From the AP/Asbury Park Press:
N.J.’s economy looking cloudy
Few encouraging signs this year
New Jersey’s economy slowed in the second half of 2005, and early 2006 offers few encouraging signs, according to reports released Tuesday.
In February, unemployment rose, housing permits declined and hours worked in manufacturing fell, the Federal Reserve Bank of Philadelphia found.
Meanwhile, the Federal Deposit Insurance Corp. reported that most new jobs in 2005 were lower-paying, rising home prices stabilized, and reduced office vacancy rates may not be sustained.
However, the monthly forecast from the reserve bank projected moderate growth for the New Jersey economy through September, noting that initial unemployment claims decreased in February while payroll employment rose.
The findings affirm that New Jersey remains in the slowest expansion since World War II, said James W. Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.
“Our conclusion is that all the national statistics show that high-end corporate America is expanding quite briskly, but it is doing that expansion almost exclusively outside New Jersey,” Hughes said.
“New Jersey has secured a reputation over the last four years of being a hostile place to do business.”
From 2000 to 2005, the state lost 118,000 high-paying office and manufacturing jobs, while adding 113,000 low-paying service jobs, Hughes said, adding, “So, not a good trade-off.”
…
“Declining sales activity coincides with a growing inventory of homes on the market and increased time required to sell them,” the FDIC report said. “A slowdown in home sales and higher inventory levels could portend an easing in appreciation rates in 2006.”
Caveat Emptor!
Grim
“Declining sales activity coincides with a growing inventory of homes on the market and increased time required to sell them,” the FDIC report said. “A slowdown in home sales and higher inventory levels could portend an easing in appreciation rates in 2006.”…………
Easing in appreciation? Is this 1984 newspeak for declines? Can’t anyone just say what something is anymore? Sigh!
I have little faith in the Associated Press, NY Times, et al, to honestly or accurately report on the economy.
If Greenspan were still in his position, he would say that the froth is subsiding.
Is that better? :)
-Richie
If the media admitted the truth, there would be a mass exodus out of real estate, which would trigger a major shock to the economy.
“Easing in appreciation”??
How about crash in prices?
Boycott overinflated prices.
25% declines at least required to get things down to just reasonable.
Got the GSMLS March sales data this morning, the trend that begun last October is continuing.
While sales were up in March, they are always up in March. Spring is here, but spring sales volume is 10-15% below what was seen in 2004 and 2005.
grim
it will be interesting to see how long realtors try to continue to spin things positively. at some point, they should realize that houses aren’t going to move unless sellers lower prices. sellers won’t lower prices as long as Realtors are blowing smoke up their a– about “easing in appreciation” and “soft landing”
Anyone else watching giant snowflakes come down today? Snow in April?
snow in April = future excuse for slow spring sales
snow in April = “easing in appreciation”
:)
FYI – anedotally things are still moving in Hoboken and Jersey City.
However, it is becoming apparent that MASSIVE supply is on the way.
The other day someone mentioned that I should put the advertisement links back up on the site, or to add a paypal link to the site, so that I might get compensated for the work and time I put into this blog.
I really don’t want to add the advertisements back, as I don’t think anyone is really interested in refinancing their mortgage, etc. I don’t want to clutter up the site with irrelevant advertisements that no one would click anyway.
As for the paypal donation link, as much as I’d love to take donations, I wouldn’t feel right doing it. I’m much to modest to hold my hand out and ask for it.
So I’ll mention this alternative.
I run another website that I’d love for everyone to visit:
anticost
It’s a deal website.. What we do is go out and find the best deals on technology gear, home goods, etc. Every day we list up what we think are the best deals going for that day. Could be digital cameras, could be laptops, could be vacuum cleaners or a GPS unit.
That site also takes alot of our time. We need to screen literally hundreds of promotions that websites are offering every day. However, we do get compensated for our work there. For every sale that goes through our site, we get a referral fee from the vendor.
So, if you want to support us, take a look at that site. Don’t go out and buy a plasma tv if you can’t afford it, I really don’t want to be a major contributor to the negative personal savings rate. But if you are looking for something, take a look at the site, you might find it there at a good price.
Caveat Emptor!
Grim
NOW IS THE TIME TO BUY BEFORE RATE GO UP ANYMORE
who can afford to buy at these ripoff prices.
The slide down continues. Don’t panic sellers. hehehe
Bob
I don’t think so anonymous 1:47. Let me guess, your a mortgage broker trying to make as many people as possible broker, right?
“I run another website that I’d love for everyone to visit:
anticost.com
It’s a deal website”
I actually visit that site every day or two — found it on your menu links.
We bought a vacuum from one of your deal links.
It would be nice if you could also link to deals for DVDs, etc, in addition to electronics!
