From the WSJ:
New Home Sales Up From Record Low
Sales of new homes increased in March from a record low a month earlier, a small boost for a struggling part of the U.S. economy.
Sales grew 11.1% on a monthly basis to a seasonally adjusted annual rate of 300,000 in March, the Commerce Department said Monday. Results for the previous two months were revised upward, but February remained the worst month on the government’s records, which go back to 1963.
Economists cautioned against concluding that the new-homes market is on the rebound.
“Even with this improvement, the data on new home sales has remained in a very depressed range,” over the past year, wrote J.P. Morgan economist Daniel Silver. While sales of previously occupied homes have shown modest improvement over the past year, the market for new homes is faring far worse, he noted.
“It is not hard to have a large percentage increase in sales when you are coming off the lowest level since records started being kept,” wrote Joel Naroff, president of Naroff Economic Advisors, in a note to clients. “We need to more than double the March sales pace to reach decent sales levels.”
Economists surveyed by Dow Jones Newswires had predicted the March sales rate would rise 14.8% to an annual rate of 287,000. Sales, however, were down 21.9% from March 2010.
Coming off the worst year for new home sales on record in 2010, the housing market continues to struggle to recover from a painful bust.
With demand soft, prices have been weak. The median sales price for a new home sold last month was $213,800, up 2.9% from $207,700 a month earlier, but down 4.9% from the same month last year.
From Reuters:
U.S. new home sales up, market still seen weak
Sales of new U.S. homes
rose in March and the number of properties on the market was
its lowest since the 1960s, but further gains will be hampered
by stiff competition from a glut of previously owned houses.Single-family home sales rose 11.1 percent to a seasonally
adjusted 300,000 unit annual rate, the Commerce Department said
on Monday, up from 270,000 in February. Economists had expected
a 280,000-unit pace.Despite last month’s rise, new home sales are just bouncing
along the bottom.The market for new homes is being squeezed by competition
from previously owned homes and a deluge of foreclosed
properties, even though inventories in March fell to 183,000
units — the lowest since August 1967.“The rebound in new home sales was encouraging, but the
March sales pace merely brings us back to the underlying trend
and indicates that housing continues to bounce around
historical lows,” said Omair Sharif, an economist at RBS in
Stamford Connecticut.
From Time:
New Home Sales: Slightly Better Than Horrible
It is interesting what registers as good news these days in the housing market.
People are making a big deal out of today’s new homes sales number as perhaps finally the sign that the housing sector is rebounding. On Monday, the Census reported that new housing sales rose 11% in March. This was greeted as generally good news. Nationwide, 29,000 new homes were sold and it puts the market on pace to clear 300,000 homes in 2011. It’s the first month that new home sales have jumped, and they were up in the double digits. So this is good news, no? Not really.
The March numbers were up from February. But February’s sales pace of 270,000 was the lowest on record since the Census began tracking the number in 1961. So beating that number is a little clearing the first round in whatever is the opposite of limbo. What’s more, on a year over year basis, March sales were actually down 22% from a year ago. And that might be the more important number. Despite the fact that the Census says it seasonally adjusts the number, new housing sales seem to always jump in March, perhaps because of the better weather. Perhaps because people are often looking to move in during the summer. New home sales even jumped in March in 2008, which was an all-round horrible year for housing and the economy. Based on that, last month’s jump, which was smaller that others, isn’t that meaningful.
Sorry for the delayed post, I blame thunderstorms at EWR last night and a 4am replay at the airport.
That said, I’m probably just a slacker.
From Ritholtz:
Cheapest Homes in 40 Years? Not Even Close…
I have been wanting to discuss a horrifically misleading article for a week now: Americans Shun Cheapest Homes in 40 Years as Ownership Fades.
It is an object lesson in how an industry spokesgroup, engaging in biased analysis, used poor econometric models to create misleading data. That led to others making bad assumptions based on that data, which in turn leads to an unsupported conclusions. To wit, that home prices are now cheap (they are not) and home ownership is being shunned (it is not). Thus, the end result is a misleading Bloomberg.com article on residential Real Estate that is unfortunately based on these terribly flawed NAR metrics.
The reality is quite different than the spin. No, it is not, as objective data reveals, especially cheap.
This flawed data/PR flack/spin approach is how the NAR manages to get a false and misleading claims printed in major US media on an all too regular basis. “The most affordable real estate in a generation” nonsense in Bloomberg is only the latest hoodwinking they have pulled on journalists. Recall back in 2009, the Wall Street Journal and IBD were both snookered by the NAR’s seasonal adjustments (we discussed this here, here, here, and here).
Given the NAR’s track record when it comes to data analysis, anyone who makes any sort of purchase based on NAR spin is a fool who will get what they deserve.
To hell in a handbasket?
On the highway to hell?
To hell and back?
Naw, it is not coming back. Well, not anytime soon, at least not in real dollars.
