From the WSJ:
The first reports on the New York City area job market since the federal government shutdown showed a mixed picture of the regional economy, with sluggish job growth in New Jersey and a rise in technology and creative-industry positions in the five boroughs.
he data released Thursday showed that New Jersey lost 1,400 private-sector jobs in October, part of a three-month series of reports showing either modest gains or job losses in the private sector since the last time employment was measured, in August, according to the New Jersey Department of Labor and Workforce Development. The federal government shutdown in October caused a delay in jobs and labor force data being sent to state departments of labor.
Weak private-sector job growth could pose a challenge for New Jersey Gov. Chris Christie, who is seen as a contender for the 2016 GOP nomination for president. The state’s unemployment rate fell 0.2 percentage points to 8.4% in October, but that remained well above the national rate of 7.3%. The state’s relatively slow job growth comes amid stronger numbers for the national economy, which added 204,000 jobs in October, despite the turmoil in Washington.
“When you contrast that with what is happening nationally, it’s worrisome,” said Joseph Seneca, a Rutgers University economist, who said the preliminary numbers could be revised upward.
Mr. Christie’s office said New Jersey has added more than 143,000 private-sector jobs since February 2010, which puts it in the middle of the pack among states. Some of the state’s key industries—pharmaceuticals, manufacturing and financial services—have been either stagnant or moving employees elsewhere, economists said.
…
New York state experienced modest private-sector job growth since August, mostly driven by an increase in New York City, where technology and advertising appear at last to be having a noticeable impact on job growth, economists said.The city added 33,700 jobs between September and October, slightly better than expected based on the historical average, according to the New York state Department of Labor. Advertising and computer systems design both hit near all-time highs in October, while finance jobs grew slightly, as they continued to lag the city’s recovery.
The unemployment rate rose to 8.7% in October from the month earlier in New York City, which has had a stubbornly high rate of unemployment despite strong job growth.
Officials in Mayor Michael Bloomberg’s administration have argued that is because more people have either re-entered the workforce or come to the city seeking work as the economy has strengthened
Connecticut, which has lagged both New York and New Jersey, added 1,000 private-sector jobs in October. The state’s unemployment rate decline to 7.9% in October from 8.1% in August.
“The September and October reports are sending mixed signals about Connecticut’s labor markets,” said Andy Condon, director of the office of research at the Connecticut Department of Labor. “The weeks leading up to the federal government shutdown, evidently, led to increased economic uncertainty and hiring indecision across the state.”
From Forbes:
Housing Is Slowing In Response To Higher Mortgage Rates — And It Isn’t Over Yet
Ignore all the headlines about housing recovery and rising home prices. The market, nationally, is now in real trouble, thanks to the surge in mortgage rates triggered by the Fed’s spring musings on when it might start to slow its bond purchases. The thought that the single biggest buyer of government and mortgage securities might soon step back from the market spooked investors, both domestic and foreign, and they now demand higher rates on their investments.
This has translated into average 30-year fixed mortgage rates rising from a low of 3.59% in early May to 4.46% last week. As a result, sales of both new and existing homes have dropped, and price gains are slowing. These trends have some way yet to run, and I can’t rule out completely the idea that home prices might fall outright for a time in the first half of next year.
A potential homebuyer today needs to find $780 per month to buy a median-priced new home with a 20% down payment and a 30-year fixed rate mortgage. In early May, the monthly payment was $702. That’s a big increase, and it has removed a large swathe of would-be purchasers who could only just afford the cost back in May, and now can’t. Sure, mortgage rates remain very low by historical standards, but over short periods what matters is the change in rates, not the level.
The adjustment to the rate increase is not yet over. The number of people applying for a new mortgage to finance a home purchase has dropped about 16% since rates began to rise, and the trend is still downwards. This is beginning to filter into both new and existing home sales, which have fallen from their summer peaks and are now clearly headed lower.
…
Eventually, the housing recovery will resume. The pent-up demand is enormous after seven years of low activity, and the relative cost of home purchase has fallen as rents have risen, pushed up by the lowest vacancy rate in 12 years. The availability of mortgages has increased too, though it will still take years before the market returns to normal pre-boom conditions. We understand the idea that a generation of homebuyers has been scarred by the experience of the past few years, but the lesson of other countries which have experience housing booms and busts is that buyers return in droves once confidence returns.
That day has not yet come, except in certain local markets where specific factors overwhelm the national story, and in the short-term you should be braced for a wave of bad news.
Maybe it’s me but I thought 4.46% was a damned good rate.
By the way, very, very few people were lucky enough to grab a 3.5. It was not something that could have been taken into account to trigger a purchasing decision. If you had waited until you saw a 3.5, it is highly likely that the rate would not be 3.5 when you put ink to paper and signed a deal, it was moving that quickly. For the vast majority of folks who closed with a 3.5%, it was pure luck. There was in total, a 3 month window where this was even a possibility, along with 1 week in April of this year.
Articles make it seem like 3.5% was the status quo, everyone was buying at a 3.5%.
Welcome to NJ – We’re open for business – from the Record:
Washington Township restaurant fined after Food Network appearance
A township Greek restaurant recently featured on a Food Network reality TV show was fined $1,000 for not getting a construction permit to perform electrical work — a surprise to the owner, who claims no inspector visited the eatery before the notice was sent.
