From Bloomberg:
`Vasectomy Housing’ Surges in New Jersey as Property Tax Remedy
New Jersey towns have figured out a way to tame the highest property taxes in the U.S.
Keep kids out.
Educating a child in New Jersey costs an average of $12,567 a year, the most in the nation and more than double the property tax parents typically pay. So local governments have hit upon a way, short of handing out contraceptives, to expand the tax base without the expense of higher enrollment: age-restricted housing.
New Jersey developers have responded by building an estimated one-fifth of the country’s adults-only housing, making the state the leader in a national trend fueled by baby boomers seeking new homes after their children move out. In New Jersey, where schools can eat two-thirds of a municipal budget and state officials have failed to provide tax relief, building communities that don’t allow kids has as much to do with reducing taxes as it does with serving older homebuyers.
“It’s frustration on the part of some communities,” said New Jersey Governor Jon Corzine in a Jan. 12 interview. “The real problem is we have too much reliance on property taxes in how we finance public education.”
Nationwide, 2.8 million households were part of age- restricted communities in 2005, up 29 percent from 2001. The number in New Jersey grew 37 percent in the same period. More than half the housing units started in the state in the past two years have excluded children, data compiled by the New Jersey Builders Association show.
…
In one New Jersey town, Monroe Township, population 28,000, half the housing units are limited to senior citizens.As many as 95,000 such units will be built in the U.S. in 2007, according to an estimate from the National Association of Home Builders. New Jersey developers will build about 20,000 of them, the state builders group said.
Towns support their school systems mostly with property tax revenue, pushing the average tab to $5,153 in 2004, the highest in the U.S. New Jersey residents are older than in most states — 12.5 percent are 65 and older, compared with the 12.1 percent average in the U.S. — and it’s the most densely populated state, with 1,165 people per square mile. New York has 408 people per square mile; Wyoming has five.
…
Other mayors, including Scott Rumana of Wayne, reject the idea that exclusionary zoning saves money, because having more senior citizens pushes up emergency response costs.Most seniors who move stay in the same towns, according to data from the AARP. They usually sell the homes in which they raised their families to homebuyers with children, negating any tax benefit. And seniors have expenses of their own, Rumana said.
“If you have a volunteer first-aid squad all of a sudden become a $15 million item in the budget, that’s what I’m worried about,” Rumana said.
Monroe Township, where half the residents are senior citizens, benefits from its older population, said Irwin Nalitt, who’s 89 and has been a councilman since he was 70.
Seniors volunteer at the recreation center, the library and in the schools. The financial boon is just too tempting, he said.
“We’ve entertained applications from developers for regular non-age-restricted housing, but we’ve steered them to senior housing,” Nalitt said.
From the AP via CentreDaily:
GMAC ResCap to cut 1000 jobs in mortgage-related business
Residential Capital LLC, the real-estate financing company owned by General Motors Acceptance Corp., said it will eliminate 1,000 positions by October as it grapples with “the continued deterioration” in the subprime mortgage sector.
The Minneapolis-based company, known as ResCap, said in a filing with the Securities and Exchange Commission that it will reduce its work force by 800 jobs and will not fill 200 open positions in its U.S. mortgage business. It has 14,000 employees worldwide.
ResCap estimated that it would incur about $10 million in severance and related costs associated with the cuts, but expects to save $65 million in 2008.
The company attributed the move to a number of factors including slower loan originations, a cooling housing market, a challenging interest-rate environment and the continued deterioration in the business of lending to people with less-than-perfect credit histories.
Detroit-based General Motors Corp. now owns 49 percent of GMAC, with the rest owned by an investor consortium led by Cerberus FIM Investors LLC.
Seems like Fitch has been on an RMBS (Residential Mortgage Backed Security) downgrade spree lately. Most recent has been subprime lender First Franklin.
Fitch Lowers 2 & Places 3 RMBS Classes on Watch Negative from 2 First Franklin Transactions
From MarketWatch:
Lennar swings to 4th-period loss on 15% lower revenue” target=”_blank
Lennar Corp., the Miami homebuilder, swung to a fourth-quarter loss from a year-earlier profit on 15% lower revenue. For the quarter ended Nov. 30, Lennar posted a loss of $195.6 million, or $1.24 a share, compared with net income of $581.2 million, or $3.54, in the year-earlier period. Revenue fell to $4.27 billion from $5.03 billion. A survey of analysts by Thomson First Call produced consensus estimates of a loss of $1.11 on revenue of $4.17 billion. Lennar said it will “continue to carefully match our starts to demand, and as a result we estimate deliveries will decline in excess of 20% in 2007″ from 2006. Profitability will drop in the first half, Lennar said in a statement, but ‘if the current environment of strong employment, low interest rates and a healthy economy continues, and the market for new homes demonstrates traditional seasonal improvement, we will meet or exceed our 2006 earnings of $3.69 per share.”
I wonder how sales are going For HOV in
West Paterson, the over 55 venue?
So much for the big jump in purchase applications last week..
Mortgage applications slip 0.6%
Refinance loans rise 6%, while purchase loans decline 7%
The number of applications filed for mortgage loans at major U.S. banks fell by 0.6% last week compared to a week earlier, as a decline in loans to buy homes offset an increase in refinancings, the Mortgage Bankers Association reported Wednesday.
The volume of applications, encompassing both refinancings and purchase loans, was up 9.8% compared with the same week a year ago.
Applications to buy a home fell 7% on a week-to-week basis and were down about 1% compared with a year ago. By contrast, sales of homes through November were down about 11%, year on year.