I posted something about this impending move some days ago. Now it is official:
http://latimesblogs.latimes.com/washington/2011/04/political-donations-obama-fec.html
oops. Here is the headline and a few grafs:
Obama drafts order requiring political donation disclosure from those seeking federal contracts
What could possibly go wrong with that kind of information in a nonpartisan place like Washington?
snip
As it happens, the Wall Street Journal has noted, the draft executive order would not apply to recipients of federal grants or to federal employee unions, often Democratic supporters. Probably just an oversight.
snip
This is, of course, a ridiculous suggestion. If it were true, then such an approach would for generations past have helped keep political control of the nation’s No. 3 city in the tightly-clenched hands of Obama’s inbred hometown Democratic party, now about to be headed by Obama’s ex-chief of staff, Mayor-elect Rahm Emanual. Probably another coincidence.
So, everyone should just accept that this upcoming political Obama executive order is all simply about good government and bureaucratic integrity — except for one tiny, silly, little thing.
Most federal contracts are supposed to go simply to the lowest bidder, regardless of political donations, connections, hometown or hat size. So, why would Obama’s South Side gang need to know any company’s political allegiance?
so your private, political donations must now be reported to your boss and hr, if company has federal client.. Great
What is really being counted when home sales went up in a month? Homes under contract? Or contracts that actually closed? Or some other supposition? I guess it is homes under contract, which then gets revised when it closes… I don’t know. Some guidance please…
Housing reality trumps dogma for some in GOP
Getting rid of Freddie, Fannie proving difficult facing well-moneyed constituent groups
http://www.msnbc.msn.com/id/42751787/ns/business-eye_on_the_economy/
I am now fairly certain that I will spend my final decade or so in a mud or adobe hut.
The only open question is what part of coastal Central or South America I’ll eventually decide upon as the best location for that hut.
Pal of mine just came back from Chile today. Says the national side is looking ultra nasty, and Santiago Wednesday is an excellent club side.
Goddam rabbit hole just goes deeper and deeper.
“Over the past hour Zero Hedge has been inundated with reader comments notifying us that Ampex has, validating the earlier post speculating about a possible silver shortage at the metals distributor, launched a “reverse ïnquiry” in which it will pay “you $3.00 over the current spot price of Silver for your Silver American Eagles. ANY year, ANY quantity!” and “We will pay you $38.00 over the current spot price of Gold for your Gold American Eagles. ANY year, ANY quantity!” So aside from this first public confirmation that one of the biggest wholesale retailers of precious metals is now inventoryless [sic], we can certainly see why Asia has decided to take silver down in the afterhours electronic session.”
http://www.zerohedge.com/article/apmex-starts-reverse-inquiry-seeks-buy-any-quantity-silver-clients-3-over-spot
Good Morning New Jersey
From the Courier Post:
Report: Home prices, sales dip in area
Home prices dipped an average of 3 percent in the Greater Philadelphia market in the first quarter, while properties in Burlington County were down 7.2 percent, according to a real estate report released Monday.
Overall, the volume of sales ticked down from 10,381 homes in the first three months of 2010 to 9,301 homes in the same period this year, according to the Prudential Fox & Roach, Realtors HomExpert Market Report.
The time it takes to sell a home ticked up to 109 days in the first quarter of 2011, an increase from 92 days a year ago.
…
Pru Fox gathered statistics from 12 counties in the Philadelphia market, which includes South Jersey, southeastern Pennsylvania and northern Delaware. The only county to show gains was Delaware County in Pennsylvania, where prices gained 2.5 percent.
From Bloomberg:
http://www.businessweek.com/news/2011-04-26/home-prices-in-u-s-probably-dropped-consumer-confidence-rose.html
Residential real estate prices probably dropped in February by the most in more than a year, a sign the housing market is struggling to stabilize, economists said before a report today.
The S&P/Case-Shiller index of home values in 20 cities fell 3.3 percent from February 2010, the biggest 12-month decrease since November 2009, according to the median forecast of 25 economists surveyed by Bloomberg News. Another report may show consumer confidence increased in April as job gains helped cushion the effects of rising gasoline costs.
Increases in foreclosures are adding to a growing inventory of unsold homes, which may further depress prices and dissuade potential buyers anticipating even cheaper dwellings. Declining property values also limit construction and restrain consumer spending as homeowners have less equity to borrow against.
“The massive overhang of houses is going to keep pressure on prices,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc. in New York. “We need supply and demand to be in much better balance, and with the enormous amount of supply out there — both existing and looming from foreclosures soon to be — that’s going to take a while.”
The S&P/Case-Shiller index, based on a three-month average, is due at 9 a.m. New York time. Survey estimates ranged from declines of 2.5 percent to 4 percent. Prices dropped 3.1 percent in the 12 months ended January.
http://www.nj.com/news/index.ssf/2011/04/nest_egg_missing_for_nj_retire.html
Perhaps Bo can find some money for NJ
So, it takes longer to sell and, when one does, one gets a lower price. Sounds like s return to a bull market.
This guy shouldn’t be allowed to run a lemonade stand.
NEWARK (NJ.COM) — Nearly seven years after resigning as governor, Jim McGreevey has been rejected in his quest to join the priesthood of the Episcopal Church, according to a report on NYPost.com.
The report said McGreevey’s bitter divorce from Dina Matos McGreevey was a big concern for church officials and one reason he was turned down. McGreevey resigned in 2004 when he declared himself “a gay American.”
