From the Philly Inquirer:
With taxes flying through the roof, N.J. retirees face a painful decision
Fifty years of my life have come and gone. My youngest child has graduated from college, and my husband, who is five years my senior, is eager to retire.
I suppose it’s about time. He has worked for the same company for more than 33 years. Plus, nearly everyone we know is either on the verge of retiring or has already retired.
And although I have about five years to go before I’m eligible to retire, planning for the next phase of our lives has become foremost in my thoughts.
The question is: Where do we go from here?
As we look toward the future together, financial stability seems so far off and utterly unachievable. Living in New Jersey is taking much more out of our pockets than ever before. I’m beginning to wonder whether we should move out of New Jersey.
When I broached the subject with my husband and started some investigating, it seemed like a no-brainer. But, alas, the thought of having to leave the place we’ve called home has left us angry and disheartened.
We’d have to give up the beautiful home we worked so hard to remodel and make our own. Leaving behind friends and family is not something we’d relish, either. We always expected to live close to our children so that we could enjoy quality time with them through their adulthood. And although the idea of grandchildren seems so distant at this time, we do plan to be involved grandparents someday. Our friends? Some have said they’ll follow us wherever we go. Others, who are clearly much better off financially, plan to stay put.
Even with the property-tax-relief plan outlined in Gov. Corzine’s fiscal 2008 budget, we wouldn’t be able to manage the high cost of living on a limited, retirement income. We could save thousands of dollars if we moved to a state where taxes are a fraction of what we pay here.
…
It looks as if we, like so many others before us, must bid farewell to New Jersey and begin our lives as retirees somewhere else. We’ll become part of the exodus. Hopefully, the thousands of dollars we’ll save will enable us to travel and enjoy many more fun-filled years ahead.
This is sad. What, are all the seniors
going to collect welfare. Look, its
a welfare state anyway, why not .
Lets see,maybe corzine could give away
millions to the seniors, after all he
gave it away to the Katz woman.
From Bloomberg:
Treasuries Drop; Yield Reaches 5% for First Time Since August
U.S. Treasuries fell, pushing the 10- year yield above 5 percent for the first time since August, as traders added to bets interest rates will rise around the world.
Two-year yields also gained after New Zealand policy makers unexpectedly raised rates today and the European Central Bank lifted its benchmark to a six-year high yesterday. Futures traders added to wagers today on further increases by the ECB and the Bank of England, and reduced bets the Federal Reserve will need to lower borrowing this year to fuel economic growth.
“Investors took fright at the New Zealand move,” said Stuart Thomson, a bond fund manager at Resolution Investment Management Ltd. in Glasgow, Scotland. “Global growth is too strong, yields have to rise. The trend is bearish.”
The yield on the benchmark 10-year note rose 4 basis points to 5.01 percent as of 11:42 a.m. in London, according to bond broker Cantor Fitzgerald LP. The yield is the highest since August 15. The price of the 4 1/2 percent bond due May 2017 fell 10/32, or $3.13 per $1,000 face amount, to 96 1/16. Bond yields move inversely to prices.
Upward sloping yield curve? Who would have thought..
3m – 4.80
6m – 4.95
2y – 4.99
3y – 4.98
5y – 4.98
10y – 5.02
30y – 5.12
You could always move to a town with lower taxes…For instance, if you are a senior and want to live close to grandkids, family, etc and your River Edge house is costing 11k a year in property taxes, why not move to towns like Carlstadt or Lyndhurst where the taxes are half?
I’m not sure I know anyone that would consider Carlstadt their ideal retirement destination.
It’s not just the property taxes, but they do play a big role. A close second to that is the culture surrounding property taxes. Our state legislature has made it perfectly clear that they have no intention of trying to lower property taxes. At this point I think state residents would be satisfied with a slow down in increases. But this too, seems unlikely.
No one single factor is causing this exodus. More like a “death by a thousand cuts.”
jb
James, I am 29 and own a home in the Carlstadt area. Although the taxes are very low for Bergen County, I know I will never be able to retire in NJ based on the culture surrounding the property taxes as you mentioned. Sometimes I think I should have just rented a house because the future of NJ is..well, grim.
My Carlstadt comment came off the wrong way. Not saying anything is wrong with Carlstadt.
jb
That’s okay, I don’t live in that specific town :)
5.034…
jb
Grim (2)-
Not quite!
FFR= 5.25%
“Upward sloping yield curve? Who would have thought..”
Should Lereah get more credit than we give him. No, not his RE rubbish. He may be the ultimate market timer.
Legislature can’t fix property taxes, so they’ll waste their time worrying about PA fireworks..
Pa. asked to halt fireworks sales to N.J. residents
With the Fourth of July approaching, New Jersey lawmakers today will take up a resolution urging Pennsylvania to change its laws and stop merchants on that side of the Delaware River from selling fireworks to New Jersey residents.
…
A resolution proposed by state Sen. Peter Inverso (R-Mercer) “urges the Pennsylvania Legislature and the Governor of Pennsylvania to repeal the provision … which authorizes Pennsylvania fireworks retailers to sell consumer fireworks to out-of-State residents.”
The resolution is up for action today in the Senate Law and Public Safety committee.
retire, huh…that’s a joke.
The reality is that we will work ’til we drop. There will be no lollygagging in your “golden years”.
This is the new American dream, better get used to it.
Cheers
Almost as important as the proposed legislation that would make using a cell phone while bicycling illegal.
jb
The USSA is upon us…
“JPMorgan Chase & Co., the third- largest U.S. bank, plans to increase its commodity-trading staff worldwide by more than 30 percent in the next year to help clients protect against swings in energy and metal prices.”
“We have aggressive growth plans for commodities,” Flax said in a telephone interview from New York yesterday. The bank is building up the desk that trades physical oil and emissions credits, and the overall commodity business in Asia, she said.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aaNRk.8NMEV8&refer=home
#6 thatbigwindow Says
“Sometimes I think I should have just rented a house because the future of NJ is..well, grim.”
I have the same view and as much as I like to live in my own home, I think buying a house in NJ is a deadbeat investment given the property tax hikes that will happen and the long term decline in demand due to retirees and younger couples moving to greener pastures.
Ofcourse we will have new york employment, but I did read an article in the NY times that outside of financials, many of the jobs created in NYC in the last few years are low paying health care jobs, mostly home nursing aides who get paid approx $7.5 wo any benefits.
For now I am happy renting and making my money work else where. When I sold my house in 2005, I put most of the proceeds into large cap growth/blend stock funds. I am just blown away at the returns of some of these funds over the past two years.
On a separate note, I heard an NAR infomercial on the radio saying how a Realtor can help with the right commercial space, blah, blah. Looks like they get the drift with residential housing and are now trying to ride the next wave/bubble, commercial property.
JB- Why apologize for the Carlstadt comment? If you feel that way (Like most would I’d assume), no need to be Politically correct about it and apologize. The town is a dump for the most part.
When I’m 65, I pray that I’m not making ends meet living in Carlstadt..just give me a gun or leave the pills on the nightstand.
A little off topic – I saw a commercial this morning for a new show on NBCHD that takes you through NYC homes on the market. I was under the impression that NYC RE hasn’t really turned at all (but I have no basis for that), but this sort of thing makes me think it needs some help… or perhaps NBC is just jumping on the TLC/HGTV bandwagon.
#13
If you live modestly in your early years, contribute the maximum to your 401K and Roth, you do have a chance to retire at a reasonable age.
Let’s get a couple of things clear here. The writer lives in Cherry Hill, pricey by south Jersey standards, but not in the same class as North Jersey.
There is no doubt that property taxes do drive retirees out of NJ and I’d love to see the situation change, but what’s so special about property taxes overall? There are lots of decisions that people have to make based on changes in their financial status, this is just part of it.
Also, if property taxes really are an issue, she happens to be among the lucky few people who have a very good viable option: the exceptionally low tax state of Delaware is 40 minutes away. If her children are still in South Jersey she would still be close enough to be involved in the lives of her future grandchildren.
I maybe be coming off as a callous jerk here, but this particular sob story just doesn’t pull on my heart strings. Maybe I know too many people with real problems.
The Carlstadt comment had more to do with boomers and the entitlement philosophy than the particular town. You could probably replace most any North Jersey town and have the same effect. I’ve said the same about the Hovnanian age-restricted developments (“Who comes to Clifton/West Paterson to retire?”, etc).
I just think given the decision between NJ-Town-X and an out of state retirement destination. The out of state retirement destination carries more cachet.
jb
#22
Good point about Delaware. MUCH cheaper and not that far away.
Also what bugs me about this couple is what happened to their financial plan over the years? If they lived in a house for 33 years, it should’ve been paid off a long time ago. Throw in SS and a nice size pension from his company and they should be doing pretty well. If money burned a hole in their pocket over the years, shame on them.
It would be interesting to hear their complete financial picture…
This is truly sad. My parents are going through the same problem right now. They just can’t afford to live here anymore. If they stay it will be either way way north (Sussex) or possibly way way south (Toms River or further)
Lindsey [22],
I agree. Please, is it that difficult to take a 40 minute drive, if this alleviates a major concern. But then they’ll bitch that they will be paying too much for gas driving their gas guzzler. Please, stop the music.
I’m retiring in the Bronx. This way, I can walk to Yankee Stadium. I’ll duck when the responses come flying.
tbw: It is a shame how the taxes have destroyed River Edge, and all because a few meglomaniacs have decided we must spend more and more money on the schools, in order to keep property values high.
They instruct/frighten the voters into voting yes.
If you disagree, you are either anti- River Edge, poor or jealous, or against the kids. Many of course do disagree, but are afraid to speak out.
I gurantee you that some of the BOE memebers once their kids are done with the school system, they will move.
And meanwhile Oradell moves ahead with its plan to dissolve River Dell, and in River Edge it is not even discussed;like its not even happening.
Delaware is a very viable option for retirement, yet still being close to kids etc. Thast is of course if your kids are still living in the PRNJ.
Why, exactly, does a retiree need a 3-4 bedroom single family home?
I’m sure they could be just as comfortable in a 2 bedroom condo or townhome.
jb
Here’s my question. Considering the downward trend of NJ, what besides family is really keeping anyone here?
I am not being jerky, I would love to know because I am struggling with this every day. Is NJ that great a place to live and worth putting yourself into debt for?
Re: post 1
Pesche,
Why do you keep calling NJ a welfare state? NJ is a state people come to for work because we have a much higher standard of living than most of the rest of the country, not to get on some mythical welfare gravy train.
Exactly why is NJ a welfare state?
Sell the home, buy a condo, put the difference in a high yield cd.
Lower taxes
Less maintenance
Additional interest income to offset expenses
Where is the problem, exactly?
#30
JB- You need to know and respect that not everyone has the same tastes as you do.
Ex: My parents absolutely would not live/retire in anything except a single family home (not a TH or condo).
30 –
I agree, but I think it’s a matter of personal preference. Nearly everyone I know who has retired and then moved into a “retirement community” has purchased something bigger than what they had lived in previously. As a very personal example, my mother and step-father currently live in a 1 bedroom condo (well, two bedroom maybe, it has a loft that is used as a 2nd bedroom a lot in their development) and they are building a house elsewhere for their retirement that will be huge, with at least 3 bedrooms. i dont understand it, but it’s not my decision.
#34: and the SF Home has to be in a non-dump town. Like Upper Saddle River. Distinguished tastes
#36
Maybe your young and nieve, it has nothing to do with ‘distinguished tastes’. They’ve earned that right to want to be in a ‘modest’ single family home in their retirement years. They don’t want to be in a TH or condo type setting.
If you are not open to that idea or can’t understand it, then theirs nothing to discuss.
The issue has nothing to do with choice and everything to do with the costs associated with that choice.
We live in a high tax state. With the big home comes big taxes. Are you saying that retirees should have the big home, but not any of the taxes associated with that lifestyle?
jb
If they have the $$$ to back it, then yes they have earned the right. No one is entitled to everything though
#27 BC Bob
My Dad retired to the Bronx and loves it! Yep, the ball games, Wave Hill for a back yard, the culture trolley and the Bronx Council of the Arts, NY Botanical Garden and the Bronx Zoo! Bonus: all have great programs for when the grandkids come to visit! And, quick trip by train, bus or car to the big apple when he wants! He also does a little consulting on the side to keep himself active,there are many small non-profit organizations there that need a little assistance from experienced business people!
Let’s go Bronx! : )
Interest rates are definitely rising…we just locked in at 6.5 for our 30 year (jumbo) mortgage and consider ourselves lucky – it was only because we were both had over 760 in our credit scores – otherwise the rates we were quoted were 6.6 and higher. Not that those few little increases make much of a difference, but I would not be surprised to see it hit 7 by the end of the year.
From MarketWatch:
Whirlpool To Cut 730 Jobs At Air Control, Cooking Ops
Whirlpool Corp. said it is restructuring its North American air control and cooking operations, affecting about 730 jobs. The Benton Harbor, Mich., company said it is also negotiating a licensing pact with potential partners to manufacture, market and distribute air control products that will carry the Whirlpool brand name. Dehumidifiers and air purifiers at Whirlpool’s LaVergne, Tenn., facility are being phased out after the 2007 air control season, eliminating about 330 positions. Additionally, Whirlpool is relocating its cooking manufacturing facilities to Tulsa, Okla., and Celaya, Mexico, from Cleveland, Tenn., by the end of 2008, eliminating about 400 jobs.
I would agree that the article definitely has a tone of entitlement.
“Where is the problem, exactly?”
If you have lived and paid taxes in NJ your whole life and you want to keep your 3-4 BR single family home, you should be able to. The condo lifestyle is not for everyone.
I am glad my 60-something and 70-something year old parents still have their home; the one I grew up in. They enjoy all the socialization they would get by living in one of those barracks style-condo-shack developments in say, Boca, all while staying within the comforts of their own paid-for home. Bridge games, short drive to the gym, dinners with friends they have known since high school, Broadway shows that they get to actually see ON Broadway, etc. They worked very hard their whole lives, they didn’t refinance and use their house like an ATM, they should be able to stay put as long as they like. They have been textbook savers/investors and even they are concerned about what will happen if they live “too” long. Its absurd.
Moving into a comparable senior living development would cost much more than simply staying put.
… and yes, maybe its also for selfish reasons that I want them to stay but they have a beautiful if modest home with a nice yard. On paper, I have achieved much more than they have financially in a shorter period of time but I could barely afford to buy their house now. My kids might not have much of a yard to play in so at least going to grandma and grandpa’s will give them the chance for a good game of wiffle ball with lemonade breaks in between. There is a 100+ year old tree in the yard that serves as the perfect home plate backstop.
