From the Record:
NYC beckons new parents as North Jersey suburbs no longer seen as only place to raise kids
In a striking reversal, growing numbers of young parents are choosing the bustle of New York City over the calm of suburban life as a place to live, a trend that is already changing the face of some neighborhoods across North Jersey and could have long-term implications for schools, the housing market and beyond.
The number of children under the age of 5 has fallen 20 to 40 percent in many wealthy communities, with an overall drop of 12 percent across Bergen and Passaic counties since 2000, according to U.S. Census Bureau data. At the same time, middle- and upper-income areas of Manhattan and Brooklyn have seen virtually the opposite shift in both the number of young adults as well as preschool children, an analysis of the data by The Record found.
The trend, a break in a pattern that has held since before World War II, has left Bergen County with 6,000 fewer children younger than 5 years old than it had in 2000. Passaic’s figure, meanwhile, has slid by about 6,000 since 2005. Similar declines have appeared in suburban Westchester and Nassau counties in New York, the analysis found.
“This is a huge deal,” said Andrew Beveridge, a sociologist at Queens College in New York City who studies population flows. “Affluent men and women in this area who want to have kids are much more likely to have kids in New York City and not move to the suburbs, which is the opposite of the way things used to go. The city is in, and the suburbs are out.”
…
But while economic forces go in cycles, the shift in preference for urban life could portend long-term changes in the status of the suburbs as a place to buy houses, settle and raise children.Already, the fallout is hitting at least a few North Jersey school systems, causing reductions in the number of classes or rerouting of children among schools, officials say.
“It’s astonishing. Remarkable,” said Adam Fried, superintendent in the Harrington Park School District, which cut the number of kindergarten classes after the enrollment dropped from 70 to 36 children in 2012. “It’s a big concern.”
…
Real estate experts say they’ve noticed the trend as well. Upwardly mobile young families have long been the lifeblood of upscale suburbia. As their numbers decline, the impact could be felt by home sellers already reeling from 20 to 30 percent price drops the past five years, said Jeffrey Otteau, an East Brunswick real estate appraiser who follows the statewide housing market.“The effect will be less demand and subpar price increases for suburban real estate, and price declines for large-lot luxury suburban houses,” he said. “It’s a zero-sum game.”
…
Whether the preference for urban life among affluent parents continues into the future remains to be seen.But Beveridge, the Queens College sociologist, discerns a structural change in how parents see the suburbs, especially if they want to be closer to jobs in the city.
“The suburbs were set up nicely for the idea that the husband would commute to and from city, and the wife would stay home,” he said. “Now, she is working, so that completely changes things, particularly if she is working at a relatively high-status job.”
Look at the bright side, maybe property taxes will go down in the ‘burbs, as fewer schools, teachers, and administrators are needed…
From the APP:
Sandy has made moving their only option
Some homeowners at the Shore, constrained by age, money or impatience, have decided to put their homes on the market and sell, even if it means taking a steep loss. Their decision has attracted a few deep-pocketed investors, who have swooped in, banking on the Shore’s recovery.
It sets the stage for the free market to work itself out as it often does after natural disasters. But there is a major stumbling block. Investors who want to take the risk will have to do it on their own. Lenders, who, like their borrowers, aren’t sure about building standards and insurance rates, aren’t offering mortgages for those homes.
“There’s opportunity for people who see them as opportunities,” said Lisa English, an agent with Keller Williams Realty in Shrewsbury. “Otherwise, it’s a just a huge headache and mess.”
…
Sandy is on target to be the nation’s second-costliest tropical storm system, trailing only Hurricane Katrina in 2005. It has left 22,000 homes uninhabitable, according to a report last week by the National Hurricane Center.
And owners of those homes face obstacles in their effort to rebuild. New homes and houses with 50 percent or more damage from Sandy will need to be elevated above new FEMA flood maps or likely face exorbitant premiums for flood insurance.
While contractors have the material and know-how to build homes to withstand hurricanes, middle-class homeowners in particular aren’t sure if they will have enough money — from insurance, loans, grants and their savings — to pay them.
It has produced scenes such as the one in the Shore Acres section of Brick, where street names such as Bay View Drive and Water Way Court once promised a lifestyle of leisurely weekends, boating and swimming. Now, a handful of homes have “For Sale” signs in their front yards.