However, according to the report, it is very common for first-time applicants to be told they need to continue their studies or charitable work before joining the clergy.
He began studies at the General Theological Seminary in Manhattan in 2007 and graduated last spring with a master’s in divinity.
The former Woodbridge mayor lives in Plainfield with his partner Mark O’Donnell.”
Hobo 18 You just can’t make this stuff up, McGreevey a priest , just to much material there.
Friend of mine says Rev McGreevey was at a Hoboken church for a while. I still have to give the guy his props. Resigns because his name shows up about 30 times in an indictment but hoodwinks the sheeple into thinking its all because he’s a closeted gay. The news coverage was hilarious with all the knee-jerk defense of the guy by the people being interviewed on the street – “No he shouldn’t resign because he’s gay, my cousin is gay”. F’g morons deserve the sh*t government they end up with year in and year out.
More Ritholtz:
“Brilliant Amazon Reviews: David Lereah’s RE Books”
Over the years, we’ve occasionally pointed out the absurdities of former NAR economist David Lereah. Our ire at the “Baghdad Bob” of Real Estate multiplied after he left the NAR, when he essentially admitted to being an ethicless huckster during his time there.
You might imagine we would want nothing whatsoever to do with Lereah, including his published books. You likely assume they would be all spin, no truth, less dignity. And you would be right. However, here at TBP, we are big believers in the “Teachable moment.”
http://www.ritholtz.com/blog/2011/04/amazon-reviews-david-lereahs-boom/
From the intertubes…
But a new study based in Christie’s backyard found that New Jersey’s millionaire’s tax, instituted in 2004, had a negligible effect on its millionaire population. In fact, New Jersey’s millionaire population actually grew over the period of the study, even through the recession.
Brilliant. 20 questions for the Bernank. If anyone with a brain or the desire to ask a real question were allowed into this propaganda fest tomorrow, Bennie would be peeing in his pants by about question #7.
http://www.zerohedge.com/article/20-questions-ben-bernanke
sastry: Yep, why not raise millionaire taxes to 100% then? It is not like the money belong to them in the first place.
In fact, if you look at the “study”, of which I’m somewhat sceptical, it says:
“Of course, not all millionaires are the same, and some are more likely to leave than others. The study found that New Jersey millionaires over the age of 65 and who live off their investments are the most likely to leave. Among those who earned their money from investments, the tax raised migration rates by 27 people per thousand among the top 0.1% of earners.
Yet those who own their own businesses or earn their money in New York–groups that account for a large share of millionaires in New Jersey–are less likely to leave”
Surprise. People who had a high-paying job or business (often tied to physical presence) in this area make did not move, but the ones who had investment income did indeed move because of new tax. This is hardly rocket science. If you had a 300k income, you just cannot leave to Texas. The ones who can move their business (may take years) or have investment income mainly can (and will) move because of new tax.
Jamil, but your ilk said that the tax was a “failed program” that will drive millionaires away. That was the reason it was vetoed. The alternative was to raise taxes on senior citizens.
What is with 100%? Are you really that petty?
“New Jersey millionaires over the age of 65 and who live off their investments are the most likely to leave…”
Old retirees that would have anyway moved to FL? Grasping at straws.
sastry: I don’t expect that Wall Street millionaire, or double-income high earner family can simply quit the job and move to FL the day after the tax hike, especially when house prices have just collapsed (I assume the high-income family has at least 1 house here). It will take time to consider other options.
However, you don’t have to be Einstein, to understand that higher taxes will lead some people, who can (e.g. not tied to NJ because of job) to move out in the near future after such tax hikes. Besides, it takes time to sell the house etc.
We have at least as much studies showing that higher taxes lead to out-migration and creative tax planning.
I’m sure you can get anything out of study and I don’t doubt the political motivation of this study.
The poor don’t pay nearly enough in taxes. Everybody has to have skin in the game for any tax code to work.
Question for all you expoits out there: What are your options in a tax assessment appeal when the town comes back and makes an “offer” of assessment that is $20K higher than the appraisal you paid for (based on comps)? This strikes me as nickel-and-diming on the part of the towns, but that’s what’s happening. Is one better off taking the offer? Insisting on a hearing?
Advice, please! Thanks.
9 people running for BOE in my town with the election on Wednesday. Did a little homework and crossed out any candidate that was currently a teacher or administrator. Is it wrong to dismiss those currently working in education? The other choices don’t necessarily have stellar resumes. Dental hygienist. Realtor. Retired army. Student.
does it make sense to purchase a property for $250k/$12k taxes if one can rent it for$2k?
is there a formula for calculating these figures?
is it just a bad idea to try to be a landlord?
I don’t resent being a taxpayer. However, the following make me mildly irritated:
– being a guarantor of worthless securities and bad debt
– having fraudulent and failed (D-rated paper) debt forced onto my country’s balance sheet by traitors and criminals
– having my children and grandchildren conscripted into slavery as guarantors of future worthless securities and bad debt
– being a provisioner of corporate welfare to failed companies and industries
– being used as a hedge against gumbint-sponsored speculation and outright gambling
– watching my Mom’s life savings dwindle to nothing, as she is invited to choose between living like a pauper or “investing” in gambling-like risk assets (at the age of 82, your choice of investments should not be between living on cat food or selling life insurance on Steve Jobs)
31, as an investment? no. being a landlord is no picnic.