You may have no pity for Mrs. Angeleri but her situation doesn’t warrant a blanket statement that all seniors should just move to condo-style developments and suck it up.
Of course there should be taxes associate w/it. I’m not saying that. I’m saying the issue might not be as cut and dry as you portray it. A 150 word story does not tell you their whole financial picture and what options they might or might not be able to do.
Stiffer Subprime Rules A Two-Sided Coin
The AFSA study says that more restrictive mortgage regulation would deny credit not only to those who would actually experience a foreclosure, but also to the whole class of borrowers in a particular risk category — the vast majority of whom would otherwise use the credit successfully.
http://realtytimes.com/rtcpages/20070607_subprimerules.htm
Its a normal process. Taxes will drive ppl out and then they’ll have no one to tax.
As someone who’s about to drive over to my mother’s house (she’s 76) to make a few repairs, I’m a little appalled by the way this thread is already going. Dare I say that my mother’s worried that an upcoming re-val will raise the taxes on her subdivided lot (done in case they needed to sell the land to send the kids to college) to a point she can’t afford? Sure, she could move out of the house she, my father and grandfather built and remodeled themselves, and out of the town where she has friends and been active for 40 years if she can’t afford it because of property taxes.
Every day on this site, I’m asked to feel sympathy for young parents who can’t find a house in a town they want to live in for a price they can afford, and strangely, no one ever questions their financial planning or qualify-of-life-decision making skills. Please, people, let’s express some sympathy for seniors faced with difficult choices. And JB–and only cause your post is right above me as I’m typing–buying a condo means selling her house at a price which enables her to afford a condo, which isn’t as easy as it sounds, having run some of the numbers.
Okay. I’m off.
NJ is a welfare state. I stand by those
words. the blacks and latinos have
BK’d the state along with the pols.
stand on any street corner and view the
street walkers.
illegals have taken over.
what are you blind or you can’t read.
But one more thing before I go—and since I can see it coming—she could sell the lot (practically the only piece of open space left in the town) and live with the building of a McMansion next door. We know that, too, already.
#43, Sorry but this isn’t an entitlement issue. If you’ve worked 40-50 years of your life, played by the rules and invested wisely for your future, you should have somewhat of a say where you want to spend the rest of your years.
If we’re talking entitlement, look in the mirror a the majority of Gen X’ers and Y’s who live w/a materialistic purpose in life.
You could always move to a town with lower taxes…For instance, if you are a senior and want to live close to grandkids, family, etc and your River Edge house is costing 11k a year in property taxes, why not move to towns like Carlstadt or Lyndhurst where the taxes are half?
The taxes are too high pretty much everywhere in North Jersey. Once you figure in the transaction costs associated with the move, it probably isn’t worth moving to Lyndhurst. You are financially better off just leaving NJ.
The problem in NJ is that there is no end in sight to property tax increases. I see no stop to annual increases in the 6% per year range. Nothing has been fixed. You can move to Lyndhurst for lower taxes, but all you will really be doing is setting the clock back a few years on your tax bill. In no time, your taxes will be as much or higher than what you are currently paying.
Anti (18)-
That commercial Realtor campaign is about two years old.
BTW, agents can’t “fake it” in most commercial deals (outside simple rentals). You’ve got to understand cap rates, cash flows and how to read balance sheets and income statements. It doesn’t hurt to be able to put together a strong LOI, since many attorneys will use them- almost verbatim- to create final contracts.
That’s why there are far fewer commercial Realtors out there.
>>I’m retiring in the Bronx. This way, I can walk to Yankee Stadium. I’ll duck when the responses come flying.
when i was a young lad i attempted to take the train to columbia presbyterian hospital on 220th and broadway. i took the 4,5 line thinking get off around 220th and walk to the hospital. silly me i was on the east side and close to yankee stadium. i had a shirt, tie and briefcase (because i was going to work after) walking around the worst ghetto with entire blocks of demolished and decaying buildings. no one spoke english and had no idea what i was talking about when i said the name of the hospital i was looking for. finally i found a police station and stopped in and they dropped me off at the train. one of the cops told me i probably would’ve been robbed or worse but people thought i was a lawyer heading to a family courthouse that was a few blocks from the police station. you can’t make this stuff up.
I guess my statment is based on the fact that you’re assuming that these people have invested wisely and played by the rules.
I think what this whole discussion is showing is that is that it’s becoming very unaffordable for everyone – whether you are a young family (as mentioned in #48) or a retiree. I don’t think anyone is entitled to anything, no matter who you are. It sucks to work hard and then get very little. It doesn’t matter how old you are or what stage of life you’re in.
heres a few more lovely bergen towns to
retire to : Wallington, lodi,garfield
quality of life.
They have shooting ranges, right?
Lindsey Says:
June 7th, 2007 at 9:17 am
Re: post 1
Pesche,
Why do you keep calling NJ a welfare state? NJ is a state people come to for work because we have a much higher standard of living than most of the rest of the country, not to get on some mythical welfare gravy train.
Exactly why is NJ a welfare state?
a much higher standard of living than most of the rest of the country
Excuse me, but I would highly debate this statement
I lived in 7 other states and finally getting good paying job in NJ – by far the highest salary I ever earned, and quality of life is horrible in NJ.
Costs of living negates all the differences in salaries – just for your record go to
http://cgi.money.cnn.com/tools/costofliving/costofliving.html
I can make up to 36%!!! less money by moving to other state capitals, (not small towns in the middle of nowhere, and I am comparing to Edison region – not most expensive northern NJ) and enjoy the same living standards.
But even putting money aside:
People in NJ are Rude – plainly Rude – when you lock your Eyes with someone and smile at a person they look at you like they are going to punch you. Upset all the time, Horrible road rage from Almost any car on the road, crowds of people everywhere.
I do not see food being any better in NJ than elsewhere in the country. NJ-seans always say: we went to this city and there was nothing there as this little pizza place two blocks away from my house. Well you did not live in the other city, you just visited – you do not know little places and what is it like to live in that other city.
Culture – here you go with NYC again. NJ is a big surburb of NYC. Nothing more here.
Ocean – unless you own piece of property on the shore with beach access – you are stuck on the publick beach for 8$/person access, with about 5 million of other people. for family of 4 it is getting pretty expensive to goto the beach, and thats not counting food/gasoline/parking etc.
IF you are working on the Wall Street and making 200K+ – you won’t find similar salaries anywhere else and your statement is true.
If you have NJ job or regular NYC job – not Wall street related – you are better elsewhere.
Personally I would take any Western state over NJ with 25% salary cut anytime. Unfortunatelly outsourcing and decline in manufacturing makes it difficult for young person to compete for jobs with people who have 10-20 years of experience. Tats why I am here – nobody wanted to take this job in NJ – not because of salary, because it is in NJ. guess what – I get my work experience and will move out in a hurry.
So unless you have actually lived in those states you can not make comments about superb quality of life in NJ over the rest of the country.
Of course people from NJ always compare NJ with Alabama…. Why dont’t compare it with rural China – NJ will totally blow it away!!!
Disclaimer: I have never being in Alabama, or Luisiana – it might actually be not so bad down there ( i am sure they have nice areas).
#54 Reechard
Just like all of Manhattan, the Bronx has changed. Yep, the real estate bubble has even hit the Bronx! Fort Apache (the area you just referred to) is long gone…Maybe it’s time to take another trip to the Bronx and see how it’s changed? I remember when walking thru Times Square after dark was taking huge changes. Now the tourists are there in droves 24/7. Things change.
PS Uhm…Columbia Presbyterian is at 168 and Broadway….how did you get your directions off??
3b (29)-
RIght you are. My kids are 9 and 13. At the current rate, there’s no way they can expect to be go to school, then come back and live anywhere in NJ.
Why plan for a retirement in NJ, with the almost-certainty that our kids will be living elsewhere?
#55
Lurker- Listen, I’m not totally against what your saying if in fact they were extremely foolish managing their finances over the years. If they were, then shame on them.
I agree that NJ is headed down the wrong road and most people unfortunatly are being squeezed.
I can’t feel sorry for the people in the article, or others like them. Here’s why:
First, if they want to stay in NJ they could probably take a reverse mortgage on their home to pay their high property taxes. Why should I and other taxpayers subsidize their kids’ inheritance with property tax relief.
Second, since most of their property tax goes to pay for schools, they should be happy to pay high taxes for good schools their kids no longer use. The kids in those schools now, more than ever, need a good education so they can make a good income to pay the taxes that pay for all the entitlement programs (really forms of welfare) seniors have.
Third, seniors claim that they deserve tax relief because they do not send childred to public schools. That sounds attractive on superficial level, but has anyone ever seen a cost-benefit analysis of the impact of a senior population on taxes? Families with school age kids require alot of services and spend alot of money, generating both jobs and sales tax revenue. Seniors tend to put reletively little money into the economy and in fact use a disproportionate amount of health care resources.
BC Bob,
Re JP Morgan and oil:
http://www.ceres.org/pub/docs/Future_of_Oil.pdf
Chong Says:
June 7th, 2007 at 9:44 am
Its a normal process. Taxes will drive ppl out and then they’ll have no one to tax.
Easy – eventually taxes will be raised to 50K/years on small cape cods and more on bigger homes (in today’s money), nobody can pay taxes in NJ, – goverment takes many homes via tax liens, sells homes for cheap, pays off it’s debt with profits and lowers taxes and start all over again.
People who are screwed: last generation of home owners, who gets their homes basicallt stolen from them by state and local goverments.
How do you like this predication???
60 – well, that’s the reason why i thought there was a tone of entitlement. she didn’t argue that “we’ve lived here all our lives, invested wisely. put away more than enough money to retire on, in addition to pensions and SS and we still have to leave.” she leaves out that part, but it’s a big part of it.
by the time i am her age, i will have worked just as long, but my company doesn’t offer a pension (if i haven’t changed jobs 10 times by then) and it’s possible there will be no social security, so all i will have are our investments. period.
>>Interest rates are definitely rising…we just locked in at 6.5 for our 30 year (jumbo) mortgage and consider ourselves lucky
you didn’t shop around at your fico scores. you should’ve been able to do 6.125 or 6.25 at worst with no money down.
#61
You are assuming they have a mortgage on their home. Most likely if they’ve lived there 33 years, the house is paid off.
You make a terrible argument about most of our Prop Taxes goes to schools. Does that mean since we pay the most in the nation, we have the best schools? We can have less Property taxes and just as good schools..please don’t defend the state for that.
I didn’t read anywhere that Mrs. Angeleri was asking for property tax relief just for seniors. There are seniors who have been voting YES on school budgets for decades without having any kids in school.
The real issue is not how to keep seniors in NJ, it is how to keep residents of ALL ages from fleeing. NJ doesn’t need property tax relief in the form of subsidies that amount to right-pocket/left-pocket band-aids. NJ needs to curb spending, cut expenses, tighten the reigns. Cut the waste and yearly increases of 6% will no longer be the norm.
I was hoping some of you investors could walk be through the price-to-rent calc that you do when assessing property.
Look at this 3bd rental at the Regency Club in Livingston:
MLS 2395836 asking $3800
And this for sale in the same community:
MLS 2404895
Assume the townhouses are equivalent. There is a condo fee of $400/month and taxes are about $10,000/year.
The one-year CD rate is about 4.5%. Let’s say you could get a 30-year fixed with 20% down at 6%. Take asking price and rent as given. Assume zero price appreciation.
What is the fair price at that rent? What is the right rent at that price? How do you make that calc?
Sincere thanks,
ABA
#67
Common Sense will never rule. The politicians here are too corrupt
I forgot to add the asking price
MLS 2404895 $600,000
We live in a high tax state. With the big home comes big taxes. Are you saying that retirees should have the big home, but not any of the taxes associated with that lifestyle?
Yes, everyone should pay their fair share. I don’t think it’s unreasonable, however, for a couple that worked hard their whole life to pay for a home to have a reasonable expectation that they can continue to live in that home once they retire.
While moving to a condo makes very good financial sense in retirement, this decision shouldn’t be imposed on anyone through taxing people out of their homes.
Don’t forget, these people didn’t buy a home in PRNJ. NJ wasn’t always like this. They didn’t get into this thinking taxes would spiral out of control and they migt be forced out.
That being said, if it were me, I would suck it up, accept the reality and move to PA or Delaware. Cherry Hill is close to both. You can cut your cost of living and still be close to the kids.
Chong (47)-
A la Philadelphia.
Shrink the tax base, kill the municipality.
And nothing- NOTHING- ever brings ’em back to life. The most that places like Cleveland, Philly, Detroit, etc can hope for is to create a 10-12 block tourista zone that can provide some jollies for day-trippers and offer a reasonable assurance that they won’t get shot in the face…as long as they stay in the Disneyfied zone.
The one thing all these places share in common is that there’s no reason for them to exist anymore. So, they wilt down to a core of historic sites and tourist attractions. Perhaps we’re now in the process of making NJ irrelevant. What is this place…other than a welfare state that is most interested in self-perpetuation?
HEHE [62],
Sincere Thanks.
#61 Against the grain: You are part of the problem, with your belief, that more money on schools means better schools and higher property values.
Why should those seniors pay to subsidize your kids education?
These same seniors whose tax money built the schools in the first place.
Why should they pay for all the fluff now in schools, all the special ed, the basic skills, small group instruction, school psychologists, school social workers, and the list goes on.
None of this was available for their children.
And I am not talking about just the inner city, you should see all the nonsnese that goes in in the so called premier (Blue Ribbon) districts.
I have family and friends that are teachers in a few highly regarded school didtricts, and the waste and nonsense that goes on is incredible.
Telling a generation where many lived through the Depression, and WWII, and who lived within their means, and who avoided debt to get a reverse mortgage if they want to stay, is an incredibly ignorant comment.
From one of my weekly realtor new listing email blasts…
Dear XXXXX,
It was another active week in Montclair, with many new listings of homes going under contract with multiple offers the first weekend on the market. Don’t you think this area is one of the safest in which to invest your house dollars? Call for an appointment to see the new selections for this week.
#58 Columbia Presby’s Allen Pavillion is at 220 and B’Way (right around the corner from CU’s sports facility, Baker Field). Like NYU, don’t doubt they have a building somewhere you wouldn’t expect.
cnn – 30-year mortgage rate jumps to 6.53% this week from 6.42% a week ago, Freddie Mac says. More soon.