Applications to refinance an existing loan increased 6.3% last week and were up about 24% compared with the same week a year earlier.
Refinancings accounted for 49.9% of loan applications, up from 48.4% the previous week. That’s the highest share in five weeks.
The average rate for a 30-year fixed-rate loan rose to 6.19% from 6.13% the previous week.
The average rate for a 15-year fixed-rate mortgage rose to 5.92% from 5.85% the previous week.
The rate for a one-year adjustable-rate mortgage averaged 5.85%, up from 5.79% the previous week, the MBA’s data showed. ARMs accounted for 21.2% of loan applications, up from a 3 1/2-year low of 20.1% the previous week.
interesting article.
Producer Price Index (PPI) comes in higher than expected. From MarketWatch:
U.S. Dec. PPI up 0.9% vs. 0.6% expected
U.S. Dec. core PPI up 0.2% vs. 0.0% expected
U.S. PPI up 1.1% in 2006 vs. 5.4% in 2005
U.S. core PPI up 2% in 2006 vs. 1.4% in 2005
U.S. Dec. PPI up 0.9% on higher food, energy costs
Prices paid by U.S. producers rose 0.9% in December, led by higher energy and food costs, the Labor Department reported Wednesday. The core producer price index, which excludes food and energy prices, rose 0.2%. The increases in wholesale inflation were slightly higher than expected. Energy prices rose 2.5% in December, with wholesale gasoline prices rising 7.1%. Wholesale food prices rose 1.7%, the largest gain in more than three years. The PPI rose 1.1% in 2006, little changed from the 0.9% gain in the 12 months ending in November. The core PPI has risen 2% in the past 12 months.
I wonder how sales are going For HOV in
West Paterson, the over 55 venue?
I think that would be nice to know, as well what prices are being paid for this houses compared to other houses in the same town.
My personal anecdotal research shows not many are selling. These houses are also asking significantly large amount. I have seen one such development in Bridgewater, where 3 bedroom townhouse was asking 450K+. I wonder how many Senior citizens want to spend that kind of prices for a townhome. Generally I think this group of buyer is very cautious and have seen many ups & downs. They will tend to negotiate harder as well compared to young guns.
Is it only me who notices that no one ever talks about cutting spending?
Why don’t we regionalize the schools to the county level, like Texas does?
After all it is said and done, we can only blame ourselves for tolerating the high taxes.
Great quote from an analyst following Lennar;
“The fact that they have the confidence, even though they caveat, that they’re going to meet or exceed $3.69 a share, is ballsy to say the least,” Todd Vencil, an analyst at BB&T Capital Markets.
http://www.bloomberg.com/apps/news?pid=20601087&sid=aoxI1rXiV4_M&refer=home
SG:
I agree the complex is grossly overpriced.
As far as the towns (Clifton,W.Paterson)
wait till you see the taxes on these
overpriced boxes.
It will have several swimm pools and a
clubhouse, but , so what.
And in the words of JB, who is going to retire
to Clifton,W.Paterson.
Sapiens,
Why would they talk about cutting spending???
That would affect dual office holding [pensions], part time positions receiving pensions and zero support from tne unions.
Sorry BC Bob, I am still naive…
We discussed this late last week, some more detail from Reuters:
Banco Popular parent’s profit tumbles 54 pct
Popular Inc. (BPOP.O: Quote, Profile , Research), Puerto Rico’s largest bank, on Wednesday said fourth-quarter profit fell 54 percent, hurt by a doubling of loan losses and charges for the closing of a subprime mortgage business.
Net income for the San Juan-based parent of Banco Popular fell to $59.6 million, or 20 cents per share, from $130.2 million, or 47 cents, a year earlier.
Analysts polled by Reuters Estimates on average forecast profit of 25 cents per share. Year-over-year earnings declined for a third straight quarter.
Popular set aside $108.3 million for loan losses, up 112 percent from a year earlier and 71 percent from the third quarter. Higher delinquencies among Puerto Rico consumers and U.S. subprime mortgage borrowers hurt results.
Net chargeoffs increased 43 percent from a year earlier to $73.4 million, and nonperforming assets rose 28 percent to $802 million.
Popular, meanwhile, last week announced plans to close its subprime mortgage lending business, resulting in a loss of 627 jobs. It incurred $21.4 million of an expected $39 million of charges for the closure in the fourth quarter.
Many subprime lenders, which make loans to less creditworthy people, are struggling with increased competition, narrower margins and rising delinquencies.
Wall St. worries about inflation
Futures slip on bigger-than-expected PPI reading,
http://money.cnn.com/2007/01/17/markets/stockswatch2/index.htm?postversion=2007011708
PPI showed a 0.9 percent rise in the most recent report after jumping 2 percent in November. Economists surveyed by Briefing.com had forecast a 0.5 percent rise in the most recent reading.
The more closely watched core PPI, which strips out often volatile food and energy prices, was up 0.2 percent, compared to November’s 1.3 percent increase. Economists had forecast a 0.1 percent rise in the core PPI.
Who’s afraid of the housing crash?
http://money.cnn.com/blogs/generationrisk/
If you’ve been trying in vain to unload your house in Boston for anywhere near your original asking price, you might not want to read this. In The Economists’ Voice, Aaron Edlin argues that the housing crash might be good for some people. (Free login required. Worth the effort.)