The township issued Terry Kipriadis, owner of Gyros and Goodies, located in the Washington Town Center strip mall on Pascack Road, a $1,000 violation on Nov. 4 for performing electrical work without a permit. The violation also states that if Kipriadis did not pay by Tuesday, she would have to pay an additional $1,000 per week.
…
None of the work involved new electrical, plumbing or construction work, Kipriadis said, as the lights entwined in the flowers hanging above are plugged into existing outlets. The owner also recently hung a TV in her front window to play the episode on loop, and that too is plugged into an existing outlet, she said.
Kipriadis said a building inspector stopped by a week after she received her notice – but no new violations were issue, and the township has not yet revoked her outstanding violation, which she hasn’t paid.
Some of the state’s key industries—pharmaceuticals, manufacturing and financial services—have been either stagnant or moving employees elsewhere, economists said.
Buy now or be priced out forever.
The data released Thursday showed that New Jersey lost 1,400 private-sector jobs in October, part of a three-month series of reports showing either modest gains or job losses in the private sector since the last time employment was measured, in August, according to the New Jersey Department of Labor and Workforce Development.
In the immortal words of BC Bob and one of the greatest lines ever uttered: “Sell? Sell to whom?”
Ignore all the headlines about housing recovery and rising home prices. The market, nationally, is now in real trouble, thanks to the surge in mortgage rates triggered by the Fed’s spring musings on when it might start to slow its bond purchases.
Tick… tick… tick… tick…
Chris Christie hit a couple of singles in the second inning of his governorship, but pretends that he has won the game. NJ is in desperate need of massive structural reform and economic freedom.
There never was any recovery; in housing, the economy nor in private sector jobs. It’s all smoke and mirrors in an attempt to dupe a greater fool. If you’re vulnerable to being snookered, then someone will undoubtedly oblige.
Ragnar,
That massive s.ucking sound you hear is the middle class being drawn into the vortex of a wormhole.
[8] Ragnar
A picture is worth a thousand words
https://www.google.com/#q=image+of+stubborn+donkey+being+pulled&biv=i%7C0%3Bd%7Cy9Cvqyn9Nft5fM%3A
Imagine if you will a 4,000 lb donkey. The symbolism for the state and a certain party is dead on.
10 eddie
Sadly I have to say I agree with you wholeheartedly. Nothing I can do. Off to work .
Com,
That’s good.
Q. Is the man in the pic supposed to be a repub?
@TheOliverStone: 50 years ago JFK was cut down. Many of you born after still don’t realize how deeply this country was set back. http://t.co/Kii5mXjsxh
anon (the good one),
Glad to see you agree that we need to return to more conservative values and ideas.
10- Fast eddie, I promise you in 10 to 15 years you will kick yourself in the ass for not buying during this period of cheap housing and low mortgage. I get it, it sucks that you have to sell your house in order to purchase, but for everyone else that can get their foot in the door, now is the time to buy. I know you guys want to think everything will crash and come to an end but that never ever happens. Look at Germany during the 30’s…they came back. Look at Japan after ww II, they came back. Look at Brazil and Argentina 20 years ago….they came back. The housing market is not going to crash. It has already had stagnant growth for 7 years and has not crashed. This stagnant growth is what makes real estate such a good deal right now. This is a buying opportunity that only comes around so often. This is how people move up in the world through real estate investments. Look in 2008, everyone thought the stock market was over and done with, the economy was over…blah blah, this week we just hit the 16,000 mark. Don’t blind yourself with this doom and gloom talk, buying now is a great opportunity. Don’t throw away a good opportunity.
In honor of JFK I should almost tell my Crushed Valor story!!!!
Every first generation Irish women in America was in complete tears that day and no housework or meals were cooked that day. I think for the average housewife back then JFK dying was almost worst than if there own husband died. Actually, I dont recall my Mom crying much when my Dad died. But JFK he was a Mans Man and a Ladies Man and a true leader.
anon (the good one) says:
November 22, 2013 at 9:14 am
@TheOliverStone: 50 years ago JFK was cut down. Many of you born after still don’t realize how deeply
Michael,
I can sell my house in a matter of hours. That’s not an issue. There is no real job growth or salary growth. As stated above, real jobs here are diminishing. Add the exponential growth in property taxes, expenses, etc. and your argument has as much chance as holding water in a paper bag.
Michael,
The sum of the forces in the X and Y axis must equal zero in order for a body to be in static equilibrium. No amount of sales pitch and bullsh1t lines by ex-nail technicians or fat, bloated simpletons can change that fact.
If you got a stripper body or the mind of a card shark plenty of work.
However, I see a lot of dumpy middle aged folk with junk resumes and not much of a work ethic in the market.
Ask any recruiter. Hard to find people.
Fast Eddie says:
November 22, 2013 at 9:39 am
Michael,
I can sell my house in a matter of hours. That’s not an issue. There is no real job growth or salary growth. As stated above, real jobs here are diminishing. Add the exponential growth in property taxes, expenses, etc. and your argument has as much chance as holding water in a paper bag.
SACRAMENTO, Calif. (AP) — The board overseeing California’s health insurance exchange voted unanimously Thursday to stick with its current year-end deadline of phasing out more than 1 million individual health insurance policies that fail to meet requirements of the federal health care overhaul, turning aside a plea by President Barack Obama to let those policies continue.
