From the Record:
Oil, jobs, health costs leave us worried about economy
There may be a booming stock market and a relatively strong economy, but your neighbors are feeling uncertain about what lies ahead, The Record’s annual economic poll has found.
But at the same time, folks in North Jersey overwhelmingly have faith in the value of their homes, shrugging off evidence of a significant downturn in the real estate market.
“New Jersey is a great place, but it’s become tougher to succeed here for businesses, and people get it,” said John Galandak, president of the Paramus-based Commerce and Industry Association of New Jersey. “People feel it in their paycheck every week when they go to pay their household expenses.”
The poll is based on the responses of 600 adults from Bergen and Passaic counties who were interviewed Jan. 21-24. Results have a margin of error of plus or minus four percentage points.
To be sure, there is plenty to cheer in the findings. Nearly four out of five people say their finances either improved or stayed the same in 2006, a ratio that grows with the income level of the interviewee.
But the most notable element on the positive side is the abiding faith people have in the real estate market. Some 56 percent expect the value of their homes to rise this year, and another 20 percent say it will at least hold steady. Two out of three homeowners, in fact, aren’t worried the value of their real estate will slip.
In 2006, the gross domestic product, widely considered the best measure of the country’s economic position, increased by 3.4 percent — compared with 3.2 percent in 2005. And the stock market reached an all-time high, at least as measured by the Dow Jones industrial average.
So why then, are so many in North Jersey, skittish about what lies ahead?
Lots of things, apparently, combine to make it tough to have a chin-up attitude, economists say.
…
“At the state level, we had continued structural fiscal problems,” said Seneca, chairman of the New Jersey Council of Economic Advisors. He cited tepid job growth and high taxes as reasons people are worried.“The intense concern with property taxes is continuing and overall, the generally high tax climate in New Jersey, despite higher incomes, creates strains on New Jersey households,” Seneca said. “So it’s not surprising that New Jersey households, while still generally enjoying high wages and typically still employed, are beset by unsettling national and international concerns, and state economic and political conditions.”
Some 46 percent say they are concerned about their job security this year, a slim uptick over last year. In 2002, only 18 percent were worried about losing their jobs.
“It’s not surprising,” said Galandak of the Commerce and Industry Association. “New Jersey is one of the least business-friendly states and people know that is a reason to worry.”
And businesses here, like their counterparts across the country, are passing along health-care insurance expenses to their workers. Fifty-three percent of poll respondents said they were asked by their employer to pay more this year for their employer-administered health care coverage, and 12 percent of those were asked to pay “a lot more.”
“People know the cost of everything is higher,” Galandak said. “They see large companies cutting back in order to stay in business and make a profit. They know they’re being asked to pay more and they feel less secure because they’re not hearing optimism around the water cooler.”
Fort Lee and the gold coast go up all the time, everyone has money and their jobs are all fine.
Can pay a 4k mortgage or 2k dollar rents
and have enougt to get match mercedes benz
Money, money, money!
I made a mistake I read all these sites,
and bught a small place unlike my friend Mike
Now my co-op is only worth 60K but his condo went from 200 to 300K
He can pay for grad school with a heloc, and a nice car from his check, can afford some nice looking hotties
And were are we? Jealousbitterrenters we be!
Yep – it’s what my realtor is saying – there are the same 7 houses in town I was looking in – all of htem were on the maeket since spring 2006. price reductions – 5K…..
5 of them are empty…
but after my suggestion to put an offer at 100K less let the home owner to keep their house on the market for that price for a month after my offer – if they get a bidding war – I will let the houses go.
Realtor told me that I was crazy (it would be about 35% off the price).
By why not do that – put house at 30-40% off and say – hihest bid in a month wins – wouldn’t this be a real gauge on how muc people are willing to pay??
You still do not have too sell if you do not like the highest bid??
“They know they’re being asked to pay more and they feel less secure because they’re not hearing optimism around the water cooler.”
My personal observations are that it’s the younger crowd where I work that tends to gripe the most about New Jersey. These are people who either don’t have a home (but they all want one) or have one with a larger-than-comfort mortgage. From older workers (say, 40+) the complaints I hear about the most tend to center around the congestion and sometimes the weather. They seem to not complain about costs so much. Maybe their mortgages aren’t as bad as ours are?