And with sales tax going to 7%, there is even more of a reason to shop through out of state web vendors.
:)
Thanks for shopping through the site. I bought a vacuum as well, one of those fancy multicolored Dyson ones.
grim
Grim,
Maybe you could make anticost the sponsor and have one simple sponsor link, under which you could post a few unobtrusive text links to the top deals of the day from anticost?
I mean, you’re taking time away from anticost to do this so it would be legit as a sponsor of sorts.
i’d be curious to see how much NJ state taxes are derived from employees who work in NYC? that would be quite telling.
sales tax to 7%?
ROFL!
Good thing I’m movin’ to Delaware…
sales tax to 7%?
ROFL!
Good thing I’m movin’ to Delaware…
“Good thing I’m movin’ to Delaware”
What are the nicer towns in Delaware? It may be worth a look for us.
I know there are some very bad areas to avoid, but don’t know the good towns, schools, etc.
it’s clear new jerseyans buying real estate at today’s prices have a distorted view of what’s important. i’d love to see what people paid for houses in the last 2 years and their 401k/ira/pension account balances for retirement. i think this would prove by theory.
Let’s say someone paid $500,000 for a house in NNJ in 1996. First we know at that time it would be a very nice home. Fast forward to today it has roughly increased in value, in this bubble market to $1m…100% not far-fetched. With a decline of 30% from here (very probable) that same house will sell for $700k…this I believe is the best such a person can expect. I believe we will see declines more on the order of 40%…the sellers will be banks, death (even though people are living longer, we haven’t figured out how to live forever) and divorce (which should increase vis a vis money problems, people often bail) and the people who own there homes pre-2000 who will still be selling for some type of gain.
it’s clear new jerseyans buying real estate at today’s prices have a distorted view of what’s important.”
I think you’re right, but it may not have so much to do with “what’s important,” as simply feeling cheated out of the American dream.
People who make incomes in the top 5% should be able to buy a nice home, and today that’s not the case.
Instead they must buy a POS, or stretch to buy the house they feel should be theirs.
It’s not rational, but it’s not irrational either — it’s human nature.
A 500K home purchased in 1996 could theoretically be worth about 800K today, assuming a 5% annual increase. True it would probably be selling for 1 million today, so that is a 20% overvaluation.
NJ can easily absorb a sales tax rate of 7%. I’m quite surprised it was kept at 6% for so long.
And remember, there are still no taxes on clothing.
anon 5:34,
the problem is that average annual appreciation of NJ homes has been 9.7% since 1996 (see OFHEO). A $500,000 home purchased in 1996 should be worth about $1,150,000 now.
if home prices had only appreciated 5% a year, that same house would be worth about $775,000 (as you noted).
to get back to this price would require a 32% drop, or about $375,000.
can you imagine if you had just bought such a home in the last few months and then proceeded to lose more than 1/3 of a million dollars on it?
Richard,
I’ve been thinking about this very thing too the past week or two. I live in Jersey City but work in Manhattan and it’s always been that way for me since I moved here in 1989. As a result, all of my taxes go to New York and I pay nothing to New Jersey. If my apartment catches fire, the NYC fire dept won’t help me, it’l be jersey City’s FD; I play tennis in a public park in jersey city financed by tax dollars from Hudson County residents. I’m a Hudson county resident but not a taxpayer. I would prefer my state taxes go to NJ but we don’t have a choice in the matter. I wonder how much revenue NJ loses because of residents who work out of state.
Does anyone know why the set up is this way? In other words, why don’t our state taxes go to the state in which we live (rather than the state in which we work)?
If you rent, the owner of your house, building, etc pays the nj tax. It gets paid by someone, NJ isn’t losing out on the tax. Believe me, that tax is paid by you via your rent (which helps your landlord pay the tax).
You are getting screwed by NJ tax just like everyone else in the state, don’t worry!
If you rent, the owner of your house, building, etc pays the nj tax. It gets paid by someone, NJ isn’t losing out on the tax. Believe me, that tax is paid by you via your rent (which helps your landlord pay the tax).
Sorry, you’re completely wrong. NJ does lose out on wage taxes paid to NY. That is what the previous question was about, not whether renters pay tax or not. I pay the bulk of my state tax to NY, and a much smaller portion to NJ. That is the case for a lot of Manhattan workers (and possibly also for Pennsylvania).
That is why NY has a big surplus and NJ has a deficit. Even though people like me use NJ services a lot.
Grim Ghost,
Do you know why we pay our taxes to the state in which we work rather to the state in which we live? As you noted yourself, and I agree it’s true for me too, we use more services in NJ than in NY.
This link seem to fit perfectly here as well:
“The Mob That Whacked Jersey”
http://www.city-journal.org/html/16_2_new_jersey.html
anon 12:06
Great article. Thanks for posting it.
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