It’s Bush’s fault.
http://finance.yahoo.com/news/calif-health-exchange-upholds-policy-143050396.html
Oh you had a fire… F-ck you, pay me
grim says:
November 22, 2013 at 8:29 am
Welcome to NJ – We’re open for business – from the Record:
and the township has not yet revoked her outstanding violation, which she hasn’t paid.
Fast Eddie, the economy will bounce back. The U.S. is a powerhouse. Our military’s strength says so. If things do get ugly, we have the muscle to push around. If we didn’t have these crappy job #’s and no wage growth, I would not say that right now is a great time to buy. Since we have had crappy job #’s and no wage growth, those are the ingredients holding down the housing prices, making this probably one of the best buying opportunities in the past 60 years. Inflation and wage growth will come, but when they do, it will be too late to get the good deal on real estate. You will have buyers jumping back into the market like its a sprint race, driving up house prices by at least 10 % a year. People will be getting 5 to 10 % raises when this economy and inflation kick in. You are already seeing the begging of it. You see the cries for a higher minimum wage. Our state just passed it. This is the beginning of the wage growth era that will occur in the next 5 years. By 2021-23 you will start to see housing market flying high again like it was 2003. The housing market will def be due for a boom after 20 years since it’s last bubble cycle. Also demographics will drive this next boom. The main reason housing and the economy fell off, is due to a large portion of our population (baby boomers) having stopped spending and started spending less due to retirement. The 2020’s will issue in the next big generation of buyers that will drive the housing market towards highs never reached before. There is so much pent up demand that this might be the biggest real estate boom in a generation. If you have the means to buy real estate in north jersey, do it now.
23-Correction—-You are already seeing the begging of it—meant beginning of it.
[1]
“A potential homebuyer today needs to find $780 per month to buy a median-priced new home with a 20% down payment and a 30-year fixed rate mortgage.”
That just sounds so funny, like something out of a 40 year old newspaper.
GMC Denalis which you see all over every surburban parking lot the car payment is $780 a month.
POS cape says:
November 22, 2013 at 10:07 am
[1]
“A potential homebuyer today needs to find $780 per month to buy a median-priced new home with a 20% down payment and a 30-year fixed rate mortgage.”
That just sounds so funny, like something out of a 40 year old newspaper.
Michael,
You’re mildly entertaining. :)
“Think of how stupid the average person is, and realize half of them are stupider than that” — George Carlin
That would be the median, unless the graph of individuals intellect is a perfect bell curve.
It’s $100,000 overpriced:
http://www.trulia.com/property/3135365311-57-Horizon-Ct-Washington-Township-NJ-07676#photo-17
Shield your eyes before you look at the one bathroom. I think you’ll know which one I’m talking about:
http://www.trulia.com/property/3124330970-819-Wearimus-Rd-Washington-Township-NJ-07676#photo-1
31
What is that a moose lodge in their basement?
Michael says:
November 22, 2013 at 9:32 am
“Look at Germany during the 30′s…they came back. Look at Japan after ww II, they came back. ”
What both Germany and Japan have in common?.. Rebuilt from total demolishing. This correction has never allowed to run its natural course. Government bailout, Fed’s money printing, political gridlocks all prolonging and diminishing any chance of recovery. You think we are on the path of recovery? Think again.
re # 32 – Joyce – It’s all original from 1950. Those 9 x 9 tiles on the floor are absestos.
The value here is the land, nobody want to live like it’s 1950 except for maybe JJ.
Juice Box,
Of course, it’s valuable dirt.
A moose lodge. Lol!!
? median is median
joyce says:
November 22, 2013 at 10:24 am
That would be the median, unless the graph of individuals intellect is a perfect bell curve.
What about the harem room where they feed the man of the house grapes as he lounges on his side?
joyce says:
November 22, 2013 at 10:51 am
What is that a moose lodge in their basement?
He said average
chicagofinance says:
November 22, 2013 at 11:18 am
? median is median
JJ [20];
Paraphrasing:
Why of Why can’t I find armies of rock-star employees to work for subsistence wages?! Woe is Business! Open the borders!
Can’t find good people? Offer more money. Works every single time its tried. Invisible hand strikes again.
Somebody say “moose”?
That’s a big f-ing basement.
At our current trajectory and speed, we will reach oblivion well ahead of my original call.
This one is $250,000 overpriced. If you pay more than the upper 500s, you payed too much. Let’s consider the fact that they did some work to the place. Take on 50k and let’s call it an even 600K. Anything more and you’re an easy mark.
http://www.trulia.com/property/3115648154-101-W-Saddle-River-Rd-Saddle-River-NJ-07458
gary, you’re a mark for even getting into your car and burning gas and time looking at these sinkholes.
Every second you spend at Trulia is a second of your life you’ll never get back.
Meat,
Trulia, NJMLS, GSMLS… does it matter? If you’re buying today, it’ll be a loooong f.ucking time to recoup anything above your down payment. The most one could do is pray that that the money pit doesn’t take a big slide in price if and when you have to get out.
31,
Why do people want tennis and bocci courts in their back yard? They always look ratty and in need of a cleanup.
Ragnar [47],
That’s so people can go into the parlor, share some Asti Spumante while listening to Burt Bacharach records after a good workout.
The WSJ article is so true. The competition for the few available contract jobs is ferocious in NJ and NYC. And at the same time many of them are offering less per hour than 2 years ago – simply because they can.