Counterintuitively, it’s not just renters who win when real estate values fall, Edlin says. Tumbling home values can also benefit many current homeowners. Which ones? Those hoping to move to a high-priced city, or families who need to move up to get more space. Here’s the math:
A 33% drop in local real estate prices would cut the gap to $500,000. Edlin offers the crucial caveat that the price drop could temporarily wipe out the family’s equity, but adds that if they can manage the down payment on the big house, they’ll ultimately have a lower monthly mortgage payment.
Wrong title.
use
Keeping “public schooled” Kids out of Jersey
Why don’t they form their own private schools, put an end to the racket?
The superintendent, the assistant to the superintendent, the associate superintendent, the deputy assistant to the superintendent, the superintendents directs, the office of the superintendent, the administrative staff of the superintendent, the planning committee, the associate planning committe, the research and development committee, the associate research and development committee….
I’ll take a break and list the other 90% of the jobs your tax dollars go towards schools later.
Yes, it’s about the children.
If you’re a real estate clerk, Hovanian came up with a 16% co-broke for those of you who can steer dumb sheep to their shacks.
Sell a 500K shack, pocket 80K, who needs to work a regular job?
SAVE THE chick…uhh…COMPS!
If surburban NJ town School Boards keep convincing people that if they do not approve the budgets, their property values will go down, than nothing will change.
With home owners finally starting to accept that prices are declining, this will become even more prevelant.
I am also startled by the number $12K thrown around for one student education. I think this is gross oversimplification.
I think what they are doing is taking total education expenses and dividing by number of students. That will include one time costs such as new buildings etc… Also there is lot of inefficiencies as pointed out earlier by number of posts. I don’t think if number of students were to increase, the costs will rise by the given $12K per student.
I think this is just political tool to get votes. Basically, if I want to get elected as Mayor, I want to create some fear and appear as savior. So, most candidates evoke fear that if not controlled, builders will get approvals and build lot of houses, which will increase our taxes as more students enroll.
I wish someone does better research and publishes actual cost per student and what will happen if number increases.
Don’t just blame the school unions although they are extremely greedy and shameless… what about all those greedy and shameless homeowners in towns with “good schools” who will vote against losing local control as the perception without their “blue ribbions” their property values will be lower? No one is willing to make the hard decisions that will benefit more people in the long term so we are in a downward spiral that just keeps on picking up speed…
Bystander: Good point.
Corzine talks about consolidation and shared services, but also says that may be done voluntarily.
If this was voluntary, no towns with their Blue Ribbon schoold district will share or consolidate with district without ribbons.
The better thing to do would be each residents approving referendum that whether they would allow some functions done by County level superintendent or not. The county level superintendent can allocate resources at optimized level. They can better manage $13billion Abbott funds.
True districts will nto merge on therir own, and againt eh school boards will instill fear in the voters, and the voters will vote according to the directives of the scholl board.
Democracy is dangerous int eh hands of uninformed people.
Oh and by the way, the Blue Ribbon program is no longer in existence, it was scrapped by the fedeal government in the late 90’s.
And even when it was in exixtence, it was a one shot deal, the school district actually applied to the Feds’ for the designation,and if the district met those requirements, then they were awarded their blue ribbon, for that year, and that year only. Your school district had to apply to get the designation.
Oh and by the way, the Blue Ribbon program is no longer in existence, it was scrapped by the fedeal government in the late 90’s.
REALLY?!
For the last few months I have been exploring schools based on this ‘blue-ribbon’ test.
Based on this (false?) information and the stuff fed by my realtors (not one of them ever told me that blue-ribbon thing is no longer in practise) I have excluded a large number of areas.
Any further pointers bergen.. ?
I just looked up the ed.gov site:
http://www.ed.gov/programs/nclbbrs/2006/index.html
Looks like they renamed ‘blue ribbon’program the infamous ‘no child left behind’.
I am not seeing the usual suspects – East brunswick, south brunswick schools in the list. Am I missing something?
Sorry to digress from the original thread.. but this has been my single most important criteria in my search (regardless of whether I rent or buy)
“That would affect dual office holding [pensions], part time positions receiving pensions and zero support from tne unions.”
The police unions, for one, are against dual pensions and dual office/position-holding.
Rent: In fairness to the realtors, I would assume that many do not know, just as most homeowners probably do not know.
I became aware of it after attending a school board meeting a couple of years back; I was the only person there.
If a realtor tells you a school is a blue ribbon district, that so called designation depending on when they applied for it, could be 10 years or more in the past.
So you might want to ask them what year they received their so called designaion. It may have have absolutely no refelction on what the school is like today. Do not be surprised if the realtor has a puzzled look on his/her face.
#16 njrebear –
Interesting post. This is what has been keeping my landlord from selling our two-family in Montclair. He can’t afford to move anywhere desirable.
Yeah I’m looking at http://www.ed.gov/programs/nclbbrs/2006/2006-schools.pdf and I only see 4 schools listed in New Jersey. One each in Hackensack, Randolph, Plainsboro and Elizabeth.
Rent Lord, make sure you understand the eligibility rqmnts for the No Child Left Behind schools.
Either the school has to have at least 40 percent of their students from disadvantaged backgrounds that dramatically improve student performance in accordance with state assessment systems, or, it rewards schools that score in the top 10 percent on state assessments.
Seneca #31, I am begining to realize that.
hmmm.. so the blue-ribbon program is not a one-to-one mapping to the No-Child-Left-Behind (i hate that naming)program?!
ok, real basic question.
How do you really evaluate schools?