“It’s not tons of people (selling); it’s still slow. But it’s a variety of people for a variety of reasons,” said Fran Graffeo, manager of Weichert Realtors’ office in Brick. The reasons range from, “ ‘I never want to worry about this happening again’ to ‘I need to cut my losses, sell my property because I don’t have enough money to raise it.’ ”
…
The storm of 1962 left similar devastation in Long Beach Island. But investors pounced, bought storm-damaged property below market value, rebuilt, and sold at a profit.
The difference? They had access to loans, said Surf City Mayor Leonard Connors, who himself borrowed money to purchase three oceanfront properties for development.
“If they have the cash (today), that’s a horse of a different color,” Connors said. “However, I don’t know if they’d want to risk the cash in this environment, which, at least at this point in time, looks to be not very stable.”
“If investors can’t borrow money without having some insurance in the event of the (flood) loss, I don’t see them coming in with large amounts of money.” he said. “I see that being a hindrance for the market.”
Good Morning New Jersey
[1] grim,
Sarc off?
Real estate experts say they’ve noticed the trend as well. Upwardly mobile young families have long been the lifeblood of upscale suburbia. As their numbers decline, the impact could be felt by home sellers already reeling from 20 to 30 percent price drops the past five years, said Jeffrey Otteau, an East Brunswick real estate appraiser who follows the statewide housing market.
Sell? Sell to whom?
Moose,
The same token.Look at the biggest expense of a family , the mortgage.It is constant if you took a fix.At 2% inflation your mortgage money is loosing value annually.A $100 a month payment this year is equivalent to $98 a month next years money and $96.04 the next year etc until it looses almost value and your payment stays the same.
At 13.9% inflation your largest expense stays constant when money is loosing 13.9% of its value annually.
Anon E. Moose says:
February 16, 2013 at 8:54 am
Eddie [5];
Don’t overlook the inflation component. I was always a strong believer that inflation would do to home prices what sellers themselves couldn’t bear to watch, because they could fool themselves into thinking that it wasn’t really happening.t
C-S is not inflation adjusted. C-S is 24.5% down from 2006 peak, and riding at 2003 (nominal) levels. 2006-2012 aggregate CPI inflation was 13.9% (and even CPI is widely believed as understated). That’s real drop of 38.4% in less than 7 years. They called us all tin-foil hats for predicting 40% drops from the peak.
#6
Add to that the 5-10% increase in rent compare to a constant mortgage
So the issue I have with this piece is that it makes the assumption the NYC is the beneficiary of the demographic shift, without citing statistics, only anecdotes. Seems plausible, but what are the numbers?
I’m still looking at data, but it appears that the demographic shift is just the same within NYC.
Manhattan public school enrollment is down from approx 170k in 2000 to 158k in 2011. The only place that has seen growth is Queens and Staten Island, hardly good options for those leaving the suburbs.
http://www.ibo.nyc.ny.us/iboreports/2011edindicatorsreport.pdf – Page 9
Certainly begs the question, is what we are seeing a demographic shift from place to place? Or, is this just the fallout of unaffordability during the bubble (lower birthrates, folks holding off having kids) or the resultant decline in household formation that took place during the bust.
People are moving out of the area – the NYC/NJ area. No one can afford it any longer. It’s becoming a shell. All the tongue-in-cheek remarks over the years about multiple families living in McMansions, etc. are coming to fruition.
Living in a city has big financial implications compared to the suburb.A $500K house in the suburb is equivalent to a $1 mil small room building condo in the city.Groceries,restaurants and food usually cost more in the city.A high earning family that wish to sacrifice spending this money instead of saving it,city living is for them.
yo [7];
the 5-10% increase in rent compare to a constant mortgage
Put down the crack pipe. No landlord is going to raise the rent on a paying tenant 5-10% unless they are prepared to find a replacement and convinced they can do so quickly. My rent was constant from 2001-2006; only went up when the landlady decided she wanted her 20-somethign son and his shack-up girlfriend out of her basement, and was willing to give them our space.
Danger of statistics — sure rents on average may be going up — but landlords typically raise the rent when units become vacant. They generally aren’t going to risk vacancy by squeezing a good and paying tenant. Maybe 1-2% every other year here and there, but not consistently tightening the vice 5% or more year in and year out. They’ll be vacant more than they are occupied.