Sych
Thats because they bought with pre-bubble mortages
Patrick,
I hear that. As a proud bubble buyer (2003), I can attest to the fact that the thought of actually losing money on my home scares the hell out of me.
Was browsing GSMLS yesterday and noticed new construction homes in Franklin Township for 415-420K. I have no data to back this up but I am pretty sure prices were higher last year.
From older workers (say, 40+) the complaints I hear about the most tend to center around the congestion and sometimes the weather. They seem to not complain about costs so much. Maybe their mortgages aren’t as bad as ours are?
Not only 40+ bought their houses pre-bubble, but the are the ones at the top of their earning power. Younger people are just starting in their professional field and wll take a while to get to high earnings.
But main reason – is salaries are flat, and housing/healthcare/car insurance/taxes raised a lot in the last 5 years…
Not only 40+ bought their houses pre-bubble, but the are the ones at the top of their earning power. Younger people are just starting in their professional field and wll take a while to get to high earnings.
I think there’s more to it than that. I’m just about 30 and make 90% more than what I made when I got started (I was 22). Am I going to rush out and get a mortgage 2.8 times the size of my present annual income? No. Why not? Because wages are much more volatile today than they were 20 years ago. Present earnings are not as good an indicator of future earnings as they once were.
[Older workers (say, 40+)] seem to not complain about costs so much. Maybe their mortgages aren’t as bad as ours are?
Sync,
I see the same thing at my job. Many boomers have small or no mortgage payment and are at the peak of their income potential. Property taxes are annoying and concerning, but often their only major housing expense.
My parents, for example, pay $8,500k in property taxes, but their mortgage is paid off. They aren’t happy about their taxes, but it’s not enough to get then to leave NJ.
For a young couple buying a house today, tacking on an $8,500 tax bill to an oversized mortgage in a state where opportunities are diminishing everyday is a real problem.
[Older workers (say, 40+)] seem to not complain about costs so much. Maybe their mortgages aren’t as bad as ours are?
Sync,
I see the same thing at my job. Many boomers have small or no mortgage payment and are at the peak of their income potential. Property taxes are annoying and concerning, but often their only major housing expense.
My parents, for example, pay $8,500k in property taxes, but their mortgage is paid off. They aren’t happy about their taxes, but it’s not enough to get then to leave NJ.
For a young couple buying a house today, tacking on an $8,500 tax bill to an oversized mortgage in a state where opportunities are diminishing everyday is a real problem.
Because wages are much more volatile today than they were 20 years ago.
I also know, at least at my job, many of the older workers are grandathered into much better benefits packages than younger workers have. Older workers have better health coverage at a lower cost to the worker and a better pension plan. Younger workers have higher health insurance contribution requirements and are expected to fully avail themselves of the 401k, with a very small pension plan.
So, a dollar earned by a younger worker is essentially worth less than a dollar earned by an older worker.
Yeap. Also, I know a lot of young people who have been laid off at a certain salary level only to find their next job at a lower salary level. It then takes them 1-3 years to get back to where they were and with any luck their new employer decides to do another reorg and we all know what happens next…
That sort of thing just didn’t happen as much 20 years ago; consequently, those workers could assume with a higher degree of certainty that their wages would go up (or at least remain the same) with time. With us, there’s no telling.
That faith in housing is misplaced, and it is telling that the number is so high. If things wer great all around, I do not belive people would be that concerned about their housing values.
As far as people over 40 having it better , nto so sure. Many I know have been liad off, adn will never eran the salaries they wer earning before. Plus many are paying hughe collge tuition bills.
Something I find very scary, is that some who have avoided lay offs etc, haveb been sopening money like it grows on trees, massive additions, expensive cars, and little to no savings. They I belive are the ones with the misplaced faith. At then end of the day the over leveraged house is all they have.
I did the math even with 200K down and a 80K a year job I cannot afford a 500-600K house.
Sigh it’s time to move when I need a bigger place…
#13 R Patrick: And that iswhy this thing is son insane, so hold on, take a deep breath, and if you need to stay int eh Peoples Republic of NJ, just be a patient a while longer, and the pendelum will swing the other way;it has already started.