30- so what do you want them to be? Sounds like a nice cross-section of the population to me. Maybe they can think outside of the box.
Hobo With a Shotgun, that’s called being an American, and that’s the way it’s always been from 1776 to today.
34
My question is should I be prejudice against current teachers and administrators being on my town’s boe?
Vote with a bullet.
Dan 31 like this one: The basic buying safety rule is to divide annual rent by the purchase price for the house:
annual rent / purchase price = 3% means do not buy, prices are too high
annual rent / purchase price = 6% means borderline
annual rent / purchase price = 9% means ok to buy, prices are reasonable
Sorry it doesn’t factor in the taxes
Case shiller down again? is it 8 months straight now?
thanks mike…
is there an adjusted formula that includes taxes? shouldn’t you also include interest rate too? for both borrowing and opportunity cost on the down payment amount?
(36)
Nixing members that will vote for or with the school district is a fine way to insure the taxpayer will be protected. Not foolproof, but their bias is obvious.
Figure that some are voting the opposite way too.
Higher oil prices here to stay?
Saudi Arabia could need the oil price to average more than $100 a barrel by 2015 to sustain the big public spending rises it plans in an effort to forestall the political unrest sweeping the Middle East.
The oil market is growing increasingly worried about Riyadh’s fiscal needs as it fears that they could force Saudi Arabia to pursue oil policies similar to those of Venezuela and Iran, traditionally the price hawks at the Opec oil cartel.
http://www.ft.com/cms/s/87d60044-5bbb-11e0-b8e7-00144feab49a,Authorised=false.html?_i_location=http%3A
#36 Major conflcit of interest IMO.
re # 40- Grim – The effects of the government’s many attempts to usurp market forces have nearly completely worn off on housing stock.
We had all kids of HOPE for Homeowners, and all were dismal failure other than preventing perhaps housing stock free-fall back in 2008-2009.
Home Affordable Refinance Program (HARP)
FHA Refinance for Borrowers in Negative Equity (FHA Short Refi)
Treasury/FHA Second Lien Program (FHA2LP)
USDA’s RHS Special Loan Servicing
Principal Reduction Alternative SM (PRA)
Veteran’s Administration Home Affordable Modification (VA-HAMP)
Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (HHF)
Now the same UNCLE SAM is offering you Relocation Assistance when you just walkaway gracefully with some extra $3k taxpayer cash in your pockets.
Home Affordable Foreclosure Alternatives HAFA program.
Should be interesting in my town tomorrow. A select few screaming to vote yes on the budget, but vote no on changing the funding formula on the regional school funding, to cost per pupil.
This article pretty much sums up Stimulus fraud.
We borrowed money from China for Stimulus/Porkulus, then used the same money to buy manufacturing stuff from China. No doubt this employs several government parasites who are managing and inspecting the money, but can even our Sastry to claim this makes any sense?
http://newsblog.projo.com/2011/04/chinese-firm-to-supply-wind-tu.html
“A Chinese firm will supply three wind turbines that will be installed at the Field’s Point Wastewater Treatment Facility on the Providence waterfront.
Xinjiang Goldwind Science and Technology Co. announced Monday that it had secured a deal for the three 1.5-megawatt turbines with Gilbane Building Co. The Shenzhen-based company has nine factories in China and has the capability to manufacture 4,000 1.5-megawatt turbines annually.
The turbines at Field’s Point are expected to supply between 55 percent and 60 percent of the treatment plant’s power. Installation of the turbines is being funded in part by $750,000 in federal stimulus funds.”
Danxp, Mike
As a rough approximation, you can use the following relation in terms of PITI based on the average annual property tax bill being 3% of the home value:
annual rent / purchase price = 3% means do not buy, prices are too high
annual rent / purchase price = 6% means borderline
annual rent / purchase price = 9% means ok to buy, prices are reasonable
annual rent / PITI = .33 means do not buy, prices are too high
annual rent / PITI = .66 means borderline
annual rent / PITI =1 means ok to buy, prices are reasonable
That is based on a 6% fixed rate. the relation is inversely proportional to interest rate. As interest rate goes up the price of the home must drop to continue to satisfy the previous ratio.
for example, a home priced at 266K with a 3% annual tax bill and a 6% fixed rate has a ratio of (1) compared to an annual rent of $24,000 (2K/month). If the interest rate goes up to 7% the value of the home would need to drop to 240K to meet the same ratio.
This is a ROUGH rule of thumb
Mike 43
Say hello to ELM(Export land Model)
Danxp, mike
Someone could argue that the relation i just posted should take account of mortgage interest deduction. my relation does not. You can argue it either way. if you take mortgage interest deduction into account it will INCREASE the purchase price of the home that would meet the stated criteria
3b – NY Times says it will be peaches and cream tommorrow and everyone teachers and voters will be singing Happy Days are Here again..
For New Jersey School Budget Votes, Tempers and Tax Rises Ease
http://www.nytimes.com/2011/04/26/education/26njbudget.html?scp=5&sq=chris%20christie&st=cse
oil prices, what to do?