I can think of
a) class size
b) test results (any standard here?)
c) drop-out numbers
I need an education on how education really works!
d) school voucher numbers
From MarketWatch:
Existing-home sales to fall 8.1% in 2007: Fannie Mae
Sales of new and existing homes will continue their slide this year, due largely to investors pulling out of the housing market, mortgage-finance company Fannie Mae said Wednesday. In an economic and housing outlook, Fannie Mae said sales of new homes are expected to drop by 7.1% in 2007, while sales of existing homes are expected to drop 8.1% this year. Fannie economists said the projected sales for 2007 would be the lowest since 2002. The two-year drop in sales during 2006 and 2007, the economists said, would be the largest since the 1989-1991 housing downturn
I have never understood all the hoo-ha over class size. I went to a sh1tty public school in another country with class sizes of 50+. I also went to a sh1tty public university right here in the great state of New Jersey with class sizes in our intro Chem classes of near 100. I learnt a lot and any shortcomings in my education were, in hindsight, because of my own behavior (cutting class, not paying attention, etc.).
Interesting thought experiment.
Would you prefer:
1) To live in a less-expensive area, with less-than-best schools, in order to allow your spouse (or yourself) to become a stay-at-home mom or dad.
2) To live in a very expensive area, with the absolute best schools, with the caveat that both parents will return to work shortly after childbirth, relying on some sort of external child-care.
Secondly, which child do you think will be “better educated” or have “better opportunities”?
jb
It is much easier to cut class in a big class ;-) atleast I did.
I want to make sure my kid doesn’t have that luxury. LOL
On a serious note, if for any reason a kid is not doing his 100% it’s much easier to correct it… early – when the class size is small (assuming it’s a good teacher).
Talking about teachers, I will add:
e) teacher’s salary
JB,
A child who goes to the “best school” will have more opportunities, simply because the people who create opportunities tend to live in those places. It’s the difference between an MBA from Sterns vs Rutgers. You may learn a lot of RU but the movers and shakers all hang out at Sterns.
As for having a better education, that has everything to do with the childs social group and the education level of the parents, IMHO. A stay-at-home mom who doesn’t value education is not going to produce a well educated child. Again, JMHO.
It is much easier to cut class in a big class ;-) atleast I did.
I want to make sure my kid doesn’t have that luxury. LOL
On a serious note, if for any reason a kid is not doing his 100% it’s much easier to correct it… early – when the class size is small (assuming it’s a good teacher).
Good points. I was an academic late bloomer because I wasted a lot of years. Maybe that wouldn’t have happened in a smaller class.
re #36 – interesting question.
My first response was going to be #1 because part of me believes that one’s parents are more influential than the quality of a school system.
But then I thought about my own experiences. My family moved just as I finished junior high school. I went from a sub-par but not terrible school system to one of the best in the state (not NJ). I definitely think my high school impacted what college I went to and my later success. My friends from my jr. high definitely had different (and lesser) opportunities offered to them than my friends from my high school – not to say that there is a significant difference in their intelligence or their success later in life it’s just that more of my friends from high school ended up at top colleges and are now doctors and lawyers in comparison to the people from my jr. high school.
im not sure. that’s my answer.
#26
By common sense, if a school is good, it should make it to the Blue Ribbon list almost every year. It looks like the BR works like the ‘student of the month’ title that’s presented in elementary school. Where every student in the class is ‘student of the month’ for at least one month.
I would prioratize schools based on SAT scores.
Jim, at the heart of your #1 question is the much debated argument that having a stay-at-home mom is better for the kids.
regarding #2, studies show that women who want to return to work after being stay-at-home for a few years have a very hard time finding work – or take a much less satisfying job.
It may be cliche’d but bringing up kids should be a ‘village’ thing. not just for the parents.. in that light, IMHO, sending kids to external child-care is a good idea.
I know and can understand that others will strongly disagree.
Standardized test scores like the SAT get knockec a lot but I like them. They’re standardized. Uniform. And for people who claim they’re culturally biased.. why is it that so many Indian kids taking the test in New Delhi get 1600’s on it? Give me a break. It’s a test and if you’re a good test taker, that says something about you. It requires mental agility, speed and of course the ability to ‘remember’ a lot.
#36
jb,
Personally, I’ll go for an option not on your list. Get the cheapest, smaller place in the expensive neighborhood and work on just one income… assuming that housing prices are positively correlated with school standards of course.
I also think that housing prices in the more expensive towns would hold up better than the not so desirable areas in a sliding real estate market.
RentLord,
I agree about the village. Back in the old days the grandparents and extended family all helped out. It was more communal and less stressful for the parents.
With reference to SG’s post at 11:09 am, the NJ Dept of Ed. does not include capital costs in determining “comparative costs per pupil”, along with a whole raft of other costs that would result in a far higher per-pupil cost that stated.
http://www.nj.gov/njded/guide/2006/ind.shtml#ind3
BTW, was anyone around here in 1976? I seem to recall the income tax was supposed to solve this problem:)
JB/Rentlord:
Almost every study of education that has ever been made has found one single indicator that is the greatest influence on whether a child does well or not: parental involvement.
There was another study recently that looked at whether a “top school” really did make a difference as to university/success (removing issues such as parental money/connections as much as they could) and the difference was found to be negligible, surprising everyone on the study (I’ll see if I can find it).
Obviously some school districts are a disaster – such as Camden, but as long as the schools are solid and the parents stay involved, your kids will be fine.
Just remember that in the ‘top districts”, there are plenty of problems too, such as financial peer pressure, they are just different than those in the less affluent areas.
sync: What sXXity public university in NJ?