There are a lot of desperate people out there…
Restore the shore…
http://www.youtube.com/watch?feature=player_embedded&v=5weU2olAl-E
47 – Always thought that the popularity of the back yard tennis court peaked in the 80s where it was looked at as a sign of wealth and success, and had nothing to do with the sport (I doubt any of these were actually used). Given the decline of the sports’ popularity, from it’s golden days to today, backyard courts are now looked at similarly to above ground pools, colloquially described as “house mullets” (all business in the front, party in the back).
Gary,
That round bed rules! Where do you buy sheets for it?
I will say this. Anyone who maintains their 50-year old furnishings to that level of perfection probably maintained the homes infrastructure similarly. That front door must be the original too.
It’s 4,000 square feet to boot. I would watch that one from afar and throw in the lowball bid after another nine months or so.
52 – New owners might prefer to go with vinyl or latex instead of 600TC combed Egyptian cotton, which would be most appropriate for that shag pad.
#27 Fast,
He sounds like he sniffed too much absestos from some of these rat trap homes…oh I mean great investments. Every city has its day in the sun- Philly, Detroit, Cleveland. I think NYC area is hearing a swan song. Finance and Pharm are leaving. They ain’t coming back. Once foreigners stop getting a 40% discount on USD conversion it will be the kill shot to RE. Juice has been squeezed to pulp dust..and being sniffed by Mike.
I talked to my bank in Manhattan about mortgages today. He said 90% of Jumbo mortgages were 5 year ARMs. Rate is 2.375%, which with a tax deduction and inflation is basically free money.
33- Alan, you totally missed my point. Every damn decade there is this same doom talk and guess what, things always fix themselves overtime. Don’t you get it by now, everything is a cycle. There’s always good times and bad times. If you think these bad times are going to last forever, you guys are crazy. No matter how bad it gets, it’s a fact that good days will be back again in time. I mean, could you imagine what the doom and gloom were saying in the 30s and 40s? Depression then wwII….they probably thought it was the end of the world. I’m just saying, I know it looks bad right now but that is what makes it a good time to buy. You think this many investment firms would have been buying up real estate because it’s going to crash and burn. They are taking in rent and are going to sell them in the next boom part of the cycle.
Bystander,
I think the NY/NJ area is always going to command somewhat of a premium. The problem I have is that there is zero job growth, zero salary growth for over a decade and taxes and expenses have skyrocketed while too many sh1heads expect peak dollar for their rat hole houses.
55- Exactly, it’s free money! Been trying to get that through people’s heads. Even at 4% for 30 years, it’s free money. To be able to borrow that kind of money for 30 years at 4% is free money, if you understand economics and business cycles. This is the best opportunity you are going to get to buy a house for a long time. You are only getting this opportunity because of the current economic cycle. We are in a bust and they have been trying to stabilize the market (which has been working in my opinion). Go take advantage while you can.
Michael [58];
Go take advantage while you can.
Great advice! How many have you bought this year?
I just bought, got a 4.625% rate on a second home, put 25% down. Historically speaking a great rate…I am with Michael on this, generally speaking. Always darkest before the dawn…
job growth, zero salary growth for over a decade
Perhaps for the middle class, but the upper income levels are not showing this trend at all.
https://njrereport.com/index.php/2013/11/15/middle-class-in-nj-sorry-to-hear-it/
# of Households in the $125-150k range – Up 3% in the last 3 years
# of Households in the $150-200k range – Up 10% in the last 3 years
# of households in the $200k and up range – Up 12% in the last 3 years
Towns you list are not middle class towns. Maybe they used to be, but they aren’t anymore. There are now 25% **MORE** households in the $125k+ category than 3 years ago, and 22% **MORE** in the $150k and up. Where do you think they all want to live?
From the link above:
The new information shows that while the state’s richest residents have prospered considerably since the recession, the state’s middle class has languished.
…
The number of households with an income of more than $200,000 has increased by 112 percent since 2000, and by more than 12 percent since the height of the recession, the most of any income bracket.
#61..the national stats I have seen indicate that the middle class is shrinking, but more folks moved to the “upper” class rather than lower…
The number of households with an income of more than $200,000 has increased by 112 percent since 2000
The number of households with an income of more than $200,000 has increased by 112 percent since 2000
The number of households with an income of more than $200,000 has increased by 112 percent since 2000
The number of households with an income of more than $200,000 has increased by 112 percent since 2000
The number of households with an income of more than $200,000 has increased by 112 percent since 2000
Homes long term appreciate at 3% so borrowing at 4% even with tax deduction is not a slam dunk.
Folks I know who have a lot of money usually bought one house pre-bubble refinanced or paid off mortgage and then put that money each month into a plain old S&P 500 fund each month.
My buddy at peak of stock market in 2007 got a 200K inheritance. They were tempted to trade up but pricing was crazy. They were tempted to go all in on stocks but though market was pricey. Instead they paid off whole mortgage in one shot and took what would have been monthly payment just kept pretending they had a mortgage and month after month put 2k a month into S&P 500 fund. Now almost 7 years late they have a large stock position. And still no mortgage.
I love houses. Only trouble with housing is there is no dollar cost averaging. You have big winners and big losers which is what excites folk.
I bought my current home back in March 2000. If instead of buying that home I just bought a 30 year NYS muni bond which was 6% at time and told broker put every interest payment into an S&P 500 fund and reinvest all dividends I would be sitting on a fortune fueled by dollar cost averaging through two huge bear markets.