BTW, you’re right about locking in a nominal P+I payment with a fully amortizing mortgage, but that’s not the whole story. Right now, my taxes are as much as my interest, and taxes aren’t locked in, they will outpace inflation. So will utilities, but most renters will pay utilities anyway.
I believe,the people that owns their homes now and was able to refi at low interest rates will stay foot.No need to sell if they can afford the mortgage unless a need to sell comes up.Specially when rates have nowhere to go but up.No one will want to give up 3% mortgage interest rate when inflation is running same rate.Its a zero interest when math is done.
Yo [10];
Check out Karlgaard’s Life 2.0. Talks about the ‘urban yuppie premium’, a concept that rolls in all those things — higher costs on everyday staples, entertainment, private schools, etc.
Yo [12];
But the people who bought at the top of the bubble an would otherwise be forced to sell at current market are only able to refi because of government intervention like HARP 2.0. Otherwise they’d be stuck paying the note on their bubble price at 5-6% or sell.
So government is constricting supply. Not coincidentally, this helps their client banks with lots of real estate on their hands…
Grim [1];
maybe property taxes will go down in the ‘burbs, as fewer schools, teachers, and administrators are needed
BWAHAHAHA!!!!
You owe me a new keyboard for that one… ;-)
Moose,
I know you hate paying property tax as anyone else.It depends where you live.I live in edison,my taxes is $6800 a year.It is a train town,I live one block away from the Train station.It is a College town,I am less than 1 mile away from Rutgers Campus.I get 24 hour police protection,2x a week garbage pick up,leaves,branches pick up once a week.A park is behind me that they maintain with my tax mone.They plow my street when there is snow.2 kids went to the school system. Tell me how much will you pay if you had to pay for all this individually.
Moose,
Maybe Gator can chime on this
“Danger of statistics — sure rents on average may be going up — but landlords typically raise the rent when units become vacant. They generally aren’t going to risk vacancy by squeezing a good and paying tenant. Maybe 1-2% every other year here and there, but not consistently tightening the vice 5% or more year in and year out. They’ll be vacant more than they are occupied.”
#14 Moose
Exactly my point.Now the govt did its job,they will stay foot unless there is a need.No need to sell if they can afford the mortgage unless a need to sell comes up.Specially when rates have nowhere to go but up.No one will want to give up 3% mortgage interest rate when inflation is running same rate.Its a zero interest when math is done.
There are a couple folks here that were longer-term NYC residents or at least spend enough time in town to know the skinny better than others.
What’s it look like raising a family in Manhattan? Let’s make it interesting, two kids, Manhattan, one boy, one girl.
The article is arguing two different points from two different sides. There will be a lot of reasons for the drop. People delaying having kids. Affordable housing stock, illegals returning home etc etc. Saying they are all moving to NYC is a bit of a stretch. Most people I know moved to Utah Virginia Maryland, Texas etc. Living in NYC with one kid is doable. Two kids, you need to have a big 6+ gap between the kids. Where you live in the city is secondary to what school your kid goes to. My cousin was living on 3rd ave and the kid was in school on the west side. Getting across central park every day, got very old very quickly.
Just when you thought Mary J. Blige’s financial problems couldn’t get any worse … TMZ has learned the singer has been hit with a $900,000 tax lien in the State of New Jersey.
Blige — who was JUST sued earlier this month for allegedly defaulting on a $500k bank loan — is now on the hook for $901,769.65 in back taxes to the Garden State, this according to official documents obtained by TMZ.
The tax lien is the latest in a string of financial woes for the Grammy winner — just last year, Mary J. was sued for allegedly defaulting on a $2.2 million bank loan .. and before that, her charity was sued for not paying back a $250k loan.
Back in May, Blige blamed the charity’s financial issues on the staff — saying, “The problem is that I didn’t have the right people in the right places doing the right things.”
re # 19 -Grim the school enrollments tell the whole picture. Since my son was born just about every one of the kids from the 2009 mom’s group has moved to the burbs. Every day I meet people here from Europe and parts yonder now than Americans it seems now in Hoboken, perhaps 50% in my son’s school. I have 2 kids now in preschool and day care, we both work so we pay for 5 days. Cost is more than a mortgage $4500 per month for two. My rent is paltry compared. I cannot see parents staying all the way to high school. Even our city has declining enrollments, the have about 200 “school choice” students from other towns in the high school now and are looking to send the 7th grade students there now along with the 8th graders who are already there.