Keep in mind the things I might post on the main page or in the comments don’t always reflect my own personal views.
Much of the time what I post has more to do with fostering discussion (and dare I say heated argument) then expounding my own personal beliefs or agenda. I reserve the right to take point or counterpoint on a discussion simply to keep it moving and active.
Personally, I too feel my parents shouldn’t have to leave the home that my father built (yes, with his own hands) and that I grew up in. The property tax situation in this state disgusts me and all of my anger is directed at the state legislature, not the boomers or retirees.
jb
Speaking of taxes:
Forget Delaware, how about Bermuda?
Anyone know if you retire to and domicle in a real tax haven like Bermuda, will you still owe the IRS their expected cut on the tax-deferred savings you’ve accumlated over the years in IRAs, 401ks, etc?
Sassy Says:
June 7th, 2007 at 9:56 am
#54 Reechard
PS Uhm…Columbia Presbyterian is at 168 and Broadway….how did you get your directions off??
Sass: extrapolate…..
78 – yes, i think all of the anger and disgust should be towards the state, but instead we wind up in these heated generational arguments.
i’d probably feel the same way about my parents moving out of the house i grew up in if they hadn’t moved out of it when i was 15.
PA has serious tax breaks for seniors on property taxes.
My aunt lived to be 91. Her property taxes were $100 a month on a 2-bedroom ranch. She also got her prescription drugs through a state program for seniors. She said that without that, she would never have been able to make it as a widow on $800 a month in Social Security.
On the other side of it, PA has relatively high estate taxes. Her estate was modest – below $100,000, including the sale of the house – but on a rough eyeball, the percentage looked to be about 12%.
But it seemed to be a fair trade-off. She had a terrifically bad heart for years, but lived to a ripe old age in her own home. Without that state program, she never would have been able to afford her prescription drugs – and she had a lot of them.
#78
Much of the time what I post has more to do with fostering discussion (and dare I say heated argument) then expounding my own personal beliefs or agenda.
I knew it.
Al #57
I agree with a lot that he says. NJ has poor quality of life and very high cost of living.
That said – check out the Cleveland, Ohio area for comparison.
I was there for several days 2 weeks ago and drove around the entire area for hours. Much of it looked a lot like Edison, Rahway, Linden, Nutley, Clifton (northeastern NJ) with all the congestion, big manufacturing sites, strip malls, and pollution. Nothing much culturally (again, like NJ) All the stores we have here (incl. a huge Whole Foods) But also some gorgeous ritzy areas.
But real estate was dirt CHEAP – the house of your dreams would only be about $300,000 (and regular houses were $150,000 – $200,000)
So once again I feel like a NJ Sucker….
#74 3b-
while i agree with a lot of what you’re saying – i.e.- wasted money in the schools, i hope you’re not saying that seniors shouldn’t have to pay school taxes now because their kids are no longer in school. the reason they shouldn’t have to pay for “fluff” is because no one should have to pay for “fluff” – not just seniors.
Yes.. Bermuda has no capital gains tax but they kill you else where.. and to get property there is almost impossible. Parents looked into it a while back.. My father was British and they made the whole process of looking for a home difficult.
Well in nj your paying for alot of “fluff”
thats why its a welfare state.
Your paying for the “fluff”
food stamps, free health care,welfare.
S8 housing, dental (free) baby care for
the unwed, with multiple fathers.
the list goes on for the “fluff”
“you didn’t shop around at your fico scores. you should’ve been able to do 6.125 or 6.25 at worst with no money down.”
Wrong. Apparently you haven’t been mortgage hunting this week, right after the bond market took in it the a–. I had two brokers from separate places looking at over 75 banks each. And I looked at some myself.
Reechard, for future reference, Bankrate,com is not always spot on.
“Anyone know if you retire to and domicle in a real tax haven like Bermuda”
2X,
Did you ever look into buying on the island[my favorite]? If you have that much $, you will not have an issue regarding escaping taxes.
anecdotal..
I am looking in one neighborhood – 4/5 BR SFH, and all 5 houses that are for sale are retirees downsizing and moving to adult communities
#66 – It doesn’t matter if their home is paid off or not, they can still ge a reverse mortgage as long as there is equity in the home.
Believe it or not, NJ does have fairly effective public schools, once you get out of the areas with a high percentage of dysfunctional families.
My wife and I know that my daughter, who is in third grade in a NJ public school, is receiving a much better education than I did in public schools in Mt. Pleasant, Westchester County, NY and that she received in Sussex County schools. We graduated from high school about 30 years ago and she is a public school teacher, not in our daughter’s district.
#67. Good point about no band-aids. We all need to realize that in some way, shape or form we all benefit from this welfare state we live in. Before we can ask other people to give up their particular form of welfare, we should offer to give up something we benefit from or else we are just a bunch of hypocrites.
For openers, I will give up the low gasoline taxes I enjoy, even though I live in an area with virtually no mass transit and own a total of 6 motor vehicles. What will you give up?
#74 – I don’t make an argument that we should spend more money on schools to raise property values. Rasing property values is not a proper function the government.
Also, the generation that fought WWII has been paid back already. They had the GI Bill – a free education so they could raise their standard of living. I didn’t have this benefit/welfare/entitlement from my time in the military – I only fought in the Cold War.
#86 tcm No I believ eveybody should pay school taxes, but to keep increasing taxes becasue of increased reckless spending is stupidity.
That stupidity is furhter compunde when some say that if seniors cannot afford it they should move, or take a reverse mortgage, and justify theri position by saysing well the seniors had kids that went through the system.
“Also, the generation that fought WWII has been paid back already. They had the GI Bill – a free education so they could raise their standard of living.”
Actually, even my dad got that, and he was in during the Vietnam War. They paid for a lot of his law degree. So it’s not just the WWII generation that benefitted.
What options exist for keeping seniors that can’t afford the property taxes in their homes?
Heck, what about a non-senior or non-retiree that can no longer afford those taxes?
What options exist? This is a serious question.
jb
The fixed income markets are really moving…terms spreads and other spreads moving also…
10y touched 5.09%
# 49 pesche
You are just a racist…
I am black and not one member of my family is on welfare or was ever on welfare. The majority of my family owns at least two homes and / or their own businesses and my cousins as well as myself are all college educated and have good jobs. My friends also come from families like mine.
New Jersey’s welfare lines are not just filled with blacks and Latinos on welfare, there are quite a few whites getting hand outs too.
Some people do not have the opportunities and trust funds that others do. They work and may not be able to make ends meet, they should get assistance. Without them, they’re would be no one waiting on you in the restaurants, cleaning your house, working in daycares to take care of your kids….
Why don’t you just put your white cape over your head and go south and hang out with the rest of your KKK brothers.
i actually think reverse mortgages are something to think about. i don’t know enough about them, but assuming they are not a scam, why shouldn’t they be used to help seniors stay in their houses, and have a better lifestyle.
if a senior had $500K in the bank, or the stock market, who would argue that they shouldn’t use that money to supplement their retirement? would you feel sorry for them if they chose to keep it in the bank so that their children would have a big inheritance?
if a senior does not have that kind of money in the bank, but instead has it in equity in their house, what’s the difference?
#yo bro, hit a hot button.
North Carolina is great
KKK alive and well.
How many “kids” here would consider helping their parents pay property taxes in retirement?
jb
#91
I understand your biased because your wife works in the NJ public school system, but NJ’s public schools are not superior to everyone else in the nation. That’s the problem I have. You pay a ton in Property taxes and the schools aren’t superior.
“The fixed income markets are really moving…terms spreads and other spreads moving also…”
BKX.
#92 NJ has the highest property taxes int eh nation, but yet our schools rank third int he nation. One could argue that our schools should be number one.
With 1 child in 3rd grade, you are still fairly new to the system, and your thought may change as she goes further along.
I have 2 children that went through the entire k-12 system and one left. I am not complaining abou the education they received, but at the end of the day they did well, becasue of the efoorts my wife and I made. And that would have been the case even if they had not attened a Blue Ribbon school system.
I would also suggest to you that in the younger grades k-3 the public schools are much mroe effective than later on. Why? I am not sure, but have my reasons.
I might suggest that you go to a BOE meeting, and watch and listen as somteiems some very clueless people on these boards discuss topics, and throw around millions like it is nothing.
I would also point out that whetehr you belive it or not, the majortiy of people vote yes because of the belief that spending mroe money will ensure higher property values, they cannot see the bigger picture.
There are those parents and again if you got to a BOE meeting you will see, who wnat a customized education just for their child, and expect others to pay for it.
I for instance had one of my children who needed extra help in just one subject matter, we went out and got a top notch retired professor from Columbia as a tutor, we turned the situation around immediately and dramatically, and we paid for it; and it was not cheap.
I understand the seniors had the GI bill and all the rest, and I agree. However taxing them out of their homes because of out of control school spending is not the answer, nor is it fair.
And in the surburbs the majortiy of the taxes goes to the schools,and then of course the whole Abbot thing, which is another disaster.
As far as gas taxes, I have long argued that they should be much, much higher, but that will nto happen at least in NJ.
I will go even further and say I am a proponet of a flat tax, which would eliminate all deductions, including the mortgage deduction. Simple fair and cost effective.
Are 10 year T and money market yields related?
Drop the racial BS, please.
pesche
You wouldn’t be so big and bad if you weren’t hiding behind an alias, just like your bothers. People without enough balls to come out and say what they think because they know they’ll get their a** beat…enjoy the NC.
Sorry Jim… Not me.. I pay for the repairs and help out at the homestead. I want her to stay as long as she can but I grapple with the fact that she is the only on living in the house that costs 3K to heat a month. And the taxes this year went up to 55K a year. I couldn’t make a dent. She sat us down and said that in 10 years she will be out of cash. How would we feel if she took a reverse mortgage to keep the house going. We all with the exception of 3 of us are all for it. Though sometimes it gets on my nerves when she complains about the expense of the house.
Grim,
You didn’t comment when it first made the comment and because I chose to stand up, now there’s a problem. I am tired of people blaming blacks for everything… It’s people who do stupid things.
RE: Reverse Mortgages
A reverse mortgage enables older homeowners (62+) to convert part of the equity in their homes into tax-free income without having to sell the home, give up title, or take on a new monthly mortgage payment. The reverse mortgage is aptly named because the payment stream is “reversed.” Instead of making monthly payments to a lender, as with a regular mortgage, a lender makes payments to you.
http://www.reversemortgage.org/Home/tabid/63/Default.aspx
This is what I received in my email box today from an otherwise well behaved real estate agent.
“Buying in a Hot Market
In a super-active real estate market where the inventory of homes is limited and multiple offers are common, buyers should enlist the aid of a real estate agent to draft an offer that will be highly attractive to home sellers. Here are some tips for coming up with an offer they can’t refuse.
Understanding the seller is paramount. The most important factor to all home sellers is the amount of money they will receive for their property. Every homeowner wants to get top dollar for his or her home. If you are buying in a hot market and want to make a competitive offer, you should match the seller’s asking price as closely as possible. This tells the homeowner you are serious, and that you place as high a value on their home as they do.”
Have fun. I know I did.
i can’t believe pesche can still find anyone to comment on his post.
come on. you know these types… you roll your eyes and pat them on the head in real life…why waste text in this forum.
as for retirement people..its true. my family has 2 properies in NJ…both pretty nice… and the RE taxes on both are the value of their comming social security payment.
f’d up.
Why do you keep calling NJ a welfare state? NJ is a state people come to for work because we have a much higher standard of living than most of the rest of the country
1) “Welfare state” is a misnomer. I honestly don’t believe that welfare is NJ’s biggest problem. Every state has its share of poor people on food stamps. Also, no emergency room in the country will turn away someone for not being able to pay.
I think “entitlement state” is probably a better term. Most of our taxes go toward pension and bloated public employee payrolls and benefits.
2) My standard of living in NJ is definitely much lower than it would be somewhere else. If you have deep pockets or are already well established, NJ can have a fine standard of living. For me, however, I could immediately boost my standard of living by leaving (even factoring in a pay cut).
JB
There’s a shady landlord in NJ who supposedly does not pay property taxes on his properties. He waits until the local government files it’s tax lien and buys it up.
Zaklama
#111 DD: I cannot belive there are realotrs still even at this point peddling this crap. Amazing.
Chifi:
He da man, at least what I heard.
Somebody needs to go to the next auction and outbid him.
Nothing shady about HOV today.
paris hilton released , great message
52wk low?
“52wk low?”
Yes, down over 5% on huge volume.
From the AP:
Rates on 30-Year Mortgages Jump
Rates on 30-year mortgages rose for a fourth straight week, hitting the highest level in 10 months, as bond markets responded to strong employment growth.
Mortgage giant Freddie Mac reported Thursday that 30-year, fixed-rate mortgages averaged 6.53 percent this week. That was up sharply from 6.42 percent last week and represented the highest point for 30-year mortgages since they averaged 6.55 percent on Aug. 10.
…
All mortgage rates tracked by Freddie Mac showed increases this week.
Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing, rose to 6.22 percent, up from 6.12 percent last week.
Five-year adjustable-rate mortgages averaged 6.24 percent, up from 6.19 percent.
One-year adjustable mortgages rose to 5.65 percent, up from 5.57 percent last week.
rmb,
“…the house that costs 3K to heat a month. And the taxes this year went up to 55K a year..”
Are the numbers typos? …$3,000 a month to heat and $55,000 a year in property taxes?
If so, that must be one big house (?)
If this is the beginning of a trend[too soon to tell], rising rates/widening spreads we then begin Act 3 of this RE drama.
Act 1- Self Implosion
Act 2- Spigots closing, new lending requirements.
Act 3- ?
There will be a few more Act’s forthcoming before the final curtain falls.
Scribe [124],
I was wondering the same.
#91 Re: Bias- Would I seem a little less biased if I told you that I am a long time member, trustee and officer in my town’s taxpayer association, which has been in the center of controversial proposals to spend tax and bond money on things like a proposed addition to our regional high school, the construction of athletic fields and the purchase of a new fire truck by our town that many association members oppossed.
#104. I agree with your BOE comments and many teachers I know (not necessary my wife) do also. Unfortuneatly, under Federal Law many students with disabilities are entitled essentially to a customized education.
I am in favor of a flat tax, but not like Steve Forbes’ (remember him?) version where wages are taxed but invesment income is not. Both should be taxed.