Grim always says I would need to rent a place. That is true. But we are talking rental properties now so that is not the case.
Sometimes Rentals do make sense. Down by Long Beach right now If you always wanted a beach house and want rental income I see several that are “illegal” two families but legally you are allowed to have one tenant and use the second smaller place as your summer place.
Real Estate is a great hedge against inflation and for someone who wants to retire early who gets properties at right price and right mortgage rate can rent them till mortgage paid off and have them fund an early retirement
But bottom line No One who bought a house since 2002 has made any money. Heck even folks who bought a house in January 2013 are pretty underwater if they got out of stocks to buy the house as stocks are up like 23% and housing barely 3%. When you back out their mortgage costs and stuff they are like 25% down
Michael says:
November 22, 2013 at 1:35 pm
55- Exactly, it’s free money! Been trying to get that through people’s heads. Even at 4% for 30 years, it’s free money. To be able to borrow that kind of money for 30 years at 4% is free money, if you understand economics and business cycles. This is the best opportunity you are going to get to buy a house for a long time. You are only getting this opportunity because of the current economic cycle. We are in a bust and they have been trying to stabilize the market (which has been working in my opinion). Go take advantage while you can.
All my friends made under 200K in 2000 and all my friends make over 200K in 2013.
Plenty an article has been written in last few years that 200K is the new 100K and now I would say 250K is the new 100k.
The number of households with an income of more than $200,000 has increased by 112 percent since 2000
“Real Estate is a great hedge against inflation and for someone who wants to retire early who gets properties at right price and right mortgage rate can rent them till mortgage paid off and have them fund an early retirement.”
Or pay for their kids college costs, which is OUR plan. Our kids will have to pay for OUR retirement unfortunately. Only 14 years to go!
grim,
Why are so many of these “upper” class trying to recoup money? Why are they asking close to peak prices? How come they can’t absorb the loss? They’re upper class, what’s the problem? Where’s the inventory? It’s a bull market for these with some skin in the game! Where’s the metric showing a few empty rooms and one paycheck in the bank. Incomes are above $200,000… house rich, cash poor?
59- Last purchase was in dec of 2011. I currently am trying to get another property but haven’t found anything in the location I’m looking at. Looking in the athenia section of clifton for another multi. Slim pickings right now. Other problem, most lenders want 30% down for good rates. Some will go down to 25% down but you get higher rates. I’m pretty knee deep in real estate for my age. I am taking advantage of the situation right now by having 500,000 in free money loans aka 3.9% at 30 years. I took out 30 years on purpose to take advantage of the banks. Paying in cash, when you could get low rates, is for fools. You only pay cash if you have nowhere to park your money. All these fools paying in cash and not taking advantage of the low rates are insane. It makes me scratch my head as to how they even achieved the ability to buy in cash, when they are committing a business sin by paying in cash with low rates available. When the rates go up to crazy levels, that is when you buy in cash. Only time you should be buying in cash. Right now it’s all about taking advantage of the banks cheap money forced on by the fed. The icing on the cake is that prices have been going down or stagnant for the past 7 years. Why would you not take advantage of this opportunity? Seriously, why not? Get the ability to collect rent (profit) off of the banks free money. Come on, it doesn’t get better than this!
What Michael keeps missing, which JJ keeps emphasizing, is that RE is a terrible investment compared to investing in equities. Is it lower risk? Most likely. But one can’t even come close to comparing the returns. Equities have no carrying costs whatsover to boot. Since the bottom of the so-called financial implosion the DOW has gone from 7,000 to 16,000 or 130%. Since the bottom of the housing market implosion, RE has increased at best 30%. Yes, these are different time frames, but housing traditionally grows at 3% where the market traditionally grows closer to 9%.
Michael, read this article which came out at the time when RE enjoyed it’s most prosperous period ever. Then tell me why it makes sense to buy a home. And don’t give me that inflation story. We’ve been told that Zimbabwean inflation was coming next year every year since 2008. Meanwhile, interest rates continue to hit newer lows each year since 2008.
http://www.forbes.com/2005/05/27/cx_sc_0527home.html
61- Thank you grim…..well said. People are blinded by their own situation not realizing how many people are doing well in north jersey (which i keep trying to bank into some people’s heads when they complain about jersey taxes). 20,o00 dollar property taxes are shit in the bucket when you are making over 150,000 or 200,000 a year.
69- Did you leave rent out of the equation? You really have no idea how much money is to be made on multi family houses in north jersey. When I buy a multi, i could give a crap about what I paid for it. All I care about is the income it produces. The house going up in price is just helping my initial down payment investment keep up with inflation. Once again, real estate has made many tycoons. It is the best!!!!!!!!!!! Only if you know what the hell you are doing.
I guarantee you most people in NNJ with an income of 150 are struggling with 20k property taxes.
I take that back, everyone in NNJ with an income of 150 and 20 property taxes is not doing well.
When are they legalizing weed in this state? I want to grow it and apply for a farm assesment.
…everyone in NNJ with an income of 150 and 20 property taxes is not doing well.
Amen.