Doesn’t jive:
http://www.huffingtonpost.com/mobileweb/2013/02/12/empty-schools-in-cities_n_2669509.html
Middle income areas of Manhattan????
“……At the same time, middle- and upper-income areas of Manhattan………”
Edison is pure garbage unless you are Desi…..you are taking a huge quality of life hit…..I lived in Iselin for a year…..you are aware that Middlesex is used as the prototype in suburban planning education of an example of how to fcuk it up really badly and do not let his happen to your community……..
yome says:
February 17, 2013 at 10:05 am
Moose,
I know you hate paying property tax as anyone else.It depends where you live.I live in edison,my taxes is $6800 a year.It is a train town,I live one block away from the Train station.It is a College town,I am less than 1 mile away from Rutgers Campus.I get 24 hour police protection,2x a week garbage pick up,leaves,branches pick up once a week.A park is behind me that they maintain with my tax mone.They plow my street when there is snow.2 kids went to the school system. Tell me how much will you pay if you had to pay for all this individually.
Chi,
As I have said it depends where you want to live. For my family income, this quality of life satisfy my needs. I have 2 kids that graduated in the school system. My eldest a accountant now and currently working for MS and my youngest is graduating this sem. Hopefully she gets a job where she interns. They both graduated in Rutgers with no college loans thanks to dad and mom which I would have not able to afford if I had to pay for room and board at the same time saving for retirement. Which I am planning to do at 61. My neighbors are college educated, walk to the train station and works in the city. Enjoying the low taxes and affordable homes of the area. If this not the quality of life you want good luck
Yeah that smarts 268k loss on land in 2 years.
http://www.zillow.com/homedetails/222-Sunnyside-Rd-Lincroft-NJ-07738/39335768_zpid/
25 chi fi
Wow. Hostile much? You evidently have a thing with Middlesex and/or immigrants who aren’t northern European. And Desi who?
Tell us about your time in Iselin and what made you leave…
With regard to rents…family business was owning and managing rental properties. At peak we had about 900 tenants in mostly rent controlled buildings. The legal rent increases permitted are generally very small and if you do not increase the rents you cannot keep pace with the increased costs of operation. We always increased the rent the maximum amount permitted.
When I set out to rebuild my capital again, I kept things very simple: gold, silver, and Chilean property.
These asset classes have performed extraordinarily well. And as much as I believe in the precious metals premise, I have actually been reducing my positions in order to buy more Chilean property.
Outside of Santiago and other urban areas in Chile, most real estate transactions here are done “al contado” or paid in full. People have to save up for years and actually have the money in hand before they make a purchase meaning downside risk is very limited.
In other words, this is not an asset being inflated by central bankers; I’m not riding a wave of easy credit, but rather speculating in the future growth of this vibrant economy.
Month after month, there are obvious signs of improvement. Roads are paved. New highways are built. Electrical infrastructure is improved. Each time this happens, property prices can double in a short period of time.
If zoning is changed at the same time as infrastructure projects are going in, you can sometimes replace the word “double” from the previous sentence with “triple” or “quadruple”.
Plus, as Simon often writes about, there’s nothing like an investment that bears fruit, both literally and figuratively. When you have fertile soil and solid water sources, your investment cannot go to zero. It makes it hard to get hurt.
These sorts of situations are hard to find in today’s world and there’s no doubt in my mind that sometime soon, a lot more people outside of Chile are going to catch on to this anomaly.
Until that happens, I’m happy to be one of the few, along with Simon, to be investing ahead of the crowd in this thriving country.
You are interpreting my comments backward…..it stinks, but if you are Desi you at least have an excuse to put up with it. It doesn’t stink because of who is there. In short, it is overbuilt without any master plan, so it just bites….also it is proximate to many industrial areas, so you are also slowing poisoning yourself as well…..
caljn says:
February 17, 2013 at 2:56 pm
25 chi fi
Wow. Hostile much? You evidently have a thing with Middlesex and/or immigrants who aren’t northern European. And Desi who?
Tell us about your time in Iselin and what made you leave…
Compound interest: Why the poor stay poor and the rich stay rich
To take another example, let’s think of compound interest on credit cards for the average American household.
Let’s say you are an average American household, and you carry an average balance of $15,956 in credit card debt.
Also, as an average American household, let’s assume you pay an average current rate of 12.83%.[4]
Finally, let’s assume you carry this average balance for 40 years, between ages 25 and 65. How much did your credit card company make off of you and your extreme averageness?