Personally, I believe many people are putting the cart before the horse. I have no expertise in this, so this is all (uneducated) opinion. That horse I talked about before, he knows more than me.
I don’t think that good schools create better educated kids at all. It’s that the kids and families in higher socioeconomic classes tend to be better educated (I’m talking averages, not exceptions). It’s the fact that many well educated kids/families are in a small area that results in the local school school doing better on testing, grad rates, etc.
Doesn’t anyone find it odd that these top schools are almost always in wealthy/expensive/high socioeconomic class areas? It’s not that wealthy areas are spending more money on schools.
It’s that wealthy families have the luxury of stay-home-moms(dads), tutoring, access to other educational opportunities, etc. It’s also that these stay at home moms/dads are typically more educated than the average.
I know there are plenty of exceptions to this, however, I see too many people that think they can simply deposit their child into the ‘best’ systems and get a well-educated kid out the other end.
I’m probably entirely wrong, and I can accept that, but I do think this is worth discussing.
jb
Inventory Data for those who care:
GSMLS
Ber, Ess, Hud, Mor, Pas, Som, Sus, Uni, War Counties
1/10 – 15,338
1/17 – 15.635 (1.6% Increase)
NJMLS
Ber, Ess, Hud, Pas Counties
1/10 – 7,259
1/17 – 7,368 (1.5% Increase)
MLSGuide
Hudson
1/10 – 2,486
1/17 – 2,310 (7% Decrease)
(Note: I don’t have any data behind the decline)
jb
Those are Single Family, Condo, Coop numbers.
jb
From MarketWatch:
Home builders a bit more optimistic in January
U.S. home builders are slightly more optimistic about the housing market and are “starting to see that the worst is behind them,” the National Association of Home Builders reported Wednesday.
The NAHB/Wells Fargo housing market index improved to 35 in January from an upwardly revised 33 in December. It’s the highest level for the sentiment index since July. A year ago, the index was at 57. The index bottomed at 30 in September.
The index shows that roughly one-third of builders are upbeat about the market. A reading over 50% would indicate that most builders were optimistic that the market is improving.
The index is created by asking builders three questions: How are sales? How is buyer traffic? And how do you expect sales to be in six months?
The index for current sales rose to 36 from 33, the index for buyer traffic rose to 26 from 23, and the index for expected sales was unchanged at 49.
Here’s an idea for school assessment: visit them, meet the principal, walk around and talk to some people there. And, if a school is evasive or discouraging of a personal visit, you’ve just learned a lot about that school.
The info and stats on the net are all dated; many reports are also- surprise- a compendium of manipulated facts that support a pre-determined conclusion.
Who’s got an “average” kid? Is your kid named “Median Percentile”? What if a school has great academics and programs…that don’t happen to work for YOUR child?
There’s no substitute for a personal, hands-on inspection.
I thought that the Fed position was that there was no “housing bubble”. What happened?
From MarketWatch:
Fed shouldn’t try to pop asset bubbles: Mishkin
The Federal Reserve shouldn’t try to prick an asset bubble, but should be prepared for possible sharp reversals in prices of homes or other assets to ensure they do not do serious harm to the economy, said Fed governor Frederic Mishkin on Wednesday.
“Because subsequent collapses of…asset prices might be highly damaging to the economy, as they were in Japan in the 1990s, should the monetary authority try to prick, or at least slow the growth of, developing bubbles? I view the answer as no,” Mishkin said in remarks prepared for delivery to the Forecaster’s Club.
But Mishkin added: “I do think that central banks can ensure that sharp movements in the prices of homes or other assets do not have serious negative consequences for the economy.”
…
Mishkin was talking hypothetically about asset bubbles. While he said there has been an extraordinary run-up in U.S. home prices over the past decade, he added it was “extremely hard to say whether they are above their fundamental value.”
I live in one of the so called BRD’s, and perception is a big part of it. The surrounding schools in surrounding towns, amny times have similar test scores, and of course some times lower.
But you have to ask yourself does a 20 to 30 point difference in test scores make that much of a difference at the end of the day?
Some of the loudest people I know as far as schools and all the rest , have kids that have performed at a mediocre level at best, in their academic pursuits. Why? I do not know, just an observation.
As far as stay at home vs not,touchy subject. but in my own opinion if mother or father can stay at home at least until the children are in school, that makes a big difference. If that might mean a so called less desireabble school, I belive it is worth it.
As far as peer pressure and all the rest, I belive it is the same everywhere now, ironically it may be even more prevelant in some of the so called lesser districts (kkeping up with the towns), as every one is rich today, and every one drives expensive cars,and every one has to have granite.
After all we are close to NYC, and that is all that matters.
Mr. Mishkin Why is it so hard to say whetehr or not they are above theri fundamental value? Can you take a stab at it, perhaps a guess?
Gee Mr Mishkin, if you guys do not know, who are we crybabywannabe homeowners/renter losers supposed to believe? David Lereah? or just our own local realtor, broker owner Missy Bobkins, after all she says she knows, but you Mr. Mishkin cannot answer; now aht did I do with Missy’s number.
James asks:
Would you prefer:
1) To live in a less-expensive area, with less-than-best schools, in order to allow your spouse (or yourself) to become a stay-at-home mom or dad.
2) To live in a very expensive area, with the absolute best schools, with the caveat that both parents will return to work shortly after childbirth, relying on some sort of external child-care.
#1, sort of.