Grim,
…and the bulk of that jump from 100k to 200k is dual income. Women are contributing more becauae they have to. House are listed @ 2-3 times 2000 purchase price, taxes have doubled or tripled in cases and gas is 3-4 times more. Child care? Tuition? Both have doubled at least. This has rotted away any income gains you mention. Companies are not offering high paying jobs, just more 60-90k jobs and your spouse better have one as well. Not sustainable
Bystander [76],
I’ve been saying it for years now. 200K is the new 100K. It might as well be 300K. Proportionally, in exponential terms, people are in a world of hurt. Remove two paychecks and the lights go dim. Large hat, zero cattle.
Do the math…with a 150,000 income you can afford 20,000 in taxes. Don’t say you can’t. That’s bs.
#72…don’t know why someone with a $150k income is paying $20,000, isn’t guideline something like house cost max is 3 x salary so house is $450,000 and taxes at 2% or 2.5% is $9,000-$10,000?
77- fast Eddie, we call that inflation.
Michael,
You are hilarious.
You’re only rich if you have a hard perimeter, two weeks of provisions, plenty of potable water and at least 5,000 rounds of .223.
A hard wind this way blows. First people I’ll be taking out are the 200K+ drones who don’t even have a loose MRE in the basement.
#82..I bought my 90 day supply of MREs right after 9/11..they have been kept in cool and dry location…they still good or do I need to replace….?
When the SHTF, you’ll be willing to eat your pets. At that point, an aged MRE will seem like three courses at Bar Boulud.
Find me a house with 20k taxes. How much did the house cost? Oh I bet they have no mortgage. No kids, no utilities, no transportation expenses… and I bet this person doesn’t eat either.
Michael says:
November 22, 2013 at 3:19 pm
Do the math…with a 150,000 income you can afford 20,000 in taxes. Don’t say you can’t. That’s bs.
Just curious if Michael has children to support. My spouse and I got quite a “raise” when our adult children moved out. It’s amazing how much extra costs are involved when you factor them in. Luckily, our two children support themselves, leaving us to enjoy the fruits of our labor. Finally.
First people I’ll be taking out are the 200K+ drones who don’t even have a loose MRE in the basement.
You can come by the PRM and shoot the drones who will be shuffling around the Whole Paycheck parking lot waiting to buy their vegan burritos and soy ice cream.
Since this is about real estate I’m going to post a photo I took of my house last week. I saw a nearly-full moon rising just above the roof, and it looked cool.
http://postimg.org/image/n8ibjc2h1/
paying in cash when you can get the same price with a mortgage at low rates is dumb.
However, it is much more profitable for a flipper to buy homes cash as closing costs are very high for a mortgage and if you only own homes short term does not make sense.
Also many homes from bank, or homes that were flooded, or damaged can get mortgages. There is a discount to be gotten on a home you cant get a mortgage on.
Also you have a set time after closing per IRS to get a mortgage. Just cause you pay cash does not mean you cant get a mortgage. For example, near me a Sandy Damaged home can go for 175K and a fixed home can go for 370K.
You cant get a mortgage on a home with first level gutted. I have seen investors buy cash, get off the folks books do a quick 50K renovation and get tenants in all for a total of 225k. The person buying with a mortgage is paying 375k.
I bought my primary home with a mortgage. But you know what if owner knocked another 30K off in a moment I would have given him cash. My mortgage write off was only like 6k off my taxes. 30K off would be five years worth of mortgage deductions all at once.
Also lower price homes mortgages dont work as well. The investment property I bought banks want 40% down to get the low rate for homes in a flood zone. That would have left me with only like a 175K mortgage. Well it was almost 5k to get a mortgage, between closing costs, mortgage recording taxes etc, then I went back to owner as I was unsure I would even get one and he gave me another 15k off for cash if I close quick. So I started with 20K off. Back then rates were actually 3.75%
At my high tax bracket that is like at most a 4k a year write off. I rather take the lump sum five years at once.
Buying large apartment buildings homes over 400K I would say mortgage make sense nearly all the time. But homes under 300K where owner or bank is giving a big discount cash is king. My neighbor sold a house worth 300K for 175k a few week ago with whole ground floor gutter cash only. I saw the folks buying it and they are fixing it with handimen and it will be rented in a few weeks. That house should rent for $2,500 a month. With no mortgage that is a big cash stream.
Michael says:
November 22, 2013 at 2:31 pm
59- Last purchase was in dec of 2011. I currently am trying to get another property but haven’t found anything in the location I’m looking at. Looking in the athenia section of clifton for another multi. Slim pickings right now. Other problem, most lenders want 30% down for good rates. Some will go down to 25% down but you get higher rates. I’m pretty knee deep in real estate for my age. I am taking advantage of the situation right now by having 500,000 in free money loans aka 3.9% at 30 years. I took out 30 years on purpose to take advantage of the banks. Paying in cash, when you could get low rates, is for fools. You only pay cash if you have nowhere to park your money. All these fools paying in cash and not taking advantage of the low rates are insane. It makes me scratch my head as to how they even achieved the ability to buy in cash, when they are committing a business sin by paying in cash with low rates available. When the rates go up to crazy levels, that is when you buy in cash. Only time you should be buying in cash. Right now it’s all about taking advantage of the banks cheap money forced on by the fed. The icing on the cake is that prices have been going down or stagnant for the past 7 years. Why would you not take advantage of this opportunity? Seriously, why not? Get the ability to collect rent (profit) off of the banks free money. Come on, it doesn’t get better than this!
20K in taxes are high. I pay 14k a year right now total for two properties.