Answer: $2,629,618.64[5]
“Now the govt did its job”
Its JOB…? Are you freaking kidding me? Does that fact, if you believe and understand arithmatic, that there are people who can’t afford to buy homes because the prices have not been allowed to fall not bother you at all?
yome says:
February 17, 2013 at 10:10 am
#14 Moose
Exactly my point.Now the govt did its job,they will stay foot unless there is a need.No need to sell if they can afford the mortgage unless a need to sell comes up.Specially when rates have nowhere to go but up.No one will want to give up 3% mortgage interest rate when inflation is running same rate.Its a zero interest when math is done.
“Tell me how much will you pay if you had to pay for all this individually.”
1) Not surprisingly, you miss the point entirely. The problem is the fact that people are forced to pay, regardless of services used. The problem is you can never own property free and clear. Expat is right that it should be renamed to Town Rent or something else as to not hide what it truly is.
2) To answer your question, some people would pay more while others would pay less. But than that would ruin the subsidies you receive at others expense, wouldn’t it?
yome says:
February 17, 2013 at 10:05 am
Moose,
I know you hate paying property tax as anyone else.It depends where you live.I live in edison,my taxes is $6800 a year.It is a train town,I live one block away from the Train station.It is a College town,I am less than 1 mile away from Rutgers Campus.I get 24 hour police protection,2x a week garbage pick up,leaves,branches pick up once a week.A park is behind me that they maintain with my tax mone.They plow my street when there is snow.2 kids went to the school system. Tell me how much will you pay if you had to pay for all this individually.
It’s very pricey and the racket is extensive. Especially when you consider that you can move to New Mexico and about $150 a year in property taxes.
Have a kid….Move here:
http://tinyurl.com/a4bqoe2
The economic downturn exacerbated long-term factors that were already eroding the financial standing of aging Americans: an inexorable rise in health-care costs, growing debt among older Americans and a shift in responsibility from employers to workers to plan for retirement.
The consequence is that the nation is facing a huge retirement savings deficit — as much as $6.6 trillion, or about $57,000 per household, according to a U.S. Senate report.
Using data on household finances collected by the Federal Reserve, the Center for Retirement Research estimates that 53 percent of American workers 30 and older are on a path that will leave them unprepared for retirement. That marks a sharp deterioration since 2001, when 38 percent of Americans were at risk of declining living standards in old age. In 1989, 30 percent faced that risk.
http://undergroundgarage.com/radio-affiliates
joyce says;
“that there are people who can’t afford to buy homes because the prices have not been allowed to fall not bother you at all? ”
Nationally the prices of homes are down almost 30% from the peak of 2006 and interest rate are down to 3.5% from the peak of 6%.From this statistics a $600,000 house from the peak can be bought for $420,000 today.A $600,000 home has a mortgage of 30yr fixed at $3,597.30 a month.A $420,000 home today at 3.5% interest is $1885.99 a month. THIS SHOULD STILL BOTHER ME?
There are people that wants a house but will not be able to afford a house at any reasonable price and there are the ones that can afford but speculated for a price drop and still waiting.
The people that bought homes that continued to pay their mortgage and squezzed where given relief through HARP 2.0.Dont they deserve the help? The people that cant afford their homes are already in foreclosure or in the process.What help did they get aside from letting them stay longer in their homes? They are still going to loose the house.Everybody knows they will not be able to afford it.It is just humanity not to throw a family in the street without giving them enough time to look for a home.Ok too much time
In conclusion, the people that got the help are the ones that can afford their homes and current on their mortgage.Did this stop the downturn of prices?Maybe.Is it not about time we start groing the economy again? If you noticed as the housing made a turn, a life shows in the economy.
#34 Joyce says;
“2) To answer your question, some people would pay more while others would pay less. But than that would ruin the subsidies you receive at others expense, wouldn’t it?
I dont get subsidies or any in this blog does.I make enough to get taxed and not get subsidies. What keeps our property tax low is the “Ratables”.Thanks to the Desi,Chino and other Asians businesses they brought to the town. Thanks to the Industrial areas that brought job to the town. Average home prices is 2.5 times average household income.
Now look around your town.How much ratables do you have? Now complain about your taxes. Hey you live next to the Kardashians,life is good.
For the haters
http://en.wikipedia.org/wiki/Edison,_New_Jersey
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