I do NOT want the BEST schools because from what I have seen, the smart kids in these districts are under way too much pressure to be the BEST at everything, take all AP classes, be three season varsity letter earners, save third world countries from famine, etc. I absolutely don’t want the WORST schools either but would be happiest in a second tier situation. Above average but not the top 1% of NJ schools.
If you happen to have a bright kid, it could work in their favor. Instead of competing with 100 other kids for the two open slots at Yale if you are from Milburn HS or Westfield HS, you compete with 10 other kids for the one open slot at Harvard by attending a second tier HS. Yes, your kid might feel a little out of place at the Ivy on day one but s/he will adjust.
Also, it is more important to have the option, option of one parent staying-at-home than to guarantee that no parent can EVER stay at home due to a large monthly mortgage payment.
I think the only difference between which child is better educated or has better opportunities will largely depend on undergrad and post grad education as well as the good old fashioned desire. I have seen people from Top 100 colleges hustle to the top while those from Ivy League get a foot in the door but once there, squander any opportunities given them due to a sense of entitlement.
“Would you prefer:
1) To live in a less-expensive area, with less-than-best schools, in order to allow your spouse (or yourself) to become a stay-at-home mom or dad.
2) To live in a very expensive area, with the absolute best schools, with the caveat that both parents will return to work shortly after childbirth, relying on some sort of external child-care.
Secondly, which child do you think will be “better educated” or have “better opportunities”?”
Is there actually an option #1 nowadays in this area where homes are so expensive?
This is such a personal choice issue, but I have to agree with people who chose #2 – being in the better school provides better opportunities simply because the people who can offer those opportunities tend to live in those areas – generally, college educated and beyond, with good jobs, coming from good grad and undergrad schools. Connections can mean a lot, and parents with that kind of drive often are involved with their kids and “motivate” (to be nice – more often PUSH is the proper word) them to do well. And even when they don’t graduate with honors, they often still go on to good colleges and get decent jobs (seen it in my town numerous times).
Now, my question is, does this make them successful? Do I even want my kids to grow up around such people as I did? Sometimes they’re not such nice people. Sometimes their kids appear on shows like “My Super Sweet 16.” So I don’t know. I struggle with it everyday – deep down I know it’s best to offer them every chance they can get and let them take their own path from there, but sometimes I still wonder if it’s worth the effort. After all, as many have pointed out, a lot has to do with the parents and the drive of the individual child.
Interesting questions though Grim.
JB: You are right int hat many do drop their in the “best districts:, and do expect a perfect finished product when doen, however, it takes much mroe than that, and many times these peopel are jumping up and down screaming about all the taxes they pay, and therefore the teacher, should be a teacher, social worker, baby sitter, therapist, homework helper etc. etc.
I am not saying all are liek this, but i have seen it time and time again.
As far as stay at home whether it be Mom or Dad, do not assume it is all so called wealthy epople who do this.
Many like myself made the sacrifice to have one parent stay home, and we believe it paid off, with one happily away in college, and one soon to be in HS.
I am not seeing that willingness to sacrifice today, in some of the younger parents coming up.
Again observations and thing I have ssen over the years, not making blanket ststements.
“I do NOT want the BEST schools because from what I have seen, the smart kids in these districts are under way too much pressure to be the BEST at everything, take all AP classes, be three season varsity letter earners, save third world countries from famine, etc.”
This is sort of what I was talking about – my husband came from a top Westchester HS and was having a discussion with someone who pulled his kids out of there. The guy’s point was that his kids were average – the top school was good for extremely bright and motivated kids, or for really slow kids (had a good special ed program) but the normal kids got lost in the shuffle. So he pulled them out, and also pulled the extreme pressure switch – he and they are much happier now.
That said, when I told my hubby where i went to undergrad (a top liberal arts school), he told me only the “dumb” kids from his school went there (rude, I know – but I knew the kids – they WERE dumb). So there is an assumption made by many colleges that if a kid went to a top HS, even if they were middle of the road, they should be admitted the same as someone like me who went to a Catholic school (good but not like hubby’s HS) and graduated top of my class.
Why are we blaming the unions and politicians for the state of of NJ??
We are the ones to blame for electing a bunch of clowns to run trenton !!
Mendez gets funding for the organization who rents space from him at an exhorbitant rate. Is this illegal?? NO. But is it unethical?? I think so. But wait a minute Kean is republican and that’s got to be worse than being a unethical and corrupt. Correct???
NJ gets what it deserves for sending these clowns to trenton ! Unless people throw these corrupt morons out in the next election nothing will change. Our property taxes will keep going up and more people will keep getting priced out of the state.
I don’t know why I did, but I thought Corzine maybe able to make a change since he doesn’t need to make a living out of his job, but apparently the democratic party bosses are too powerful even for him.
What a shame.
Seneca: I agree, just like people who kill themselves or their kids in trying to pay for the so called best undegrad schools, when if they ened up going for an MBA or law school, that choice will be more important.
Just to show you how stupid people can be, and I am sorry i cannot think of any word to describe their rationale, but the NYT’s had an article about a school called Ursinius College, I believe in AR, good school, “reasonable tuition etc.”, but not a lot of interest, so the school dramataically raised its fees, and now 1 years expenses are over 30K a year, and its application numbers have risen dramatically.
Why people perceive that since it now costs more, than it must be better, and so all the interest.
Of course now many of the students now get financial aid to offset the costs, but the article wnet on to state that the kids who are not gettingt he aid are now subsidizing the ones who are, makes absolutely no sense, but this is today’s mind set.
