — a shortage of 200,000 dwellings — is helping fuel Australian home prices, which are 82 percent higher than in the U.S., and disproving investors such as Jeremy Grantham, who says they will fall 42 percent as interest rates rise in one of the world’s priciest home markets.

    “It will take years to turn the shortage around,” said Matthew Bell, an economist at Australian Property Monitors, a researcher cited by the central bank. “When it comes down to it, that’s fundamentally what’s going to drive the market.”

    Australia’s median home price was 6.8 times gross yearly income last year, compared with 5.1 times in the U.K. and 2.9 times in the U.S., according to the annual Demographia International Housing Affordability Survey. The nation of 22 million people has six of the 10 most unaffordable cities among the U.S., U.K., Canada, Ireland, New Zealand and Australia, the survey showed.

    Building approvals slumped 6.6 percent in May to a little over 13,400 after government stimulus that gave as much as A$21,000 for newly built homes was cut.

    Christopher Wood, chief equity strategist at Hong Kong- based CLSA Asia-Pacific Markets, said the first-home buyer incentives in 2008 and 2009 — at a time when interest rates were at a half-century low — may have put Australia on the path to its own version of the subprime mortgage crisis.

    ‘Boomerang’ Effect

    “In the long term, that policy will boomerang back on the Australian economy and the government because all they’ll have succeeded in doing is incentivizing people to buy houses who can’t afford them — very similar to the subprime issue in America,” Wood said.

    Australia’s household debt to disposable income ratio was 158 percent as of March 31, based on RBA data. That compares with 133 percent in the U.S. as of 2007, prior to the housing collapse there, according to Federal Reserve Bank of San Francisco figures.

    http://noir.bloomberg.com/apps/news?pid=20601087&sid=a4vbRYnAyv_A&pos=7

  48. Mr Wantanapolous says:

    sas3 or sos;

    “West, I think unemployment benefits should be extended while the millionaires tax rate should be reinstated.”

    Capital flows to where it’s treated the best. It can occur on the turn of a dime. If you watch currency exchange rates it’s happening right under your nose. What’s the outcome when you can no longer rob Peter to pay Paul?

    Tax? Tax whom? It’s the end for all the teat suckers/unions/parasites, etc..

    http://www.youtube.com/watch?v=_eyFiClAzq8

  49. Mr Wantanapolous says:

    Your good faith and credit is being prostituted. It’s the world’s greatest lynching, yet 99% have no clue. Don’t worry, you’re in good hands; Obama, Bernanke, Geithner. Between the 3, 0 years of private experience, not 1 loan written nor 1 bad loan written off.

    234 years strong, yet, 40% of the money supply printed since Bergabe took the reins. That said, the answer, is to tax the millionaire’s? The Bilderberg group, {global enslavement} is spinning.

  50. jersey gal says:

    chicagofinance in 43:
    Why? Taxes would be higher if bought in secondary market, as tax according to tax abat. is based on highest ever sales price.

  51. Final Doom says:

    cobbler (48)-

    Nothing like a collectivist supertax on the mining industry to kill a country dead in its tracks.

    I guess tax incentives that add up to $40,000 in some instances doesn’t fuel a crazy spec bubble, either. It’s all supply and demand, right???

    Go ahead and get long Australia. I’ll take the other side of that trade every day of the week.

  52. Final Doom says:

    And, Australia plays rubbish football.

  53. cobbler says:

    doom [52]
    The article certainly supports your thesis on the bubliciousness of the Australia RE. I’d certainly not go long on it…
    For the mining tax, though, their govt seems to try to slow down the natural resources export growth, and maybe correctly. Depending on the commodities export is almost as bad as the credit derivatives…

  54. Comrade Nom Deplume aux maison says:

    [41] sas3

    “I think unemployment benefits should be extended while the millionaires tax rate should be reinstated.”

    As one about to be unemployed, I can see the appeal. But if you reinstate that sort of tax, be sure you also throw up some barbed wire. Otherwise, that giant sucking sound you hear will be the capital outflow. And watch the 6039G number—many think the USG is keeping it artificially low for a reason.

  55. Comrade Nom Deplume aux maison says:

    [48] cobbler

    Astonishing, in a country that has a population less than 1/10 of the US, and a land mass roughly the same size.

    Of course, nearly everyone in Aus lives within commuting distance of a handful of cities. But even so, one doesn’t need to go far outside a city to find developable land.

  56. chicagofinance says:

    So? That is an excellent piece of information that drives the price down further….if the fact is public knowledge, then it is in the price….as a buyer it is your benefit….AT MINIMUM you are neutral to it….

    jersey gal says:
    July 5, 2010 at 9:30 pm
    chicagofinance in 43:
    Why? Taxes would be higher if bought in secondary market, as tax according to tax abat. is based on highest ever sales price.

  57. sas3 says:

    Nom #56,

    As someone that didn’t have a single day off between jobs (till now), I’d be willing to pay more in taxes or UI insurance, if there is a guarantee that when the SHTF, there is some safety net.

    S

  58. me@work says:

    I have entirely too much anxiety.

    sl

  59. Final Doom says:

    sastry (58)-

    That would be wonderful…if the gubmint that administrated this happy program weren’t a bunch of pinheaded crooks and dolts.

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