#113 Any govermental benefit, even a tax deduction, is welfare in my book. Until we all recognize that we all feed from the welfare trough and we each agree to take a hit, trying to cut taxes is a waste of time.
“How many “kids” here would consider helping their parents pay property taxes in retirement?”
I would if I could afford to, but the sad reality is that with a baby on the way and a mortgage of my own to pay, plus childcare and college savings, the likelihood is that my parents will be the ones giving me money in the end. And that’s sad (although I know my parents never helped my grandmother – she really didn’t need it, as she got into senior housing and had saved like crazy – she didn’t have a high standard of living in 2007 terms but she was totally fine and comfortable and never wanted for anything). Now, the difference is my dad still works, but I think that will only continue for another 4 years at the most, if he can (he’s been ill). They don’t know what they want to do, but staying in a big house paying 18K a year in property taxes is not in the plan, that’s for sure.
From MarketWatch:
May sales better, but consumer spending is tightening
The nation’s largest retailers mostly recovered in May after April’s disastrous sales, but the results reported Thursday were choppy and provided evidence that the consumer is tightening.
With 47 of 50 retailers reporting at Thomson Financial, half missed expectations of same-store sales results, the industry’s growth benchmark of receipts rung up at stores open longer than a year.
….
For the most part, retailers bounced back from April weakness brought on by an uncomfortable combination of rainy, cold weather, higher energy prices and an absence of Easter spending — which came in March this year.
“The consumer is holding up relatively well with all things considered,” Perkins said, pointing to higher energy prices and economic concerns, “but the trend is there with comparable-store sales slowing.”
ICSC’s Niemira agreed. “There’s a pronounced slow down in spending from a year ago,” he said.
More on specific retailers at link above, Rich
A must see:
https://njrereport.com/images/lereah.gif
Hat tip to Mr. Ritholtz at The Big Picture for the image.
jb
Can $55k in real estate taxes on a residential property be possible, even in NJ? That is seriously scary and completely unjustified. That is a confiscatory tariff. Didn’t we fight a war once over taxation?
No, BC Bob, I’m a piker, wealth wise. After I win the lottery, I’ll have the checks sent to me in Bermuda. I will check out what it costs for a studio apartment on the island just for the heck of it. Let me know if you’ve got one to sell.
Can $55k in real estate taxes on a residential property be possible, even in NJ
I’ve seen North Jersey properties with taxes that exceeded $100,000.
jb
“Any govermental benefit, even a tax deduction is welfare in my book.”
[#113]
HUH?
What the hell fuels business investment? Small business/entrepreneurs are born out of investment tax credits/lower taxes. Who creates the majority of new jobs?
Tax constraints perils new job creation. Stimulus creates new enterprises that are vital to employment growth. Look at the job growth and birth of technology in the 80’s. Keep on taxing? Don’t we have enough empty containers sitting at our ports.
2x,
Do you know what it costs to jump on a jet ski with Ross Perot in the beautiful waters of Bermuda? I think i need a Rum Swizzle. By the way, Oprah was having problems getting a place in Bermuda.
The person who wrote this article, she and her husband could move to one of the myriad of “Active Adult 55 and over” communities here in Monroe, NJ. It is about all that they are building.
My #133 was in response to #127, not #113.
Retiring Boomers Key Reverse Mortgages
The reverse mortgage is an investment product that has existed for years, but retirement savings (or their lack) are pushing reverse mortgages into the mainstream…Wall Street is increasingly looking to the product as a potential industry growth engine, thanks to the 78 million baby boomers about to retire…Many have major equity in their homes but not enough savings for their retirement years…The 2006 figure was up 77% from 2005; however, the product’s penetration remains just 1% of the mortgage market — leaving lots of room to run for a growing number of lenders…A reverse mortgage takes an illiquid asset that ties up maybe 30% of clients’ wealth and does something with it.
http://americanbanker.com/article.html?id=20070606JQAMDBSN&from=inveprod
#127 Against the Grain…
Uhm, as a mom to a child with mild cerebral palsy…I can tell you she da** well doesn’t receive a “customized education.” And, no, I do not feel bad that she’s receiving a public education….Sorry, but gone are the days when children like mine would have been institutionalized for a lifetime at the tax payers’ expense. Frankly, I think it’s money well spent over the long haul, resulting in well-educated adults who CAN and DO contribute to the tax base and be productive members of society.
Sorry, but I think you needed that slap in the head, from the hand of a mom.
The abuse potential of reverse mortgages scares the hell out of me.
jb
#133
BC– this is a widely held belief among many left-wing tax geeks (e.g., law professors and policy-makers)– that a certain arbitrary percentage of all revenue/wealth is “property” of the gov’t and by “allowing” one to retain more than his “fair share” of such wealth/revenue, the gov’t is in fact giving you a “subsidy.”
See “Tax Expenditure”
http://tinyurl.com/yoj6ma
From MarketWatch:
Household borrowing at nine-year low
U.S. households were richer than ever before in the first quarter, but they were taking on less debt and pulling out less cash from their homes, the Federal Reserve said Thursday in its quarterly flow-of-funds report.
Households slowed the growth of debt to a 6% annualized rate, the slowest in nine years. Mortgage debt increased at a 6.2% pace, the slowest in eight years, the Fed said.
…
Total borrowing in the economy slowed to the weakest growth in four years, rising an annualized 7.3%. Borrowing by businesses increased 9%. Corporate borrowing increased 9.1%.
Households cut back on the equity they extracted from their homes again in the first quarter. By one simple measure, the cash that homeowners took out from new mortgages dropped to a seasonally adjusted annual rate of $151 billion in the first quarter, down from about $168 billion in the fourth quarter of 2006.
The first quarter’s tally marked the smallest amount of cashing out seen since the first quarter of 2001. Home equity extraction peaked at $575 billion in 2005.
Yes… My Mom’s is the lowest because she is in an old unrenovated home neighbor who just knocked down is 96K.. I am one of 10 kids.. The house is large but the nieghbors ALL OF THEM have new houses much larger and 1 or 2 kids in college. I think that is just insane
“Can $55k in real estate taxes on a residential property be possible, even in NJ”
The list of properties with taxes this high goes on forever. Eddie Murphy’s Englewood mansion, which is for sale, pays $250,000 a year in property taxes.
>>Reechard, for future reference, Bankrate,com is not always spot on.
who’s looking at bankrate? i just checked this morning on the rates i quoted from a broker friend of mine. maybe, just maybe you aren’t perfect in everything you do.
Mortgage equity withdrawl at a 6-year low? Wow.
jb
Also, Dr. Oz pays about $55k on his mansion. Then there is a house in Fort Lee that I found through zillow that pays $96,000 a year.
#133. I would argue that fueling business investment is not a legitimate function of the government. That kind of thinking got us into the mess we are in now. Tax revenue should be used to pay for the necessary functions of the government, not to redistribute wealth. This is true even if the wealth is to be redistributed in a way that you or I approve of and I, as a small business owner, would benefit from.
#138 I apologize if I offended you. I did not intend to imply that children with special needs should be institutionized or are not entitled to an education.If your child is not getting the level of services she requires, perhaps a good attorney could help.
I am carrying this thread over from one of the other ones so that it gets more attention:
“bergebuyer Says:
June 7th, 2007 at 9:11 am
Off topic questions for Realtors,
When you’re listing a home why wouldn’t you want to present any and every offer to your client?
I just made an offer 10% off asking and the listing agent said she didn’t want to present my offer (good thing she wasn’t on the end of some of my other 20% off offers), but she said she “had to.” My agent simply replied “yes, you have to.”
I don’t know if she was just playing hard ball or not, but I’ve encountered this previously, in some cases, I’m 99% sure the offer wasn’t presented.
What’s the downside? Your client thinks you mispriced the house? If I was selling a houe I’d rather receive a low offer than no offers at all. I feel that’s a major issue with today’s market, the sellers are high $ and the buyers are low $ and no one is doing anything to meet at a price determined by a market.
Of the houses that I’m keeping an eye the only ones that have come down in price over the last year are the ones that I’ve made an offer on. My offer (maybe the only one they’ve rec’d) has prompted price reductions and eventual sales, hell I should get a commission.
I don’t think anyone wants this market to continue to be stuck where it is now, so one side needs to make the first move. Sellers don’t want to in the event they can get a sucker to buy at their asking.
BUYERS GET OUT THERE AND MAKE YOUR LOW BIDS, MY PERSONAL EXPERIENCE HAS SHOWN THIS HAS HELPED CONVINCE SELLERS TO REDUCE THEIR PRICE!!!”
Donald Says:
June 7th, 2007 at 12:20 pm
#3,
Your analysis is completely flawed. Throwing lowballs all over the place is not going to bring down prices. I am willing to bet that, after seeing your offer, the sellers were thinking of every sing curse word to describe you with. In fact, the realtor and seller were probabaly laughing at you and wondering where they can get some of the stuff you are smoking.
The downside to presenitng a lowball is simple: The realtor knows the sellers will not accept it. Most sellers let their agent know what their rock bottom is and I am sure that your offer was well below it. Based on the number of offers you have been making, it appears that your lowball strategy is not successful. If you want to get into a house, you will need to give an offer close to askig price, or just sit on the sidelines because all you are doing is wasting your time and the time of other people.
Donald Says:
June 7th, 2007 at 12:22 pm
“BUYERS GET OUT THERE AND MAKE YOUR LOW BIDS, MY PERSONAL EXPERIENCE HAS SHOWN THIS HAS HELPED CONVINCE SELLERS TO REDUCE THEIR PRICE!!!”
How has this helped sellers lower their asking prices and buyers if all of your lowball offers were thrown into the garbage?
“The Early 1980s: Growth in Both Business and Social Tax Expenditures. Between 1980 and 1985, both business and social tax expenditures increased. Business tax expenditures rose from 2.6 to 3.1 percent of GDP, while social tax expenditures increased from 3.5 to 5.0 percent of GDP. The increase in tax expenditures came from two main sources: new and expanded tax incentives in the Economic Recovery Tax Act of 1981 (ERTA81) and economic and behavioral changes that raised the cost of tax expenditures that were in the law prior to 1980.”
“The increase in business tax expenditures between 1980 and 1985 resulted mainly from provisions in ERTA81. ERTA81 introduced a variety of new investment incentives, the most important of which were greatly accelerated depreciation allowances for machinery and equipment, commercial buildings, and residential real estate. The estimated tax expenditure on accelerated depreciation on machinery and equipment by itself increased by 0.5 percent of GDP between 1980 and 1985.”
“Tax incentives are here to stay. Tax reform proposals that eliminate all tax incentives in the name of a pure, fair, and simple tax system are not politically realistic and may do major harm to important social goals unless the goals are met by new direct spending or regulations.”
http://www.urban.org/publications/410329.html
James Bednar Says:
June 7th, 2007 at 12:26 pm
The abuse potential of reverse mortgages scares the hell out of me.jb
YEP
ouch
3-Month 4.79
2-Year 5.03
10-Year 5.12
I think it depends..Your only allowed to borrow a small percentage of your equity.. In my Moms case she is allowed to borrow 20%.
I’ve been in a few mortgage company meetings where we were condidering adding reverse mortgages to the product offering. Right now, there are only a few specialty lenders out there doing them and for good reason. In normal mortgages, you do the deal and then get checks every month. Unless you stop getting paid, there’s nothing to do. With reverse mortgages, the lender has to inspect the property once a year to verify it is being kept up. If not there’s all sorts of legal issues in getting the owner to do repairs. It’s a huge expense that will ultimately be passed on to the consumer. There were also a whole bunch of legal issues involving what happens once the person dies. Retirees, in my opinion, would be better off just taking out a no income no asset loan and living off the principal while making the payments with that money too. The effective interest rate will be much lower
Reators are required by law to present all offers to their clients that are in wiritng. That does not mean a seller is goint to accept it, of course. If you made an oral offer, then that does not have to make its way to the seller.
When you’re listing a home why wouldn’t you want to present any and every offer to your client?
It’s not a question of whether or not an agent wants to present an offer. NJ real estate licensure law mandates that all written offers must be presented, period.
jb
#153
Really? The one her advisor spoke to us about had none of those condtions (or Miss Havisham would be in deep for fix ups)
I’d love to make a joke about oral offers, but I’ll just sit back and bite my tongue instead.
jb
“Ohio Sues Seven Real Estate Companies for Pressuring Appraisers”
“The companies, based in Ohio, California, Arizona and New York, set specific estimated values on properties and communicated a desired price to appraisers, according to the lawsuits filed by Dann today. In Ohio, it’s illegal to influence an appraiser. Those sued include four mortgage brokers, two lenders and an appraiser.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aqbaAscsJavI&refer=home
Luxury homes in NJ are also taking a long time to sell. I just saw a mansion in Alpine reduced from $25 to $19 million. Another one was reduced from $13.5 to $11.8 million. Richard Kurtz better start praying because I heard he is is going to be selling a house in Alpine for $60 million in the near future.
non-NJ related, but interesting nonetheless:
William Raveis realty in CT just added a feature to their website which shows the price drops (dollar amount and % from original list) of all listings.
To me, this seems to be Raveis’ way of saying: check out your competition and drop your price to all sellers
Rates are spiking up.
Get worried grubbers each tick up reduces your bloated home price even more.
How’s the dog chow starving bunch?
hehehehehee
Ok, this is just crazy. 5.13% on the 10y.
Re post 49:
pesche Says:
…the blacks and latinos have
BK’d the state along with the pols.
stand on any street corner and view the street walkers.
illegals have taken over.
Wow.
You know, you can say whatever you want about politicians,there’s certainly a track record to point to, but the racism is disgusting. Do you actually know any blacks or latinos? Don’t answer that, it’s a rhetorical question.
Where do you live that there are streetwalkers?
I’m sure they are in someone’s neighborhood, but they aren’t in mine. (Here in Monmouth County the sex workers pretty much seem confined to the “tanning” and “massage” businesses. There have been arrests for that in my town.)
I apologize to anyone who addressed this before me, but I had to respond as soon as I saw this.
READ MY LIPS: HOUSING MARKET GOING TO FREE FALL.
NO SALES GRUBBERS BETTER START PANICKING RIGHT NOW.
HEHEHEHEHEHE
What’s moving the 10 year? Why so fast?
“Ok, this is just crazy. 5.13% on the 10y.”
Is Gross covering his longs?
“Rates are spiking up.”
Why don’t you go back to living in mommy’s basement?
http://www.mortgagenewsdaily.com/5162007_Mortgage_Rates.asp
A Nightmare for bagholders.