Re# 36
Parental Involvement- Period. Parents know thy child.
KL
I’d prefer a third way. I would rather live in an OK school district that gave my child many opportunities of better districts at a moderate cost. If that middle ground can’t be found, I’d go for the better school district. I think you’re a fool if you’re willing to let your kids go to a poorly-rated school and you have the chance to get them out. Me being home all day doesn’t mean anything if they’re distracted by drugs, crime, overcrowding, etc. at school.
All that said, public schools should be more similar than they are. Students are entitled to excellent public education, regardless of how much their parents’ make or where they live.
The midwest sux donkey ballz.
firsttimebuyer: i do not hink anybody is advocating that their kids should be sent to schools with drugs and crime etc. I belive the converstation is between the so called best schools, vs the ones that are not considered the best, which in many wasy are almost equal to, and at times equal to the so called best.
As far as all kids being entitled to a good education, well we ahave been trying to do that with the Abbots, and after all the time and money they are still mostly failures, and that is because for the most part, the parents are failures. Harsh but true.
antitrump: I agree, I voted for Crorzine int eh belief that ebcasue of his wealth he would be beholden to no one. I too am bitterly disappointed, more of the same, as the state continues its slide to irrelevance.
Fed Beige Book is out:
Jan Beige Book
Most reports from the Federal Reserve District Banks indicated that economic activity expanded at a modest pace since the last report. The New York and San Francisco Districts reported moderate growth, while the Dallas District reported further deceleration from a high level of activity. The Minneapolis District reported slight growth. The Boston District characterized activity as mixed, and the Cleveland District saw softening activity.
Districts generally reported modest increases in retail sales, and vehicle sales were sluggish in several Districts. Tourism spending was up in a number of Districts. Reports on the service sector were generally positive; many Districts reported growth in technical, legal and information services. Manufacturing activity continued to expand in most Districts, with weakness reported mainly for products supporting the residential construction industry. Nearly all Districts reported a continued softening in housing markets, and high inventories of new homes have generally led to a slowing in residential building. In contrast to the housing sector, commercial real estate markets continued to see strong activity in most Districts. Lending activity was mixed, with commercial and industrial lending generally up while residential mortgage origination and refinancing continued to weaken. Overall weather conditions and high prices aided the agriculture sector. Energy production and exploration remained at high levels, and the alternative energy sector increased. Mining output grew.
District reports generally described labor market conditions as tightening and cited examples of some businesses having difficulty finding qualified workers. Despite expanded hiring, Districts reported relatively moderate gains in wages; however, some Districts noted certain business lines that experienced wage increases and have concerns about increases in the benefit portion of compensation. District reports indicated moderate price increases overall as prices for energy and a number of materials eased and competition kept prices for final goods in check.
…
Real Estate and Construction
Nearly all Districts reported a continued softening in housing markets. High inventories of new homes have generally led to a slowing in residential building, with some exceptions. While single-family construction weakened, New York saw multifamily permits on pace with a year earlier. In Cleveland, some builders reported a stabilizing market. Although Atlanta reported steep declines in Florida home building, activity was mixed in the rest of the District. Chicago saw smaller declines in construction than in the preceding period, with signs of recovery in the Chicago metro area. Minneapolis reported increased remodeling activity in several markets.
All Districts reported slow home sales, except for Richmond, which saw a modest increase. Decreases in home prices were reported by Boston, New York, Atlanta and Chicago, while Kansas City said prices were subdued. In contrast, Dallas reported modest price increases and San Francisco said homes were appreciating but at a slower pace. New York reported that Manhattan’s co-op and condo market improved in the fourth quarter of 2006, with flat prices but higher sales volume. Dallas noted that the low-priced home market was slower than higher-priced segments. Realtors in San Francisco were offering significant incentives to sell properties. New York reported rent increases, while Dallas noted that apartment vacancies edged up in the cities of Dallas and Houston, largely due to an exodus of Hurricane Katrina evacuees.
…apartment vacancies edged up in the cities of Dallas and Houston, largely due to an exodus of Hurricane Katrina evacuees
Are they going back to NOLA?
Why can’t we have an education system that is run at the county level, but sends students to a certain geographic location based on their residence?
Our district in PA is a combination of three distinct townships. There are four different elementary schools for the the district. Kids go to a predetermined location. The school in the less affluent part of the district appears to always have the lowest scores.
The stay-at-home parent is one indicator. But I also believe that the more affluent areas have a better sense of community and civic pride. From our experience, the more affluent parents are more involved with the schools and more responsive to teacher’s requests.
Per student spending is a poor indicator of student success. The local Catholic school spends only a fraction per student compared to our public schools. I have never seen a study that shows that public school students outperform private school students.
I agree that it is very difficult to buy a house in today’s market and then have one parent stay home with their kids. With that said, if the market follows that way other bubbles have gone (i.e., late 80s), that may again be possible.
I have stayed home with my children while working here and there. While it has been tight at times, we were able to do it because we bought in the mid 90s. I find it invaluable that I was able to be here for my children. They have had opportunities that those with both parents working have not been able to have. They do not have to go to school/day care if they are sick because I do not have to worry about my job. You can’t imagine how many kids go to school sick because their parents can’t take off from work every time they don’t feel well. They can have a lazy summer and just be kids instead of going to a structured camp every day (they do town recreation and don’t go if they don’t want to). I know where they are after school. Aftercare ends at 5th grade in our district so by middle school the kids are on their own.