20K plus taxes to afford them means you are in AMT so you cant write them off.
Rags – where is your lawn boy?
RE: Fast Eddie #5-7,9,10,18,19. Do you ever post anything of value? Ever? C’mon man you have been on here since forever & always with the same hum drum sob woe was me. Housing is overpriced.. yada yada yada.. Debbie downer 24/7. Dude if you cant afford to be in Jersey go to Iowa somewhere, I dont think housing is your problem dude.
Michael. Tell me about these multi-family homes which are so profitable. I would love to learn more. I mean, the one I bought in 2004 at the non-heard of interest rate of 5.5% with 20% down was quite the deal. I bought in a private sale to avoid any realtor fees. I put down $96K and took out a $384K mortgage. Taxes are $13K. Ten years later, I have sunk $125K into improvements and maintenance and have made approximately $350K in payments to the mortgage company. So in total so far, I’ve written checks for $571K. Nine years later the home is worth $450K. So out of pocket in nine years I’ve lost $600K. Then there is rental income. I’ll be generous and say it brought in $3.5K per month or $42K per year. That’s $378,000 in taxable income.
So 9 years into my rental investment, I’ve made -$222K.
If in 2004, I put the same $96K and $125K of improvements into a DJIA ETF, I would today have $442K.
I have refinanced the loan shorter, so in 14 years I will own my home outright. Figure my rental income should cover all maintenance and payment the rest of the way. At 3% per year, my home should be worth what 684K. Subtract that from my 221K out of pocket and I will have made $463K in 25 years.
The markets been doing better than average lately so I’ll calculate a 6% return for the next 14 years. My total balance would be a little over $1,000K. Subtract out that same initial $221K and I will have made $779K in 25 years.
Now tell me again, why we should back up the truck and load into real estate?
I don’t mind it as part of a divested portfolio, especially as an inflation hedge. But you is just plain dumb if you put all of your eggs into the real estate basket to build wealth.
Ragner,
Did you turn every light on in the house on purpose or photo shop?
Nonsense. You didn’t buy anything; you rented it from the bank.
JJ the Welfare Queen says:
November 22, 2013 at 4:14 pm
I bought my primary home with a mortgage.
Re#88 Ragnar, Beautiful home – All you need is a few Deer on the front lawn.
Ragnar: That is a house I wouldn’t mind coming home to. Very nice.
Lib,
The Real Estate mogul, King Michael III, has already explained it to the peons – buy a home, government waves magic wand..voila equity. It is so simple really.
JJ,
Let me tell you another reason to pay cash – people don’t have the two year self employment history. Layoffs have forced thousands into consulting..so unless you have cash, you ain’t buying for several years. Oh, and you better hope that you get at least a year from the consulting gig..not easy, my friend.
None of this will matter when we’re roaming the country in packs and sleeping in the open.
Your King Michael is some sort of gubmint leech or happy-gas-huffing corporate lackey who still entertains the pipedream of a secure and happy future.
it was you extreme right-wingers. it was also you who did MLK. it was you conservative right-wingers who murdered RFK
anon (the good one) says:
November 22, 2013 at 9:14 am
@TheOliverStone: 50 years ago JFK was cut down. Many of you born after still don’t realize how deeply this country was set back. http://t.co/Kii5mXjsxh
Fast Eddie says:
November 22, 2013 at 9:20 am
anon (the good one),
Glad to see you agree that we need to return to more conservative values and ideas.
Just don’t respond to either knuckle head
Back1nJ3rsy,
I’m solvent, pal. Very much so, pal. Save your solemn righteousness for someone else. Ok pal?
Back1nJ3rsy,
How much are you underwater, pal?
anon (the good one),
Well, at least we can agree to disagree and write about it. You know, while we still have the chance. You know, before your people start censoring and arresting and stuff.
I am proud I am such a good market timer. I have my lucky 3.5% mortgage and somehow I am firmly in what Grim calls the 1% in NJ. According to Michael the output gap will be closed by unicorn dust and skittles. Best estimate is 2030 back to norm. Only issue is growth preventing us from getting to 3% GDP growth when the output gap will close for that 2030 date to arrive. Problem is 2% GDP growth or less is a timeline that makes most of us here pushing up daises first. Michael’s and my grandkids will look back at me and Michael like he was some kind of soothsayer as they visit his grave and sell all of his sub-prime rentals to pay their overdrawn credit cards. You don’t need to go to some fancy school in Chicago called Booth to read the tea leaves. We have Michael here working the Ouija board, after all economics and business cycles is merely bunk. Buy now or be priced out forever.
re # 102 – reaching? Sirhan is still alive, if was allowed to comment on the internet he would disagree that he is a part of the moral majority.
[102] anon
“it was you extreme right-wingers. it was also you who did MLK. it was you conservative right-wingers who murdered RFK”
I thought it was George Bush? That’s what your ilk had been saying all last year.
[100] spine
The really funny part about a TSHTF scenario is all those liberals suddenly running out to buy guns and ammo, and hiding from all the folks who are going to come looking for them.
There are certain places in this country where an Obama sticker puts you in a distinct minority. I can easily foresee those places being downright unhealthy for progressalists.
Blood needs to be spilled. And it ain’t going to be me or mine.
People making $149,999 with $20,000 property tax bills are doing just fine. They ‘re leaving NJ.