“Shell Oil Company has announced it must scrap efforts to drill for oil this summer in the Arctic Ocean off the northern coast of Alaska. The decision comes following a ruling by the EPA’s Environmental Appeals Board to withhold critical air permits. The move has angered some in Congress and triggered a flurry of legislation aimed at stripping the EPA of its oil drilling oversight.
Shell has spent five years and nearly $4 billion dollars on plans to explore for oil in the Beaufort and Chukchi Seas. The leases alone cost $2.2 billion.”
JC,
Gator is the real expert here with respect to when a home is within a range of values that prevents a homeowner from seeking a reassessment, so I would seek her advice. That said, this assessment you are being offered willl set the basis for all future assessments as it will help establish comps. My inclination would be to fight it tooth and nail in order to drive it as low as possible, and I would be inclined to make sure that I intend to appeal, appeal, appeal. I doubt they want the fight. In the final analysis, how much more will the town get from you for the extra $20m? On the other hand, how much more will you pay for school taxes, etc?
Halfway through morning meetings. Bad food, bad hotel, bad location. Never thought I would say I can’t wait to get back to jersey.
It is not called The Promised Land for nothin’, Nom.
50 kettle…
my rough formula is something like…
if monthly outlay (PITI * (1-tax bracket)) < monthly income (rent – monthly interest lost from your down payment) then … buy!
now i'll have to factor in things like maintenance on the property and risk for not being able to rent out the property, but this is what i'm using…
any other factors to consider?
“Bad food, bad hotel, bad location. ”
Other than the iceburg, how was the maiden voyage Captain Smith?
Danxp, Mike
Here is a little spreadsheet to play with the variables:
(Sheet 2)
https://spreadsheets.google.com/ccc?key=0AihJfz4n6jQndExTTS1GNXppOTlMQUNtMG96Y3NDYmc&hl=en&authkey=CJ3_1YcE
(56) If you’re new to the rental property game, this probably isn’t the best market to be dipping your toes in. As many of the RE experts on this board keep saying, the real players aren’t even getting off of their beach chairs yet.
No amount of formulas will save you from a tenant that refuses to pay rent or leave.
Danxp,
I dont know that there is any one good rule of thumb. different people will put different weight on different factors. It depends on how aggressive or conservative you may be financially. I believe the standard requirement from banks used to be that your PITI should be less then 30% of gross income (i.e front end and back end ratios).
Considering as a landlord I was strict, as an owner I was strict as a Tenant over my seven years of renting. Once I left all the windows open when I went away for weekend as apt was top floor and insanely hot and no fire escapes and weather was predicted to be dry and hot, had a freak massive thunder storm and landlord freeked out. Another time paid porter to install a cieling fan and it blew out who building’s power and toasted circuit box, another time drunk friends jumping in elevator broke it and firefighters came and elevator was out for a week. Sadly I was one of better tenants. Favorite mess we made was a Hampton House where owner said he was keeping our deposit on memorial day. But he forgot we had it one week more. Threw a itailian food party used every plate in house and guests used his towels and sheets as toliet paper.
danxp says:
April 26, 2011 at 9:25 am
does it make sense to purchase a property for $250k/$12k taxes if one can rent it for$2k?
is there a formula for calculating these figures?
is it just a bad idea to try to be a landlord?
#51 I guess we will see tomorrow. But it will still be a problem in RE, as Oradell will vote to change the funding, RE will vote no than Oradell moves on to the state Supreme court, to get this addressed once and for all.
I would expect a very large turnout in both towns.
Township Manager Paints Grim Picture of Montclair’s Finances
Township Manager Marc Dashield told a small group of Montclair taxpayers to think of their town as a medical patient. In 2009, the idea was to stop the bleeding—and then the idea was to move on to triage. “And now we’re doing the treatment,” he said.
To prove just how dire Montclair’s financial situation has been, he noted that $2.1 million was paid out as a result of tax appeals in 2010.
“[Part of] the surplus that we usually [have on hand] had to be used to pay for this which means we went from having a surplus of $1.5 million to having a surplus of $800,000,” he said.
That was just one dismal fact presented by Dashield as he discussed the implications of the proposed 2011 Township budget at a forum Monday evening sponsored by the League of Women Voters of the Montclair area.
Dashield started his talk by speaking of the reason why a 0% tax increase is most likely impossible: fixed costs.
He said that fixed costs—such as insurance and pensions—make up $40 million of the proposed $70 million budget.
In addition, the Township’s already operating with a “skeleton” staff, getting by with a workforce reduced by 40 people since 2009.
“We have had to cut $2.3 million in fixed costs,” he said. “This is why we’re in this crisis.”
The impact of budget cuts already is being felt in many ways, Dashield said, noting that the repercussions include an older workforce picking up trash.
“We have an older workforce because of layoffs and so we have more people getting hurt and this is having an impact,” he said, adding that the Township is forced “on some days to do single-source recycling.”
Although extreme fire and police layoffs have not occurred, he said that each year the workforce in these departments is being reduced because people who retire aren’t being replaced.
“This year we’re losing a captain and a lieutenant and a sergeant,” he said.