N-I-G-H-T-M-A-R-E
Free markets do work in both directions. The pendulum is swings hard the other way but it ain’t stopping.
i smell burnt Toast!
Okay, gang, I give up. Real estate taxes over $100k for luxury properties means I won’t be bidding on any of them. I’ll keep renting my dump, thanks. Eddie Murphy can keep his mansion.
“Once more there was little movement in the mortgage markets during the week ended May 10, especially for fixed rate mortgages (FRM).”
[167],
Hey moron that was May 10.
donnieboy sweating yet?
soon many a guru like you get taken behind the shed and spanked.
Bucking the trend can be difficult but the payoffs are magnificent.
hehehehehehe
BOOOOOOOOOOOOOYAAAAAAAAAAAAAAAA!
Bob
“i smell burnt Toast!”
Is Elvis Patterson back at the Meadowlands?
Donald Says:
June 7th, 2007 at 1:05 pm
“Rates are spiking up.”
Why don’t you go back to living in mommy’s basement?
http://www.mortgagenewsdaily.com/5162007_Mortgage_Rates.asp
Once more there was little movement in the mortgage markets during the week ended May 10, especially for fixed rate mortgages (FRM).
The 30-year FRM averaged 6.15 percent with 0.5 point compared to 6.16 percent and 0.5 point the previous week while the 15-year FRM was unchanged at 5.87 percent and 0.5 points.
And the point of referencing May10th paper with almost month old data is…..???
I think it safe to assume that the 30yr fixed will be above 7% by year end. This should Knock out around 30K of your lowball offer Donald.
Keep dreaming of 2005 prices. This was the worst spring peek season in decades. The actual inventory grew. Tha’t spells for an interesting winter.
You can find the most recent PMMS survey data here:
http://www.freddiemac.com/dlink/html/PMMS/display/PMMSOutputYr.jsp?year=2007
ICE AGE A COMING TO HOUSING…..
I CAN FEEL THE PANIC ALREADY, BUT IT WILL MOVE TO ANOTHER LEVEL REALLY REALLY SOON.
Can you feel it?
Now It’s take “at least” at a “minimum” 30% off of 2005 peak prices to make up for higher rates.
HEHEHEHEHEHE
http://www.nytimes.com/2007/06/06/business/06fed-web.html?ex=1181707200&en=66c46231615b37ae&ei=5040&partner=MOREOVERNEWS
“The signs came early, starting with a speech before the markets opened by the Fed chairman, Ben S. Bernanke, that hinted the central bank was comfortable in its current monetary policy groove of holding rates steady at 5.25 percent.”
“who’s looking at bankrate? i just checked this morning on the rates i quoted from a broker friend of mine. maybe, just maybe you aren’t perfect in everything you do.”
And I just checked with mine, a friend of the family (I suppose I should tell you that part since you put so much stock in having a broker “friend”) – on a 30 year jumbo you cannot do much better than 6.5. Maybe a 15 year you can do 6.2, but not on a 30 year.
And I am perfect:) But since it takes one to know one, you wouldn’t know.
What part of “holding rates steady” do you not understand?
“…the inventory of unsold homes continues to build, taking the housing mess further away from its final resolution.”
http://usmarket.seekingalpha.com/article/37586
By the way Reech, remember that I am in NY, in the most expensive county in the country. My mortgage rates are going to be higher than in Brigadoon, NJ.
Re post 57:
Al,
Your NJ experience and my NJ experience don’t seem to have a lot in common.
The only other place I’ve lived was San Diego, and I thought that was great too.
If you moved here after 2003, I can see how the extra money earned here gets eaten up by housing costs(though rents aren’t as bad as mortgages during that time), but that’s more bad timing than anything else.
I know it’s crowded here and the beach situation is screwed up (though all kids under 12 are free at every beach I’ve been too), but the reason it’s crowded here is because the state really does have a lot to offer, both businesses and the people who work for them.
I’ve certainly been to plenty of other places and I just haven’t seen where people here are any more rude than elsewhere. Kind of an over-generalization, don’t you think?
New Jersey is what it is, and largely, it is what you make of it, just like anyplace else. I understand completely that if your ideal is big open spaces in the middle of the country, NJ ain’t for you (unless you’ve got at least $10M), but I’m sure you didn’t expect to find cattle roaming in the fields here when you made your decision to come here.
Not promoting reverse mortgages at all…
I have to agree with you, any financial product is ripe for abuse especially when it involves senior citizens. Some of the loan programs requires some type of financial counseling before obtaining the loan. What type or quality of counseling is questionable. Reverse mortgages is forecasted to be a big product in the coming years so I’m sure it will be the next “subprime” debacle waiting to happen.
I am not so sure why everyone is bashing NJ. If the only parts of NJ you have seen are those along the Turnpike, then I understand. But get off the freaking turnpike and look at all the wonderful places. Bergen County. Hudson County waterfront (don’t go up the hill, it ain’t pretty), Princeton.
3812 lindsey: what exactly is NJ offering business today? Higher tax rates, onerous regulation? Oh I forgot close to NYC.
OMG!
The resets. KABOOOOOOOOOOOOOM!
Stay calm and pick some bones.
2008 Misery………….Coming to a hood near you.
BLEED’EM DRY.
YOU MUST BE REWARDED FOR YOUR PATIENCE AND DISCIPLINE. You earned it. Now it’s time to demand it.
BOOOOOOOOOOOOOOOOOOYAAAAAAAAAAAAAA
Bob
Bob is such a troll. I would like to know what he is snorting today.
“What part of “holding rates steady” do you not understand?”
Donald [179],
Class time moron.
Long term rates are set by the market, not the fed. The 2 year trades monetary policy, the 10 year trades inflation. Class time, are the 15/30 year fixed rates affected by the 2 year or the 10 year? What don’t you comprehend? Not surprising that you are getting crushed.
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#170 Youn Donald Only the Fed can hold SHORT TERM RATES steady. They have no control on the long end. You must understand this grasshopper.
I have been saying all year that ther would be no Fed rate cut, and in fact have said it would be more likely they raise before they cut.
3b,
[191],
Regarding Donnie:
I should be shot for wasting my time with this simpleton. [that word again]
From Bloommberg:
Dodd Challenges Bernanke to Write Tougher Loan Rules
U.S. Senate Banking Committee Chairman Christopher Dodd said the Federal Reserve must develop more aggressive consumer protections for mortgage lending, writing new regulations instead of settling for unenforceable guidelines.
“I think they’re just assuming the market is going to take care of all of this,” Dodd said yesterday in an interview in Washington. “We’re still out there without any clear rulemaking as to what’s tolerable and what’s intolerable.”
Dodd and Federal Reserve Chairman Ben S. Bernanke are at odds over how best to prevent abuse and fraud in consumer lending at a time when delinquency rates on subprime home loans have soared to a four-year high.
Fed officials prefer to promote sound lending principles through discreet channels of supervision and guidance letters. Dodd prefers “bright line” rules, which he spelled out in an April letter to Bernanke.
Dodd’s latest comments put the Federal Reserve on notice ahead of the agency’s June 14 public hearing, scheduled under pressure from the Senate chairman, to review options for strengthening mortgage lending standards. Dodd, a Connecticut Democrat who is seeking his party’s 2008 presidential nomination, has oversight authority over the Federal Reserve.
re post 88
pesche Says:
Well in nj your paying for alot of “fluff”
thats why its a welfare state.
Your paying for the “fluff”
food stamps, free health care,welfare.
S8 housing, dental (free) baby care for
the unwed, with multiple fathers.
the list goes on for the “fluff”
Exactly which states don’t have this? Almost everything you named is a federal program.
just about any place can be a great place to live if you have unlimited funds.
the question is what is the real QOL for most people in this area?
for people who are well established or wealthy, I’d agree that it is pretty high. for the rest, it doesn’t look so great to me
earth to Dodd– the market is taking care of this
BTW, BC,
Sassy hit the nail on the head when it comes to retirement in a city, and lots of seniors do it. There’s a lot going on for people with time on their hands, and they don’t have to drive.
#192 BC That Simpelton can be addictive. His comments are so outrageoues people just feel compelled to reply.
Although I still do wonder if he is legit.
Can he really be that much of a Simpleton?
I think donald meant to refer to this article on the same website…
http://www.mortgagenewsdaily.com/662007_Mortgage_Rates.asp
A collection of responses:
Living within mean,
I’m glad to see someone else said something and disappointed that more people didn’t.
JB,
What Pesche is spouting isn’t racial, its racist. My first reaction was that he’s disgusting, after the post at 100, I can see he’s truly sick.
Curiousd,
Actually, I don’t pat them on the head. I tell them they’re wrong if it seems like they’re just being foolish and I tell them they’re sick if they go where Pesche goes, and then I don’t associate with them, and I let other people know why. You can’t tolerate this crap.
Sorry, off topic.
After the end of contact with a seller agent (I am the seller), if I sell the house to someone who had been shown my house, do I need to pay commission to both agents. Thanks.
No, I am not trying to skip the agent commission if I have to. I just want to take that into account in pricing the house.
I beleive you do have to pay the commission to both agents #201
http://zfacts.com/p/461.html
>>Ok, this is just crazy. 5.13% on the 10y.
overreaction. take advantage boys. might be time to pick up some bonds for a quick trade.
njgal i can get it at 6.25%. get more generous friends.
007 I belive ther is a time frame after the listing expires, wherby if you sell the house to somebody you do have to pay the commission.
I can’t remembr if its 30 days or 90 days, perhaps JB, Clot, or Rich NNJ can answer this question.
#204 Richard: Over reaction or sign of things to come? Its a little too early to be calling it just an over reaction at this point.
Free markets don’ just go up you know. A whole new generation is going to be introduced to that cocnept.
CNN: Mortgage rates hit 10-month high
30-year fixed-rate loan hits 6.53%, highest since August, bringing more pain for battered housing market.
NEW YORK (CNNMoney.com) — Mortgage rates jumped to the highest level in 10 months after recent reports on unemployment, wage growth and labor costs fanned growing fears about a pickup in inflation, Freddie Mac said Thursday.
The average rate on 30-year fixed-rate loans climbed to 6.53 percent for the week ending June 7 from 6.42 percent the previous week, the mortgage finance firm said. Last year at this time, 30-year mortgage rates averaged 6.62 percent. The rate is the highest since Aug. 10, 2006, when it averaged 6.55 percent.
More at: http://money.cnn.com/2007/06/07/real_estate/mortgage_rates/index.htm?cnn=yes
Lindsey Says:
June 7th, 2007 at 1:17 pm
Re post 57:
Al,
Your NJ experience and my NJ experience don’t seem to have a lot in common.
The only other place I’ve lived was San Diego, and I thought that was great too.
San Diego is great… I happened to live there for a year.
If you moved here after 2003, I can see how the extra money earned here gets eaten up by housing costs(though rents aren’t as bad as mortgages during that time), but that’s more bad timing than anything else.
How about almost tripling my care insurance premium. Higher costs for medical services, higher costs for general services – do not lie to yourself that higher costs on housing only affect housing – your Car Mechanic and your Doctor need a place to live too…
I know it’s crowded here and the beach situation is screwed up (though all kids under 12 are free at every beach I’ve been too), but the reason it’s crowded here is because the state really does have a lot to offer, both businesses and the people who work for them.
Yea this state had a lot to offer 20 years ago. now manufacturing base is disappearing fast, buisnesses are struggling and moving to NJ only to abuse intitial tax breaks state offers, big pharma is leaving in a hurry to China/ India /Cheaper States.
For people NJ offers one of the highest state income taxes in the country, corruption of govermental official – but if you part of the union you are good for life.
I’ve certainly been to plenty of other places and I just haven’t seen where people here are any more rude than elsewhere. Kind of an over-generalization, don’t you think?
Are you kidding me???
New Jersey is what it is, and largely, it is what you make of it, just like anyplace else.
I would agree with this statement.
All I am questioning is your statement about NJ offering better quality of life compared to other states – I would argue that NJ is one of the lowest quality of life states right now.
I do not know how it was 10 years ago. I am here now. I also do not consider quality of life from viewpoint of someone who makes 200K+ or plainly “Independantly wealthy”.
I am considering NJ from point of view of family which makes a bit above average family income for NJ (for county we live in).
Crowdiness does affect everything one does: you have to drive everywhere – you spend x3 time getting there. You spent time in lines, you wait more for services.
Service people in NJ are generally plainly not motivated, rude and not knoweledgible about services they are suppose to provide. (why would you be motivated if you make 7$/hour, not even enough to cover small one bedroom rent in NJ after taxes???)
Of course there are exceptions, and if one moving to upscale level – I am sure service people become more and more accomodating and pleasant.
So once again do nto be kidding yourself that higher housing costs do not spill into general quqlity of life. It affect everything, and not in a good way.
3b i’m calling this an overreaction but we’ll see. my trader side takes over when i see blood in the streets ;)
#188 Donald “Bob is such a troll. I would like to know what he is snorting today.”
I don’t think a newcomer to a blog can call one of the old hands there a “troll.” Doesn’t work. Particularly if the newcomer spent his first couple days talking about how the other forum that he liked to post in was so much better than this one. Ya ever go there anymore?
Mr. Duck is such a troll that even Booya is calling him out….
Richard, you can say whatever you want on an anonymous message board – when you show me your application papers and confirm it, then I’ll believe it. Not sure why you care except to be an a–hole and act like you’re awesome, since you own already. You won’t get that rate unless there’s something shady going on. Haven’t you been reading the articles Grim has posted about rates going up on the 30 year?
I am now convinced that we are definetly on the verge of a housing crash, int rates keep rising.. No Buyers, FREEFALL here we come. I just talked to my wife and we are waiting till summer 2008 to purchase.
Re post 186:
3B, it isn’t just real estate where the top three things that matter are: location, location, location.
Look, NJ isn’t heaven, but it works for millions of people, that’s why they’re here.
Also, while property taxes in NJ are insane, the overall state/local tax burden is only marginally worse than most states.
According to the good people at the taxfoundation.org, the average per capita state/local tax burden in the U.S. is 11%. In NJ, it is 11.6%, obviously nothing to write home about, but not earth shatteringly bad either.
As is obvious, far more of our state/local taxes are collected through property taxes than just about anyplace else (Connecticut is pretty close, actually). It is more of a problem with the system of collection than anything else, though I am well aware that there are a great many things that the state could do to cut costs.