I am reminded tht this is the one year anniversary of an auspicious day in Jets history: the Buttfumble Game.
The entire history of the Jets is one long buttfumble.
True innovation in the PRM leaves dimestore urban shuckers far behind the progressive edge….also, for the record…..WTF is “art therapy”?
NY CULTURE
A Grape Palette in Montclair, N.J.
Pinot’s Palette in Montclair Was First ‘Paint-and-Sip’ in Northeast
Lettie Teague
Nov. 21, 2013 10:29 p.m. ET
Oenophiles incorporate wine into their lives many ways. But until I visited Pinot’s Palette in Montclair, N.J., I never considered combining a palette of five paint colors and three brushes with a glass of Chardonnay.
The Montclair Pinot’s Palette is one of 62 “paint-and-sip” stores nationwide and the first to open in the Northeast. The painting-lessons franchise was founded in Houston in 2009 and grew almost 400% last year alone, according to a company spokeswoman, who added that it hopes to open a store (or “studio” in company parlance) in New York sometime soon.
Colleen Carlee took a trip down to Houston and visited several franchisees before she decided to open her Pinot’s Palette in Montclair. “I’ve always been a craftsy person,” said Ms. Carlee, who worked at Bear Stearns before opening her store. The fact she wasn’t an artist was one reason she decided to invest. “It was art that I could do,” she said.
Ms. Carlee settled on a Bloomfield Avenue storefront for her location. “I wanted to be out there where people could see me—where there was a lot of foot traffic,” she said. Ms. Carlee spent almost $100,000 on the franchise fee and on renovations, furnishings and art supplies—tables, chairs, easels and paint—before opening in August. She didn’t have to outfit a bar, since it’s BYOB like most Pinot’s Palette studios.
Ms. Carlee can choose from 480 paintings from the company’s “library” to feature in the lessons—every one is created by an artist or a student hired by Pinot’s Palette. At the end of the lesson, each student has “a painting suitable for framing,” said Ms. Carlee, who keeps two copies of the painting—one that she hangs on the wall and one that she often donates for a charitable cause. There were landscapes and still lifes on display—wine bottles are particularly popular, said Ms. Carlee.
Business was slow at first, said Ms. Carlee, but the classes have slowly caught on—they last two to three hours and cost $35 and $45—and have grown crowded, particularly on weekends. Some customers drive more than two hours—from as far away as southern New Jersey or Rockland County. Almost all are women except on weekends, when more couples attend.
I asked how people drive from such distances when drinking is part of the draw. Ms. Carlee explained that her customers don’t really come to drink as much as to relax with friends or to celebrate, adding that most didn’t drink very much. And if any artist-drinkers get carried away: “There is a taxi company across the street.”
I decided I wanted to try it myself. After all, I knew I could complete at least half the program (wine drinking). I consulted Ms. Carlee’s online calendar to find a painting that I thought I could replicate. The blue hydrangeas in a teal watering can looked simple enough, and hydrangeas are one of my favorite flowers.
Ms. Carlee said that most people arrive in groups or with a friend, but I came by myself. Unlike most of Ms. Carlee’s customers, who “love to hold a glass of wine and paint,” this isn’t true of any of my friends.
Most people bring fairly modest bottles to the studio, said Ms. Carlee, so I brought a bottle of simple but pleasant Mosel Riesling that was also low in alcohol. (I didn’t want to be compromised, after all.)
The class that night included about 30 women and one man, ranging in age from their early 20s to a group of women in their mid-60s. As Ms. Carlee predicted, everyone came in pairs or a group—one woman came with a big posse and a bottle of Carlo Rossi Sangria and vodka-infused cupcakes. It was her birthday, she said.
Although Ms. Carlee had warned me that wine wasn’t a big focus, I was a bit discouraged by the quality of the choices on display—the wine equivalent of paint-by-numbers: Barefoot Mo$cato, SkinnyGirl California White (whose calorie content featured prominently on the front label) and Cavit Pinot Grigio. The best bottle, a 2009 Sancerre, belonged to two older women.
The bottles were marshaled in the back of the room on a table or in a bucket of ice so they wouldn’t get knocked over while we were painting. Most women wrote their names on their bottles to ensure there was no accidental Pinot Grigio poaching, and one woman even kept her bottle of Prosecco by her side.
The instructor was a pleasant young artist named Eve, an art therapy student at a local college. Ms. Carlee likes to employ elementary art teachers because she thinks they have the right temperament and technique. Eve explained about how the painting would work, and about the colors (on a paper plate), the brushes and the various steps. When she stopped talking, music played and we painted. When the music stopped, she was ready to instruct us again. Eve painted the picture, too.
Almost everyone had a glass of wine in hand, as Ms. Carlee had predicted, and some professed nervousness about getting the painting right, though it seemed pretty straightforward. “I’m so scared,” I overheard one Barefoot-drinking woman say when Eve instructed us to paint the spout of the watering can holding the flowers.
I took a fortifying first sip of my Riesling, and proceeded to make a complete mess of my painting. The spout of my watering can looked like a badly wrenched handle of a coffee cup, and the more I tried to fix it, the worse it got. “I’m sure it can be saved,” said Ms. Carlee cheerfully, though I was sure she was secretly horrified by the sight.
Painting and drinking may not be as dangerous as drinking and driving, but the combination—at least in my case—didn’t produce a very pretty sight.
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