Dashield’s proposed budget cuts $800,000 from the library and also reduces the code enforcement staff by 40 percent and the engineering department staff by 30 percent.
“People say ‘why don’t we reorganize the town and the way it’s run?’ … but we are reorganizing the government every day,” he said.
Striking a more optimistic note, Dashield also expressed enthusiasm for the South Park Street renovation project that was recently approved.
Dashield added that developers have expressed interest in building a hotel in downtown Montclair.
“We’ve got the greatest business district I’ve seen anywhere,” he said.
But, Dashield admitted, the Township needs to start really getting to work on these improvements and then “connecting” those improvements.
“If there’s a new hotel and new business along South Park Street then this will benefit everyone,” he said.
When asked about parking, and the loss of some spaces due to the South Park Street project, Dashield said there are always places at the Fullerton Deck, adding that the Township is “looking at making improvements there.”
Turning to the property revaluation, he reassured the group that the process could be completed by the end of this year.
“It’s not a full revaluation in that [assessors] don’t visit every house but they visit a certain number of houses in town,” he said. “We need to adjust the whole base in this town.”
When asked what he thought of the recent report by the Operating Budget Advisory Committee—a committee of residents appointed by the Township Council to examine the budget—Dashield said he found it “reassuring.”
“The things they are talking about are things we’re already looking at,” he said. “The basic report showed that we’re pretty much on the same page.”
Finally, when asked what he’d do if—hypothetically—he found a check for several million dollars on his desk in the morning, Dashield said he’d use the money to stabilize the surplus, put more money back into the library, and give a boost to a struggling Department of Community Services.
“The real way to deal with our problems is to promote economic development,” he said. “We need to bring in more commercial ratables.”
http://montclair.patch.com/articles/township-manager-paints-grim-picture-but-also-expresses-hope
Why can’t you grieve your taxes every year. I grieved this year and won and already am grieving for next year?
Shore Guy says:
April 26, 2011 at 11:15 am
JC,
Gator is the real expert here with respect to when a home is within a range of values that prevents a homeowner from seeking a reassessment, so I would seek her advice. That said, this assessment you are being offered willl set the basis for all future assessments as it will help establish comps. My inclination would be to fight it tooth and nail in order to drive it as low as possible, and I would be inclined to make sure that I intend to appeal, appeal, appeal. I doubt they want the fight. In the final analysis, how much more will the town get from you for the extra $20m? On the other hand, how much more will you pay for school taxes, etc?
re: # 63 – Since all the kids in Montclair now speak Mandarin why not reach out to their Chinese friends and ask them to fund/pilot a FOXCONN Factory City type of program in Montclair. The schools could start up a votech program so the kids could learn all the neat stuff about assembly line mass production.
JC 29 — Tough call, but I would seriously consider it. Last year the town came in and offered us a “deal” for about 20k higher than our appraisal. We declined it and went to hearing based on a sale of the house across the street (assessed higher than us) that sold for 20k lower than our appraisal. There were several other sales in our immediate neighborhood that sold at or around our appraisal as well.
We went to hearing. Thought we did extremely well, and the County came back with a judgement that was 20k HIGHER than the town’s offer. The county assessed us $7k higher than the sale price of a more updated home 1,000SF larger than ours on our street. Apparently the one sale in a much more desireable neighborhood in town was more persuasive to the County than our professional appraisal and 3 sales within a block of our home. We are now appealing at the State Tax Court Level.
If there is even one “danger” comp sale like that in your town for last year, I would seriously consider the deal. Especially if you have another crack at the apple next year.
wind turbines from china [47]
(A)What we did was to spend money on Chinese junk, then chinese govt taxed the exporters and used the money to subsidize a construction of wind turbine factory that now sells cheap turbines to us. (B) An alternative was to either tax the Chinese junk here (via tariffs or VAT), or reduce the amount of junk people can buy (by taxing their income directly at a higher rate) and use the money to subsidize a factory construction here. If you poll the people they will choose (B). When they vote they had chosen and continue to choose (A).
juice [65]
to fund/pilot a FOXCONN Factory City
With suicide safety netting.
The end is nigh (Winning Edition):
LOS ANGELES — Charlie Sheen paid $22,500 to bail former New York Mets and Philadelphia Phillies outfielder Lenny “Nails” Dykstra out of jail, TMZ reported Tuesday.
Dykstra, who was charged earlier this month with bankruptcy fraud, was held on $150,000 bail for nearly a week until Sheen put forward 15 percent of the payment.
Sheen said, “The rendition guilty trolls that kidnapped my dear friend Nails clearly forgot that he’s a fellow Vatican assassin and his best pal is a warlock.”
Dykstra has previously come to Sheen’s aid, hiring a top lawyer to negotiate the troubled actor’s return to “Two and a Half Men” after the 45-year-old was fired from the sitcom in March.
Lenny Dykstra leaves federal court in Manhattan.Prosecutors claim that Dykstra, 48, sold $400,000 worth of items from his $18 million mansion in southern California without permission. He faces up to five years in a federal prison if convicted.
As well as fraud charges, the former three-time All-Star was being investigated by the LAPD for lewd conduct after a woman claimed he stripped off and requested a massage when he interviewed her for a housekeeper role.