I’ve mentioned it before, but it’s worth repeating — outside of the schools, the No. 1 thing your property taxes are paying for is cops. One of the biggest things you can do to save money is consolidate police forces.
#214 Greg Smart move, your decesion will be vindicated.
#215 Lindsey: I agree with the idea of consolidation of police departments, but they will fight it tooth and nail.
To have lets say 2 small towns with a population of under 20k, with a combined police force 0f 45, and 2 Police chiefs,a nd multiple Captains and Sgts is insane. And of course all the equipment.
My bone with property taxes is that they are destroying the states competitveness, and there are no real ways to protect ones self form the yearly onslught of increases.
All the things that made NJ more desireable vs surrounding states is disappearing, and hence my concern about its viability going forward.
By the way I love this state;its why I care.
Greg,
a mild increase in interest rates will not send Re into a crash. Rates were higher in Aug last year and nothing happened.
In my opinion, there will not be a frenzy unless interst rates go up to 9% or we get into a recession.
If both happen then watch oout. If you are saving the difference between rent and potential mortgage+5% return on you DP then my friend sit on the side lines as long as you can. You will be well rewarded.
3210 Richard No problem. I have not lost my trader instincts either, but then I ahev seen both up amrkets and ugly,ugly down markets.
Just stay consistent, because in some of your past posts I have gotten the impression that when the market was going up, that was nevwe an over reaction,just like much of the upsurge was based on the msitaken belief the Fed would cut this year.
Reactions can also be on the upside, as well as the down side.
#2128 MM Trust me, when people see 30 yr mtg money at 7% or more, to many of them that will be a recession.
If inventory is rapidly increasing now, what happens when 30 yr mtg is 7%?
Re post 209:
Al,
I’m not kidding myself about the role housing costs play in making NJ a more expensive place to live. The other things you mentioned play a part, but if you compare housing costs here to almost anyplace else the difference is huge, and that difference is what makes up about 80% of the cost differential between here, and say, North Carolina, everyone’s favorite destination.
For the record, my financial situation sounds quite similar to yours; I was just lucky enough to buy my house in 1999 (in a town with relatively low taxes). Also, I work very close to home so I’m really not able to comment on the roads/driving situation.
You need to let the density in NJ work for you, not against you.
BTW, the biggest mitigating factor in the high cost of living in NJ is the gasoline tax, far lower than almost every other state.
May GSMLS inventory has now eclipsed the peak set last year.
More details tomorrow morning.
jb
#21
“If you live modestly in your early years, contribute the maximum to your 401K and Roth, you do have a chance to retire at a reasonable age.”
Sorry for my pessimism on the retirement issue, but that maxim can be thrown out the window for people under 50.
In the past we’ve had huge economic advantages – those advantages don’t exist anymore, the playing field has leveled. I personally don’t expect the time-value of money proposition to continue to function much longer in a global economy fraught with this much competition and volatility.
At this point in time, in this great country, the average 30-something parent of three young children should expect very little of their nest egg to last in the next thirty years. If the dollar keeps going in the direction it’s going, the large numbers in your portfolio may not be adequate to fund the all inclusive, best-fed retirement. My peers will be known as the Ramen Noodle Retirement generation (GEN-RNR). Also factor in health care costs, demographics of an aging population, geo-political expense of maintaining Bushista’s empire, and the legacy of Viagra & Levitra, I’ll never get any rest.
Cheers
“May GSMLS inventory has now eclipsed the peak set last year”
Courtesy of the Heads;
Hold tight wait till the partys over
Hold tight were in for nasty weather
There has got to be a way
Burning down the house
Heres your ticket pack your bag: time for jumpin overboard
The transportation is here
Close enough but not too far, maybe you know where you are
Fightin fire with fire
All wet
Hey you might need a raincoat
Shakedown
Dreams walking in broad daylight
Three hun-dred six-ty five de-grees
Burning down the house
3B, #220
The difference between 6.5% and 7.0% on a half of million mortgage is $160 per month.
not a deal breaker. Agree?
MM Nj Gal was quoted 6.50 for FRM, CNN says the national average is 6.53, according to HSH Aaccociates the national rate was 6.63 in August of 06.
And remember at that time there was of course much talk of the Fed easing etc.
Here we are with just about 1 month left in the wash out Spring selling season, and interest rates are on their way up, with Fed easing not happening this year, and inflation being more of a concern every day.
All around not good for housing (sellers),and a dramtic shift in market psychology.
#224 $160 a month will in my opinion be a deal breaker for a lot of people, and I do think you need to keep in mind the markey psychology of having 30 FRM being quoted with a 7 handle; it will make a difference.
On the Tax front, I think one has to consider factor of how much federal tax dollars are spend back in the state. I was astounded, NJ is 50th rank of percentage of federal money spent back in the state. The #1 rank is for New Mexico. So basically, not much federal help coming to NJ, hence state & local taxes will remain high.
i missed the luxury home property tax conversation, but i have to add…
a few months ago the record had an article about rev. run’s house (in saddle river or USR). it’s still on the market. anyway, i realize his is only priced at $5.5 million, only a fraction of eddie murphy’s, but he also only pays $15k/year in property tax…. not much more than “normal” houses. i was shocked at that.
3B, #220
The difference between 6.5% and 7.0% on a half of million mortgage is $160 per month.
not a deal breaker. Agree?
You need to look at it a different way.
At 6.5%, someone who can afford to spend $3,160 on mortgage payments can borrow $500,000
At 7%, someone who can afford to spend $3,160 on mortgage payments can borrow $475,000.
That half point move just lowered the threshold of what is “affordable” to this buyer by $25,000.
jb
As someone who works in public policy, I have read today’s thread with great interest. There is a lot of emotion wrapped up in decisions regarding the elderly, especially when people think of their own parents or grandparents.
Ultimately though, I hear a lot of talk about what “should” or “should not” happen to the elderly who have played by the rules all their lives. A lot of talk about what is “fair.” I hear that. I also think that property taxes in NJ are outrageously high and pay for a lot of fluff in our schools.
However, I wonder what a lot of posters would think about issues of gentrification in urban areas. Suppose a working class family renting on the Upper West Side for 15-20 years can no longer pay the rent? Is it “fair” that they be forced out because the area is no longer affordable? Or does “fair” apply only to homeowners? One could argue that property taxes are not fixed – just like rent- and when you cannot afford them you must move- just like rent. Just because taxes (or rent) was cheap at one point doesn’t mean it will be that way forever, right? Or do these posters also believe we should reinstitute rent control policy? I’m honestly curious, since this crowd tends to shy away from more liberal policies.
Didn’t they just screw around with the teacher’s pensions recently? Teachers new to the field in the last 2 years i believe got hit. Why not Police and Fire?
Also:
outside of the schools, the No. 1 thing your property taxes are paying for is cops.
I don’t want to say cops don’t do anything (but i’ve worked with a few) in good neighborhoods what do they really do?
I got a speeding ticket the other day in of all places NEWARK (Forest Hills). I was doing 35 in a 25( he says i was doing about 40 but wouldn’t say my speed, just “about 40” If you can’t tell me my exact speed then don’t give me a ticket. I was boiling as cars were speeding by. What really burns me is:
I was told i could go to court and have the charges dropped to no points. For anyone that doesn’t know this scam you basically pay a $425 fine to get it reduced to a reckless driving charge. You can do this two times in a three year period or you can take the points. You just got scammed!
The last thing i need is this crap as i didn’t have points on my DL or insurance before this. I just think how taxes are paying this guy to give me this petty ticket.
SG [227],
Maybe the fed gov should be applauded for this? Their blackbox probably indicates that before Trenton receives $, a great % of it is already allocated via Christmas Tree items. When the blackbox brings up Wayne Bryant[UMDNJ], bells and whistles go off. Since nothing this bizzare can be actually programmed into the blackbox, the system self destructs and Jersey gets shut out.
#229 JB Great way of actually presenting it.
njgal, I think you’re great and appreciate your insight and all, but 6.25 is the rate currently being advertised by Pentagon Federal Credit Union (i guess I got something in common with Reechard, we’re both penfed members), which is certainly not a “shady lender” a la the rate leaders on bankrate.com. Penfed is one of the biggest credit unions in the country and is known for its competitive mortgage rates on 30 yr fixed loans, among other things
Ahh.. what a glorious day. The 10yr. is on a death spiral, lenders are cementing the door shut, a $1,000,000,000,000 ARM tsunami reset is on the horizon and inventory is increasing as we speak. If this doesn’t smell like the makings of a storm, then what does?
#234
Do you really think that a people actually think like that when they’re buying?
When most people look to buy a house and set themselves a 3K a month limit they almost always extend e few hunderd dollars for the house they like. After all you’re buying a house and not a loaf of bread.
Gary [236],
Are you starting to believe that maybe…..?
Do you really think that a people actually think like that when they’re buying?
Most buyers that I know start off by calculating the maximum amount they can afford to spend, and then find a home that matches that amount.
It’s like a the speed limit. When it says 55, everyone goes the maximum speed allowed, 55. Nobody drives 40 when they can go 55.
Remember, we’re in a world where “monthly payment” is king. The monthly payment, by default, is almost always set to the maximum when a buyer asks a broker “what I can afford”?
If they had an extra $160 to devote to buying a home, they would have already included that.
jb
“After all you’re buying a house and not a loaf of bread.”
Make,
That was pre March 2007. The game has changed.
Now, you actually have to qualify. That extra few hundred a month? How about the lender dictates another 50K down as your only option.
When rates rise, and home prices stay flat, affordability falls. The pool of buyers at any particular price point is smaller.
jb
BC Bob #238,
Not yet… :)
NJ Gal (89)
BTW…Reechard is not always spot on, either. You are absolutely right about those rates.
From MarketWatch:
U.S. April consumer credit rises by 1.3%, or $2.6 billion
Outstanding consumer credit grew by $2.6 billion in April, or at an annual rate of 1.3%, the Federal Reserve reported Thursday. Revolving credit like credit cards dropped by 0.5% annualized, or $403 million. It’s the first time that revolving credit has dropped since March 2006. Nonrevolving credit, which includes automobile loans, rose by 2.3% annualized, or by $3.0 billion. Total outstanding debt climbed to $2.42 trillion in April, according to the Fed. The rise in consumer credit was much less than the $5.8 billion expected by economists surveyed by MarketWatch.
Mean (98)-
This sicko pesche only comes around when he can point fingers at blacks, Latinos, etc and blame them for all the ills of NJ.
Easy to sit at a computer and anonymously spew bile.
possiblebuyer,
The difference is that rents are set by a market and property taxes are set by a bunch of corrupt feather-bedding tax-hogs.
#245
worry about you house its falling in price.
“BTW…Reechard is not always spot on, either.”
Clot,
Always?
and you better have staying power in this
market.
Gary [242],
You’re a tough nut to crack.
that’s right njgal you know it all. that’s clear by your posts. strong headed too. what a combo!
we have a black crow forming in this
housing market.
clot how can you possibly comment on what rate i can get? you don’t know me, you don’t know who i’m talking to. pompous indeed.
Donald (180)-
Looking at rate sheets from the mortgage side of my office now; everything up like crazy. All our guys locking rates like mad over the past two days.
God, you’re an idiot. I’m done with you.
I wish you’d share some of those rate sheets.
jb
Reech (253)-
Got some lender who’s gonna do you at par? If not, where are you getting these allegedly-lower rates?
All the mortgage guys out there are borrowing from the same places. Where is the source of cheaper money that’s gonna fuel your own little personal discount?
Or, is your mortgage “friend” a bait-and-switch artist?
that’s right njgal you know it all. that’s clear by your posts. strong headed too. what a combo!
Good point Richard. I feel bad for your husband, I’d hate to be married to you.
“that’s right njgal you know it all. that’s clear by your posts. strong headed too. what a combo!”
So if YOU know it all, tell me the bank where that rate is available. No points, 30 year jumbo mortgage in New York. You can’t, because you won’t admit that the only way to get that is with a 15 year mortgage or funny financing.
Across the board, the tighten of guidelines have slowed volumes originators. Said another way….its harder to find qualified borrowers…fewer buyers in the market.
Alt-A Lender GreenPoint Mortgage Closes Mutiple Offices
http://www.mortgagenewsdaily.com/672007_GreenPoint.asp
I’m wondering how you could possibly compare two mortgages by knowing only the rate.
jb
“Good point Richard. I feel bad for your husband, I’d hate to be married to you.”
Oh, this is rich – two posters with clear personality disorders questioning mine.
“I’m wondering how you could possibly compare two mortgages by knowing only the rate.”
I think it’s a symptom of the “monthly payment” club, which Reechard is clearly a member of (although I really see no tangible difference between the rates alone for my personal payments). You have to look at fees, closing costs and all the hidden things in the actual loan. Don’t forget that NY has some of the highest closing costs – when I called USAA, usually one of the best and lowest (since it’s for vets) I was quoted 6.75 with 35K in closing costs. As for a loan in Westchester, NY, this is a good one – no points, no fees, no escrow (a benefit to someone responsible with their money, as I am), no hidden stuff, and with a top of the line bank. Closing costs will be about 12K, which is low for the area.
“God, you’re an idiot. I’m done with you”
Clot [254],
He’s googling ffr, 2 year, 10 year, fed and interest rates. He’s bewildered why long rates are going up since the fed is stuck at 5.25%. Can you imagine paying 850k at the top of the market and clueless regarding rates? I wonder if he has an I/O?
It’s a great time to buy or sell
housesstocks.Citigroup Equity, Currency Analysts Clash on Stocks’ Direction
I just closed a purchase last week. I believe I did good by locking it to 6.25% 30 year Interest only and 0.5% credit for a jumbo loan of 80%LTV. The same numbers give me 7.25% as of today.
What a change in a single month.
JB [264],
Heads I win, tails you lose.
“I just closed a purchase last week. I believe I did good by locking it to 6.25% 30 year Interest only and 0.5% credit for a jumbo loan of 80%LTV. The same numbers give me 7.25% as of today.”
sounds like you did. Mine is not an I/O – does that make a difference?
Re: Current Jumbo Mortgage Rates
There will always be differences in what borrowers with similar credit can get. There are a myriad of reasons ( lender vs. lender, direct vs. broker, conventional vs. jumbo, etc.) to explain these differences but the discussions illustrates the importance of shopping for rates (sorry brokers I know you hate this).