I also agree with a second tier school district rather than a top school district. If your kid doesn’t thrive on competition like that in a top school district, then it might be too much for them. Our school district is second tier and the graduates go to top schools throughout the country. I myself went to this school district and went to one of the top public universities in the country for graduate school (#1 in the country for my field of study at the time – don’t know their ranking now).
Overall, I just think you need to be comfortable with your decision and make the best one for you and your family. If it means buying a little cape, staying in it forever and you want to do that, then that is great. If you want the big expensive house in the top school district, then go for it.
The governor et al are all a bunch of gutless windbags. Has anyone mentioned reduced services, layoffs, cutting spending as a way to tame the property tax monster? Considering they’re supposed to deliver their long-awaited plan in a few weeks, things seem suspiciously quiet in Trenton.
I too was hopeful Corzine was different. Don’t think he has been so far, but I suppose the jury is still out. I’m not optimistic. Plus they’ve got another $1 -2 billion hole to fill by July. That poor state Treasurer. Talk about a job from hell. Where will they get the revenue? Another .5% to the sales tax? More fees?
Shell game asset sales?
I hate to say it but it looks like we’re heading for a taxpayer revolt like Cali Prop. 13, or worse. How about a Trenton Tea party? Do they drink tea down there?
sync: In reference to #72, you just have to shake your head and ask why, ina declining market there are still somec lueless people out there.People you would think who should know better.
Institute for Luxury Home Marketing….Upper tier is defined by the Institute as the top ten percent of sales as defined by price range in a given market or $500,000, whichever is higher…said that the most expensive house sold in 2006 was in Alpine, New Jersey, about five miles from Manhattan. The English-style 10,000 square foot mansion on 63 acres with pool, tennis courts, and guest cottages sold for $58 million to the CEO of Advanced Photonix Richard Kurtz (the seller was Henry Clay Frick II.)…Record Wall Street bonuses will jump-start 2007 luxury sales in New York,” predicted Moore, “and, we’ll see spillover into other markets as well.”
http://www.mortgagenewsdaily.com/1172007_Luxury_Homes.asp
A source posted that the Richard Kurtz who purchased that property was not CEO Kurtz of Advanced Photonics, but a developer of the same name looking to subdivide that property and build a number of homes (Richard Kurtz of Kamson Corp).
jb
See:
http://www.luxuryrealestate.com/scripts/index.php?siteScript=siteNews&cat=MemberPress&ID=296
A real estate investor on Wednesday purchased a five-bedroom Alpine home on 63 acres of woods and rolling meadows for a whopping $58 million, according to the broker of the deal.
The house itself – a 7,000-square-foot Colonial – represented a fraction of the cost. It’s the vast swath of land on Closter Dock Road, north of the Alpine Country Club golf course, that justified the price – a $27 million discount from the asking price.
“It’s the most prestigious, beautiful, valuable land in the state,” said Dennis McCormack, the owner of Prominent Properties, Sotheby’s International Realty, which brokered the deal.
Few people knew the property was even on the market. McCormack marketed the property privately and solicited only buyers with the financial resources to buy it, he said.
McCormack identified the buyer as Richard Kurtz, but said he does not know what he plans to do with the site. Kurtz is the founder of Englewood Cliffs-based Kamson Corp., which manages apartments in four states.
Arthur Tassaro, a Realtor with Friedberg Properties in Cresskill, said the Alpine land might accommodate several dozen houses, which would sell for at least $5 million each. He said there is considerable demand for mansions in the town, which is just about seven miles from the George Washington Bridge and has a limited supply of housing.
“It’s gold,” said Tassaro, who was not involved in the deal. “To me, this is comparable to finding a few acres in downtown Manhattan that nobody knew about.”
lowball #17
You have that right! Public education is just another responsbility some NJ towns are trying to dump off elsewhere. I wonder what they think will happen when the pendulum of time swings the other way and companies cannot provide adequate housing for their employees with families?
on JB’s question, I would prefer option 2 but if one parent can get part time, less commute and some what flexible work at home type job.
Originally $748,000 (July 2006), now $599,000.
http://newjersey.craigslist.org/rfs/261856854.html
Originally listed at $794,900 (June 2006), now at $670,000.
http://newjersey.craigslist.org/rfs/254104667.html
Originally priced at $1,199,000 in September, but now at $772,000.
http://newjersey.craigslist.org/rfs/246689829.html
Originally listed at $899,000 (Feb 2006), now at $680,000.
http://newjersey.craigslist.org/rfs/246678201.html
I read an article in NYT trying to explain why some kids (higher social/economic background vs lower social/economic background) performed better than others. It came down to “parental involvement” but not in the sense of the parent’s being involved PTA, at the school, etc. There was a study about how elementary/ middle school age kids interacted with their parents on a 5 yr period. The parents from the lower social/economic background on average used something like 700 different words with their kids. The higher social/economic background parents used something like 1200-1400 different words. The more words used helped the kids think more “outside of the box” which facilitated greater learning and was helpful with taking tests. I don’t know if its true or not but that’s the article. Sort of like kids who play music are better math students.
Anti,
Huge price drops!!
Here’s a link to school statistics for those interested.
http://www.greatschools.net
Also, I prefer choice #1 to #2 any day of the week. Having my wife stay home is not only beneficial for my children in many aspects but economically makes sense. Child care alone would eat up my wife’s take home pay and after travel, dry cleaining, and the miscellaneous expenses we would be running at a loss. Another added benefit is the health issue. Less fast food or dine outs versus homemade meals.