The end is nigh (Gourmet Chinese Edition):
CHINA NEWS
APRIL 26, 2011
Hundreds in China Fall Ill; Additive Suspected
By LAURIE BURKITT
BEIJING—Nearly 300 people fell ill in central China after eating meat suspected of containing illegal additives, the latest in a spate of contamination problems to emerge even as the government vows to crack down on food-safety violators.
Officials in Changsha, the capital of central Hunan province, confirmed on Monday that 286 people had sought medical help over the weekend after eating in Wu Feng, a village 25 miles southwest of Changsha. Eight people are still in hospital.
The state-run China Daily newspaper blamed clenbuterol, a substance that speeds muscle growth in pigs but can cause headache, nausea and an irregular heartbeat when consumed by humans. Changsha authorities could not confirm the report, saying that they were opening an investigation.
China has been hit by a wave of food-additive scares recently. Health officials over the weekend ordered 17 noodle makers in Dongguan, a city in southern Guangdong province, to stop production after discovering their products contained non-edible additives such as ink, industrial dye and paraffin wax, according to the China Daily.
In Guangdong, authorities last week seized 16 tons of pork contaminated with sodium borate, which changes the color of the meat to make it look more like higher-priced beef, according to the People’s Procuratorate of Guangdong Province, a government body in charge of prosecutions.
Also last week, police arrested 12 people in the northeast China city of Shenyang after finding sodium nitrite, a toxic chemical that makes vegetables grow faster, in bean sprouts, according to the Shenyang Municipal Public Security Bureau.
Last month health inspectors discovered clenbuterol in pork products from a subsidiary of China’s largest meat-processing company, Shuanghui Group. The company apologized on its website and said it discontinued partnerships with producers using the contaminant.
More than two years have passed since China’s government, responding to a scandal in which milk contaminated with the industrial chemical melamine killed at least six children and caused illnesses in nearly 300,000 others, vowed to enforce stricter food-safety regulations.
Though the government executed two men involved in the production and sale of the contaminated milk and threatened other violators with the death penalty, many believe it has fallen short of its promise to improve food standards.
Enforcement hasn’t been strict enough, said Wu Ming, a professor of public health at Beijing University. “We’ve enacted so many policies, but haven’t been able to fully implement them,” said Ms. Ming, adding that many people have evaded laws or used personal relationships to avoid punishment for breaking them.
Lower-level municipal authorities also often fail to report violations, said Lester Ross, a Beijing-based attorney with U.S. law firm WilmerHale. These companies are all taxpayers, he explained, and seizing their operations would typically result in loss of local tax revenue.
Mr. Ross said that many companies see additives as a way to shave costs or increase income. “In many instances, the people doing this have no idea that they could be putting people’s lives at risk,” he said said. “The government, including the Ministry of Health, needs to step in and educate people at all levels of the dangers involved in using chemicals in food.”
China’s Ministry of Health did not immediately reply to requests for comment. At a national conference on food safety in February, Health Minister Chen Zhu announced plans to decrease food contamination and hazards this year.
“Reducing and eliminating food-safety problems and related crimes is a long, arduous and complicated process,” he was quoted in the China Daily as saying.
Cobbler,
c) stop subsidizing value-destroying projects with taxpayer money, make the US a friendly haven for capital, and watch new companies and plants get built with equipment that increases the productivity of American workers?
Here is a good safe bond recommendation for Grandma!!!
1YR pre-refunded bonds are yielding 35bps whereas 12 months T-bills yields
have been near 22-24bps. This yield differential turns negative as we cross the
1-year boundary for, e.g., 2YR Pre-Res are yielding only 66bps versus 72bps
for the 2YR Treasury, and 3yr Pre-Res are yielding 101bps versus 121bp for
the 3YR Treasury.
For investors unfamiliar with pre-refunded bonds, these are bonds that have
been refinanced with the proceeds escrowed to retire or redeem the
outstanding bond. This is a requirement of the new bond indenture and
prevents the municipality from incurring more debt versus refinancing existing
debt at lower cost. The proceeds in the escrow account are used to purchase
US Treasury securities or SLUGS. Naturally, this causes us to beg the
question: Why are we seeing a difference in yields for the 12-month tenor
when the underlying securities are essentially shorter-dated Treasury
securities? The answer is quite simple – the market placed it there (Occam’s
razor).
Occam’s razor – “The simplest explanation for some phenomenon is
more likely to be accurate than more complicated explanations.”
sas3,
How many current or future millionaires now laugh at the thought of locating themselves and/or their company in NJ? Economic growth is about attracting new people and businesses, not just the government’s success at squeezing the maximum blood out of millionaires just up to but not quite over the point of making them flee.
I know at least one millionaire who did move to PA with taxes (income and property) being the top motivation.
Chifi, (70)
China is the only place where it may be healthier to eat at KFC and Subway than elsewhere.
Here are some healthier and tasty dishes from China Chalet in Florham Park:
http://sichuanmoredining.blogspot.com/
In the 80’s my Dad, an ME, said “we (the country) can’t all become insurance salesmen”. I don’t think this is what he meant.
http://online.wsj.com/article/SB10001424052748704474804576222623448640098.html?mod=WSJ_hps_sections_careerjournal
China’s economy will be bigger than the U.S. economy by 2016, says the IMF, using a special measure of economic size called “purchasing price parity.”