Remember volumes are down and mortgage companies need the business. At a minimum, I would say to the person you are working with that you get a better rate at another company and see if they match. It’s a buyer’s market….ask for what you want!!!
http://forum.brokeroutpost.com/loans/forum/2/132001.htm
Mine is not an I/O – does that make a difference?
I/O will typically carry a slightly higher rate when compared to the fully-amortizing equivalent.
jb
“I/O will typically carry a slightly higher rate when compared to the fully-amortizing equivalent.”
So that’s where the current 7% rate is coming from. That’s a big difference in a month, for sure.
#246 Rob – if market-driven lack of affordability is fair and tax hog-driven lack of affordability is unfair, then why are the elderly more of a concern than, say, children of working class homeowners? Both are driven out of NJ by the unfair tax hogs. At least the elderly have equity/retirement savings/social security.
Gary-
#236, I am with you 100% on that. Batten down the hatches ladies and gentlemen, we haven’t seen anything yet.
JM
Resume on my desk, former mortgage sales person for a well known defunct firm;
“Member of a sales team dedicated to providing the best possible mortgage products to our customer. Consistently outsold competitors with lower rates by building strong relationships and trustworthiness with my clients. Well known among my clients for “doing what I say I can do”.
BklynHawk #272,
It appears that way but I’m extremely skeptical because I thought we were in for the downturn almost 4 years ago only to be proven wrong again and again.
I never thought this charade would play on for as long as it did.
From MSNBC:
Foreclosure’s Filthy Aftermath
The mortgage mess is getting even messier. Literally.
Malnourished and flea-ridden animals, feces-covered floors and urine-soaked furniture, piles of rotting garbage, swarms of diseased mosquitoes–these are the horrors that may await the ill-fated sheriff, property inspector, Realtor, or passerby making that first visit to a deserted home.
…
“It’s almost every day now that we see a [foreclosed] house in awful condition,” says Scott Mitchell, president of National Property Inspections, a company that provides home inspections and assessments in the Las Vegas area. “We’ve really noticed it increasing in the last month and a half.” RealtyTrac estimates that Nevada had the highest foreclosure rate in the country in April, with one filing per every 232 households.
…
“They know they are going to lose their house, so they have no pride of ownership anymore,” Mitchell says. “They’ll leave the water on so there’s flooding and mold everywhere, they’ll tear the chandelier or the ceiling fan out of the ceiling, kick the doors and walls in. Then the critters start taking over–ants, scorpions, and Black Widow spiders.”
#223
We cannot worry about the “what ifs” in the future. I have a sizable nest egg already (and will continue to contribute to the max). I will let the chips fall in the future…no need worrying about what you can’t control
Gary-
#274. One example of why this could be taking so long is foreclosures…Just look at the process, if you are a really smart homeowner, you could drag that out for years. I’ll just keep renting and squirreling away my money, literally hiding it in a tree, safest place. ;)
JM
BklynHawk #277,
Yeah, it’s the smartest thing to do. Keep saving and hold on. A lot of you here have been waiting this long, you all might as well keep it going. No bubble has ever failed to revert to the mean, I gotta think eventually, we’re all going to be able to swoop in for the pickins’.
Again, I’ll be optimistic when I hear the screams. :)
Grim (260)-
That’s also why I hesitate to share rate sheets. First, our sheets come in with wholesale quotes; second, terms are not defined.
I think these sheets would create more confusion than clarity here. Suffice it to say, though, all anybody here’s been doing since Monday AM is locking…and the 10 yr sits right now at 5.12%.
#274 Gary the down turyn did in fact IMHO start late in 03, and would have corrected by now, with prices probably starting to rise again, as prices were only about 10% over where they should have been.
Welcome to 2004 and the advent of the I/O no money down throw out the lending standards environment , and that drove prices from being high to absurdly obscene. That than reinflated and made the bubble even greater, and extended it until late 05, early 06. Now the serious down turn will start.
“Tax reform proposals that eliminate all tax incentives in the name of a pure, fair, and simple tax system are not politically realistic and may do major harm to important social goals unless the goals are met by new direct spending or regulations.”
Whose “important social goals”? Whose agenda?
And regarding elderly being hit by property taxes.. How do property taxes get raised? By voters. Who votes disproportionately to their numbers? The elderly. If the elderly really cared, they’d vote down every single budget that didn’t involve significant property tax cuts. This is their reward.
Or, if they’re being outvoted by rent-seeking riffraff, it may just be time to move to DE or NC…
http://www.bloomberg.com/apps/news?pid=20601087&sid=a16zEJ5yMe3Q&refer=home
what a scummy industry.
Would someone be able to give me an address and and update on the status of mls 2399608 in mount olive, nj.
Thanks so much
PIMCO manager says strong economic growth worldwide should push up interest rates and yields.
http://money.cnn.com/2007/06/07/markets/bondcenter/gross/index.htm?postversion=2007060716
PIMCO manager says he’s now a “bear market manager” and has raised his forecast range for the benchmark 10-year U.S. yield to 4 percent to 6.5 percent.
#281 Otis Many times they do vote down the budget, and many whoa re nto seniors quietly vote doen the budget, although they are afriad to admit it.
Keep in mind the school budget is the onlty budget any one can vote yes or no on.
What happens when it is voted down, it is then bought before the mayor and council who then amke a symbolic cut around 1% of the total budget, and then the BOE is asked to approve it.
If the BOE does not like it, they can appeal to the county Superintendent who has the power to reinstate the budget in its entireity.
Even more disturbing towns now are actually starting to discover they do in fact have the authority to reinstate the budget without getting county approval. So now where is the democracy in this, why even bother to vote.
The whole idea of voting no is to send a message to the BOE, to stop the spending increases.
i locked at 6.125 jumbo no points, i keep telling my wife if we waited one more week we would be at 6.375 now its up to 6.5.
crazy what the market has done in 1 month.
BC,
There’s a suit in the works in NY:
http://www.observer.com/2007/new-york-s-longest-running-real-estate-joke
“Keep in mind the school budget is the onlty budget any one can vote yes or no on.”
That’s insane.. Seniors should sweep out every single local government at every election until they get a bunch who will cut property taxes and social programs.
But then again, it’s easier to pull up stakes and move somewhere else I guess. Besides, what with teh intarwebs and webcams and such, you don’t really have to _be_ anywhere.. I can (and do) video chat using iChat with my near-septuagenarian parents, Apple is easy enough for even retirees to use!
bear [284],
The market flushed him out.
HEHE [287],
That’s the state of this industry; lawsuits, bailouts, fraud, shattered dreams, bankruptcies and a plethora of wannabe renters. Great time to be on the sidelines.
From the Mercury News:
Kenneth Harney: Average commission rises as sales slow
Tough times selling homes may be spurring a surprise side effect on real estate commissions: For the first time in years, the average commission rate on closed sales nationwide rose slightly last year.
According to a review of revenue and cost data from hundreds of brokerages by the industry publication Real Trends, the average commission rose by nearly one-fifth of a percentage point last year to just under 5.2 percent. That turnaround came despite the growing numbers of realty firms who offer discounted standard commissions or limited-service options where consumers pay lower fees but perform some of the tasks traditionally handled by full-service realty agents.
…
During the 1980s and early ’90s, 7 percent was considered the standard full-service commission rate in many large metropolitan areas. During the late ’90s and into the housing boom years, average commissions dropped steadily through the 6 percent level and stabilized around 5 percent.
One key reason for the decline was the relative ease of selling houses at ever-billowing prices. In the hottest markets, buyers lined up and fought bidding wars for houses. Some sellers asked: Why pay 6 percent to a realty agent when houses almost sell themselves – often for more than the asking price?
Now the market is starkly different – sales are down, inventories up, prices anemic – and a different approach to commissions may be gaining ground. More realty agents are refusing listings that don’t come with full 6 percent commissions. A handful of high-octane agents are even charging 6 1/2 to 7 percent as their standard rates – and they are doing well.
A sobering read:
http://creditboards.com/forums/index.php?showtopic=260743
Take a peek
Clotpoll Says:
June 7th, 2007 at 4:54 pm
That’s also why I hesitate to share rate sheets.
grim: To be fair, I think you are crossing the line. You are asking him to disclose something that would place him at a competitive disadvantage. I think it was a little disrespectful that you even asked. What is he supposed to say and not look evasive?
Bob/others,
Does higher 10 year yield translate to higher money market rate?
From the AP:
Federal Mortgage Reform Unlikely in 2007
No Major Reform This Year, Lawmakers and Regulators Point to Self-Correcting Mortgage Market
Homeowners unable to pay monthly mortgage bills and facing foreclosure shouldn’t count on help from Washington this year.
Regulators and lawmakers seem to be taking a wait-and-see approach as they confront the fallout from several years of lenders making too many home loans to people with inadequate credit.
It would be a mistake to overreact to a market that is already showing signs of self-correcting at a time when little evidence has emerged that the broader economy is at risk, according to regulators and some lawmakers. They also note that consumer spending remains solid, the nation’s jobless rate is still low, and stock indexes have hit record highs in reaction to strong corporate profits.
“We have an obligation to prevent fraud and abusive lending,” Federal Reserve Chairman Ben Bernanke said in a speech Tuesday. “At the same time, we must tread carefully so as not to suppress responsible lending or eliminate refinancing opportunities for subprime borrowers.”
…
If the prospect of soaring foreclosures doesn’t motivate Congress “to take firm and deliberate action, I don’t know what on this God’s earth will,” says John Taylor, president of the Washington-based National Community Reinvestment Coalition, which advocates for low-income and minority groups.
However, John Robbins, chairman of the Mortgage Bankers Association, predicts foreclosures among borrowers with the riskiest credit will amount to 0.25 percent of U.S. mortgages.
“No seismic financial occurrence is about to overwhelm the U.S. economy,” Robbins said in a speech last month.
Lenders say they are already working to assist homeowners in trouble. After attending a “homeownership preservation summit” called by Sen. Christopher Dodd, a Connecticut Democrat who chairs the Senate Banking Committee, big lenders, including Wells Fargo & Co., Countrywide Financial Corp., HSBC Holdings PLC, Citigroup Inc. and mortgage finance giants Fannie Mae and Freddie Mac, agreed to help borrowers modify loan terms before they reset to higher rates.
Citing Dodd’s summit, Mark Adelson, an analyst with Nomura Securities in New York, warns that the housing market would be hurt if some banks overzealously arrange loan workouts.
“Lending money is not about being nice,” Adelson said. “It’s a business.”
…
On the regulatory front, the Fed has scheduled a June 14 hearing about whether to take action under a 1994 law that gives it authority over deceptive mortgage practices by any lender, not just federally regulated banks.
Rep. Carolyn Maloney, a New York Democrat who heads a House subcommittee that oversees financial institutions and consumer credit, wants the central bank to step in.
Dodd wants the Fed to go after lenders that made loans without requiring borrowers to set aside tax and insurance payments. He also wants limits on loans made without income verification, dubbed “liar loans.”
In March, five federal agencies that regulate banks, thrifts and credit unions proposed guidelines requiring stricter evaluations of a borrower’s ability to repay, among other recommendations.
The guidelines — which apply only to federally regulated banks — should be completed this month, Sheila Bair, chairman of the Federal Deposit Insurance Corp. said Wednesday. Bair said she hopes Congress and the Fed issue similar rules for nonbank lenders, such as the now-bankrupt New Century.
http://news.yahoo.com/s/bw/20070606/bs_bw/jun2007db20070605228494
welcome to hell.
This is the aftermath of a mania. the early 1990’s housing not even close to this disaster.
hang in there your ship will come in. Lots of panic out there. Noone said it was easy.
M-i-s-e-r-y 2008
BOOOOOOOOOOOOOOOOYAAAAAAAAAAAAAAA
Bob
“a few months ago the record had an article about rev. run’s house (in saddle river or USR). it’s still on the market. anyway, i realize his is only priced at $5.5 million, only a fraction of eddie murphy’s, but he also only pays $15k/year in property tax…. not much more than “normal” houses. i was shocked at that.”
That is not unusual. In Alpine, rev. run’s property taxes would be even still cheaper. The median property tax bill in Alpine is about $11,000 a year, not bad when you consider the homes that are paying this much are multi-million dollar mansions.
That is why I am planning to move to Alpine. I will live in filthy rich Alpine and pay $3,500 on a $950,000 home while you guys in middle class neighborhoods can pay $14,000 a year to help support my tax discount.
SLASH AND BURN ASKING PRICES
Noone is entitled to a profit.
You must be rewarded for your patience and discipline while fighting off the wolves last few years.
It’s payback time Baby!
Time to go to battle soon.
Baabababababba
donnieboy a very good “Show & teller” Lots of things but owns nothing.
I will be vulturing some goodies off a few show & tellers over the next 6-18 months.
Bleed’em dry
I can feel it. the papapapapapap PANIC building.
BOOOOOOOOOOOOOOYAAAAAAAAAAAA
Bob
Is Bob actually a gorwn man considering the way he writes? He sounds like a 10 year old who uses the computer when mommy isn’t looking.
Does higher 10 year yield translate to higher money market rate?
I can’t think of any easy way to answer this question without a long discourse on the theories behind the variations in yields/maturities.
jb
“You must be rewarded for your patience and discipline while fighting off the wolves last few years.”
That is a great idea. You will be rewarded with a free trip to Iraq, all expenses paid for by the Pentagon!
Senate bill S.1348 Amendment: Clinton SA 1183 (on behalf of herself and Sens. Hagel and Menendez): All illegal aliens who claim to have been in the United States since January 1, 2007 would have up to two years to appear at an U.S. Citizenship and Immigration Services (USCIS) office, drop off a completed application for a “Z” visa, pay a $1,000 fine (plus $500 for each spouse, child, and parent living here illegally with them)and they shall be granted their choice of a foreclosed home being held by a financial institution.
Have just returned from working on my mother’s house and read through the many posts. Was sure someone would’ve mentioned this already, but here it is: there’s a senior citizen property tax freeze program in NJ. I’d post a link, but am too tired to pull it up again (and then get sent to moderation). But to find it, you can do a google for “new jersey” +”property tax” +”senior citizen.” PLEASE do this before you start posting about “senior welfare” issues, cause this is the dilemma for seniors in NJ: even if you want to downsize from 3/br house to 2/br condo, you face a huge increase in property taxes because of the way this program is set up.
And, re: reverse mortgages. Here’s the problem with that, the way my mother and I see it. If she takes, say, a $300,000 reverse mortgage, when she dies the bank owns the house, unless my brother and I can come up with the money to pay off the bank so we can sell the house ourselves. We kind of see it as reverse foreclosure.
But glad to see there’s been some support for NJ’s seniors in the time I’ve been away.
re: 303
Property Tax Relief Programs
http://www.state.nj.us/treasury/taxation/index.html?relief.htm~mainFrame
Parents of a friend are going through the tax issue with their Jersey Shore, beach block home.
The taxes have skyrocketed. But the homes value has also skyrocketed. I’m not sure how I feel about this. I am sympathetic for seniors that have very high RE taxes. But they are going to sell their place for ten times it’s purchase price.
Any thoughts on this?
“Does higher 10 year yield translate to higher money market rate?”
bear,
Not necessarily. They are highly correlated with t- bills, commercial paper and bankers acceptance. These are highly liquid[less than 1 year] and carry much less risk [principal] than longer term treasuries.
The taxes have skyrocketed. But the homes value has also skyrocketed. I’m not sure how I feel about this. I am sympathetic for seniors that have very high RE taxes. But they are going to sell their place for ten times it’s purchase price.
Any thoughts on this?
Here is a criticism that I’ve heard regarding that point. I can’t remember it exactly but it went something like:
Why does the local government feel they are entitled to spend more taxpayer money just because property values went up?
How does an increase in property values make it more expensive to run a town?
Does the fact that the price of my home went up require an additional police officer? A new municipal building? A new teacher? A new playground? A big fat raise for the cronies?
jb
bear [284],
What’s up with Gross. He’s a bull, he’s a bear? He’s a bull for 6 months? I guess Alan is rubbing off on him. How much of this move was the market gunning for his “well advertised” long?
“Bill Gross, manager of the world’s biggest bond fund, said he continues to expect a “mild bull market” for the next year.”
“We do like bond markets from this point forward for the next six months,” Gross said in comments posted on the Pacific Investment Management Co.’s Web site today from a meeting of firm’s fund managers in early May. “But we do suggest in 2008, 2009 and 2010 that interest rates will be moving mildly higher.”
http://www.bloomberg.com/apps/news?pid=20601087&sid=aTgQBbZr1JD8&refer=home
The best thing for seniors to do in order to afford NJ is to downsize. Sell the McMansion with all those empty bedrooms and buy a townhouse/condo.
Excellent Article from the NY Times:
MONTCLAIR
AS a 101-unit condominium building called the Siena takes shape in this community’s trendy shopping district, its developers say they are encountering a couple of new housing trends.
One involves empty-nesters, who seem to be less prone to downsize when relocating from the big suburban homes they may have occupied for decades, according to Brian Stolar, president of the Pinnacle Companies. Mr. Stolar’s company has joined with Kohl Partners to build the six-story Siena on a site once occupied by Hahne’s department store.
(snip – jb)
http://www.nytimes.com/2006/12/10/realestate/10njzo.html?ex=1181361600&en=c8486a94c1f41328&ei=5070
Don’t feel to bad for the seniors. Lots of them are buying 7 didgit condos with every ammenity imaginable.
The article might read like an advertisement for Pinnacle, but is is quite accurate and on the money when it comes to the current down-sizing trends.
Please don’t post the entire text of an article.
jb
“Please don’t post the entire text of an article.”
Sorry.
Aside from being a shameless advertisement, that article has absolutely nothing to say about downsizing due to affordability (particularly taxes). It does, however, discuss downsizing due to a change in lifestyle.
It seems to be geared towards wealthy retirees that simply don’t want a large home anymore, and want to trade that lifestyle for one that affords more mobility and less maintenance.
And what about the third paragraph which talks about combining units? We’re easily talking about $1-2m price range here and units in the 2,000-3,000sq/ft range. Low taxes on new construction in Montclair? You’ve got to be kidding.
Again, this has nothing to do with the burden of high taxes on seniors. This is geared towards jet-setters with the cash to afford this new lifestyle option. This has nothing to do with Joe Sixpack Sr. and the burden of increased taxes on his middle-class home.
jb
About condo’s iin NJ:
Condos in NJ are almost the same price as smaller SFH in the area. Taxes are almost the same as well. Figure in HOA and the question: why would anybody buy condo???
May be for retired people who does not want to do home work it is make sense…….
Sorry.
My fault, I don’t really have “the rules” posted anywhere. Full text is allowed, within reason, for articles where a link can’t be provided.
jb
Why people buy condos?
1. Maintenance free living
2. Ammenities
3. Easier access to points of interest
You are right about the taxes. There are many condos in Cliffside Park that pay more property taxes than I do even though they have less square footage.
Re post 305 and 307:
d2B and JB
The point that d2B makes is often what goes unsaid by the people screaming about high taxes.
As to: Why does the local government feel they are entitled to spend more taxpayer money just because property values went up?
Just as you do, town’s have to deal with the rising prices of the things they buy, and of course the rising salaries of their employees. Also, they love to spend other people’s money and it’s awfully hard for gluttons to eat less than all the pie they can get their grubby hands on.
How does an increase in property values make it more expensive to run a town?
It doesn’t, but when they did a reevaluation and the appraised value of your home more closely approached what it would bring in the market, your share of the tax burden increased because the share of taxes being paid by the guy whose house was built a year ago went down.
Does the fact that the price of my home went up require an additional police officer? A new municipal building? A new teacher? A new playground? A big fat raise for the cronies?
I can’t speak to most of this, but I know cronies always enjoy big fat raises. Oh yeah, and the Mayor’s wife’s idiot nephew needed a job.
re post 291:
JB,
Yikes. There are some things that are just too scary. If it wasn’t so obviously stupid, I might feel bad for them, but they will get what they deserve.
P.S. Remember kids, foreclosures count as sales.
“Condos in NJ are almost the same price as smaller SFH in the area.”
Actually, the exact opposite is true. Many of the newer developments under construction are MORE than singlke family houses. The ultimate is the W Hotel/Condominiums in Hoboken. The penthouses are $4.5 million.
PossibleBuyer(271),
I never argued that seniors deserve a break. I would guess that at least a majority of them voted for the bums that have been raising their taxes year-in year-out.
I was pointing out that a desire to hold down property taxes can in no way be equated with a desire to impose rent controls.
Lindsey I can’t figure you out. One minute your defending every second government handout program and the next you’re pointing out that the kleptocrats are greedy pigs when it comes to tax revenue. Where do you draw a line?
Both sets of my grandparents were smart with their money and were able to afford living in NYC until their final days. None of them had to move to dumps like NC or Texas in order to live cheaper.
Donald,
Did you learn anything, in rate class, today? What does a 5.25 ffr actually mean?
There is not future in RE investment in NJ. Taxes are increasing so much, that You do never own your house, you always pay a rent(tax) that is increasing constantly.Years ago , a regular rent was $1000, to 1200$ a month, Now you pay this even if you own the house!
So I guess the moral of the story is we should all go to Alpine and pay $3,500 a year.
http://www.bloomberg.com/avp/avp.htm?clipSRC=mms://media2.bloomberg.com/cache/vp8J4dUAb36k.asf
dollar/yen = 116-112 range?
BC,
Watching Asia?
jb
Yes, as we speak.
“So I guess the moral of the story is”
Donald,
Great find today, posting May 10 mortgage rates. Enlightening to see rates have been stable. Why do I bother?
Moral of the story?
http://www.nyif.com/courses/fimk_1005.html
Bob (308),
He makes a very good attempt at explaining his vague stance :)
– “But we do suggest in 2008, 2009 and 2010 that interest rates will be moving mildly higher.”
– Federal Reserve will cut interest rates in the “latter part of 2007.”
– new range 4 – 6.5% Vs 4 – 5.5%.
From MarketWatch:
Amaranth tries to have pension fund suit dismissed
Amaranth Advisors LLC filed a motion on Thursday to dismiss a lawsuit by a San Diego pension fund that lost millions of dollars when the giant hedge fund collapsed last year.
The $7 billion San Diego County Employees Retirement Association invested $175 million in Amaranth. When the hedge fund lost $6 billion in September, a lot of the pension fund’s investment disappeared.
If prop taxes increase 6 to 7%/yr then they double evey 7 years? Right? Also, dont forget that natural gas prices have gone up 300%+ since the 1990’s. How much will it cost to heat that McMansion 5 years from now?
“Does it Pay to Save?”
http://www.ncpa.org/pub/st/st298/st298.pdf
331 Not just public pensions are going to be whining soon. This could be a free-for-all.
“The financially stricken Pension Benefit Guaranty Corporation (PBGC) has revealed it is setting up a panel of advisers to tackle companies head on in the battle over pension fund obligations…
Because in the US, the employer itself is the fiduciary, which is arguably like putting the fox in charge of the hen house, in some circumstances the PBGC is left fulfilling the kind of role trustees…”
http://globalpensions.com/?id=me/17/news/28/45302/38/
Every actuary who can fog a mirror is gonna be working late on re-calcs in the next couple of years. Lots of recalcs.
Donald Says:
June 7th, 2007 at 9:03 pm
Both sets of my grandparents were smart with their money and were able to afford living in NYC until their final days. None of them had to move to dumps like NC or Texas in order to live cheaper.
Mr. Duck: I guess we know from where your money came. The question is how the “smarts” skipped a certain descendent generation.
If someone can figure out how to make high prop taxes a Gay Rights issue than I’m sure the NJ Courts or Legislature would act immediately and we would get lower taxes.
http://www.publicradio.org/tools/media/player/marketplace/2007/06/07_mpp?start=00:00:22:09.0&end=00:00:26:58.0
ChiFi (292)-
No offense taken here. It’s just that these rate sheets look like giant math tables…and, they are quoted wholesale. There’s no way for a layperson to know what kind of margin to tack on to make them “real life”.
Originators also have a knowledge of the terms underlying many of these loans, as non-conforming rates are often quoted alongside conforming. If you don’t know the cutoffs and parameters, you may end up relying on the wrong quote.
WSJ
AHEAD OF THE TAPE
By JUSTIN LAHART
Mortgage Jitters May Account For Bond Selloff
June 8, 2007
Yesterday’s big drop in Treasurys gave Wall Street an up-close look at what happens when mortgage investors cry uncle. Even if markets grab a toehold today, there could be repercussions.
The 10-year Treasury had its biggest decline in two years, driving its yield to 5.1% from 4.97%. Commentators were quick to latch on to reasons for the move, such as rumors the Chinese government was selling in the morning. But the biggest factor behind the drop looks like it was mortgage investors, who had been holding out in hopes yields would go lower.
“This is a good old-fashioned mortgage puke,” said Banc of America Securities bond-trading strategist Mike Cloherty.
When Treasury yields rise, yields on bonds backed by mortgages tend to rise more. Higher mortgage rates make it less likely homeowners will either refinance their mortgage or buy a new home. Fewer prepayments mean mortgage investors risk holding more mortgages on their books than they expected. To counter that, they readjust by either selling mortgages or selling Treasurys as a hedge. Both of those things drive Treasury yields and mortgage rates higher — and can push more mortgage investors to sell.
Until yesterday, many mortgage investors appear to have been sitting out the rise in rates. But economic strength and rising interest rates overseas in combination with a Federal Reserve that market participants see as increasingly unlikely to lower rates finally forced their hand.
Mortgage portfolios may be back in balance, which could stem the selling for now. But if rates stay high, many of the debt-financed transactions private-equity firms have been using to acquire companies will be a lot higher. At the same time, the recovery in the housing market that investors keep hoping for could get pushed back.
ChiFi (339)-
Looks like risk premium is being forced onto the mortgage slicers-and-dicers.
http://www.bloomberg.com/apps/news?pid=20601109&sid=aZ0RQfQ5LTTg&refer=home
>>I think it’s a symptom of the “monthly payment” club, which Reechard is clearly a member of
clearly? are you now omniscient? you’re so dead wrong in most of your assertions. next time try asking for directions.
Sheriff’s tips on foreclosure
http://www.chicagotribune.com/news/local/nearwest/chi-sheriff_re_06-10jun10,1,4682018.story?ctrack=1&cset=true
Switching gears here …. does anyone have any thoughts about Newark or experience to share? Is there really a renaissance brewing or is that only an occasional topic in the newspapers? I’ve seen some affordable condos listed there which look like they might be in decent neighborhoods. I’ve never been a Hills of Bedminster kind of guy anyway. Thanks!
10 year- 5.17
5.19
BC, you’re incredible. i’m in europe…what’s your excuse this early?
Curious,
Yeah, my wife is ready to throw me out. If this occurs, maybe I can room with Make.
Curious,
It seems like things are steady there, for now. What’s the locals saying?
things are fine. its europe…slowly but surely… no rush. without bias i am pro-europe in most senses for next 5 years. they are moving slightly to the right… we will move slightly to the left… we’ll all be friends again. banking industry is still utterly inefficient… same with energy and many goverment sectors. lots of room for improvement…needs more time for ‘everyone’s voice’… but they’re moving along just fine.
While reading through the post, there was an issue of offers not being presented by realtors.
One way to solve this is to have the written offer accepted or not accepted with the signiture from the sellers. And then brought back to the offerer. Doesnt this make sense?
Rob, from yesterdays Part of the exodus thread said:
Lindsey I can’t figure you out. One minute your defending every second government handout program and the next you’re pointing out that the kleptocrats are greedy pigs when it comes to tax revenue. Where do you draw a line?
Rob,
I try to deal with the reality of the situation. There are legitimate government programs that have broad social benefits and there also are incredible examples of government boondogles, fraud, and waste (and they’re not always what people think they are i.e municipal police forces).
I know elected officials and bureaucrats who work diligently and honestly on behalf of the people who elected and hired them and I know glad-handing (and ham-handed) hucksters who look at a place in government as an opportunity to get while the getting is good.
People tend to see only the things they want to see, no matter which side of the fence they’re on, I try to avoid that. Also, I think you might see what I view as attempts to correct misinformation, or simply provide information, as defense or support of a particular program. That may or may not be the case, I just like a fair fight.
This site is consistently interesting and a lot of fun, and I enjoy contributing what I can to the discussions.
Re: NJGAL’s interest rate.
Other than income and FICO, doesn’t the amount borrowed affect the rate? Does the rate quoted include points or other fees? Does anyone know the structure of the product NJGal’s been offered? When I bought, I was quoted a broard range of interest rates. Ultimately the product I choose didn’t have the lowest rate but was the most conservative and risk free.
Just my two cents.
The only thing sad about this article is that her kids won’t chip in to pay a piece of the property taxes and are throwing their parents out the door of their family home.