Measured in dollars, the U.S. GDP will still be 70% bigger than China’s by then, but the trend is unmistakable: At some point, barring a wreck of China’s economic freight train, China will eclipse the U.S. to become the largest economy in the world.
What will this mean?
Well, psychologically, it will mean that Americans will have to get used to the idea that they’re not the biggest kid on the block anymore. For most participants in the global economy, China will have become the most important trading partner and market, and China’s economic policies, not America’s, will dominate the global conversation.
Similarly, and perhaps more momentously, China’s military will eventually be larger than the U.S.’s, which will mean the U.S. will no longer be the most powerful country in the world. It’s easier to have influence over other countries when you can speak softly and carry a big stick. Once China vaults past the US economically, it will have the wherewithal to carry an even bigger stick–unless the US wants to continue to bankrupt itself by outspending everyone else despite its smaller GDP.
Adding to the change in fortunes is the fact that America’s financial situation is vastly weaker than China’s: We have a huge deficit and massive debts; China, meanwhile, funds our consumption (by lending us money) and runs a surplus. Over the next couple of decades, therefore, much of the US resources that might have gone into growth and infrastructure spending, will be used instead on interest payments, budget cuts, and social programs. This will likely make the US feel poorer, especially relative to the explosive growth in China.
Regardless of when the exact date comes, in other words, we’re headed for a new world order–one in which China, not America, will be the center of the world.
Salesman are funny. Wife is bugging me to replace above ground pool. Anyhow went to some pool stores, got high pressure tactics. Which is funny cause getting a BJ from a 90 year old nun would be easier than getting a penny out of my pocket. Anyhow Pool guy at last place admits he was a penny stock broker who went to pools after 9/11. He does not own pool store, does not make pools, does not install pools. Just a big catalog. Took me one and 1/2 hours to get him to cut price. But by then guy revealed model number, specs, who installs pools, liner liner thickness and broke it all down. They are like Matress salesman. Wow an identical above ground that costs $1,600 to order direct from manufacturer is $3,600 in pool store. Commission/Markup is over 100%. This is at all three stores I went to. Even crazier install company warranties install and pool manufactuer warranties pool. So the extra 2k is for nothing. This is why when someone tells me I spent 100K on upgrades to house I am like show me receipts. It may be 50K in upgrades
Confused 76
Perhaps, but China has some very serious hurdles it must overcome regardless of the outcome of the challenges facing the US.
“Since all the kids in Montclair now speak Mandarin ..”
If that were true the high school might would not likely be so dodgy, and if the HS wasn’t so dodgy you might get more interest in the town as a whole
re: #78 – Kettle^2 – Very serious hurdles in an understatement. China increased it’s petroleum usage by about 900k barrels a day since last year. At that rate of growth we are looking at an all out energy war not too far into the future. We already spend $100 + a barrel now importing and another $100 a barrel protecting the oil.
Juice – Only the K-2 kids “speak” Mandarin. And that’s only about 1/2 of the K-2 kids at Nishuane. Everyone else in the elementary schools in the district gets Spanish taught by DVD once/week.
Juice,
In many ways they are significantly more leveraged then the US has ever been. Primary aquifers going dry, rapid desertification of prime ag regions, not being capable of feeding their population from strcitly native sources…….
There are a lot of landmines the Chinese must still somehow dodge.
In my opinion i think a regionalization is more likely. The large scale cheap labor and cheap resources needed to fuel one or two global super powers is no longer readily available.
re: # 79 – Ditto – Montclair apparently laid off most of the other foreign language teachers in the elementary schools and are expanding its Mandarin program to grades 3 through 12 with federal grants. I would think since there aren’t too many other choices the kids should at least learn a bit more about their Chinese comrades. A program on assembly lines is really not that far off. Perhaps we can get Apple to relocate a small parts factory that was located in Japan and is now irradiated? A few more federal grants and before you know it we could have the kids learning away about the real world we live in.
http://t1.gstatic.com/images?q=tbn:ANd9GcRjmIcm028x1xxauDO0B2eqduxLRaSMzSy7zWXBHLy7xWAgdKaw
Well, after English, perhaps Mandarin is the most useful for the kids future. I don’t really see any other contenders.
Gator 366: I understand if you don’t want to name the town, but was the county Bergen? I just want to see if this is something we would risk if we took it to the county. Thanks.
58 kettle…
thanks for that link… i’m going to also factor in necessary repairs required to get the property in “rentable” condition… that could be a total wildcard if buying a short sale or reo…
there are so many properties out there…
Danxp,
I wasnt taking “rental property” aspects into consideration. That was geared towards a primary home purchase rule of thumb. I am not the person to ask about investing in rental properties. There are a few regular bloggers here who can speak intelligently on that such as Stu, Gator, and Barbara.
Mandarin is worth learning if you can start young. China’s economy is uglier than people assume. But average income will remain below US for our lifetimes. They are just as property crazy as Americans were, possibly more, though they don’t do it with leverage. 40% of the economy is construction. Rental yields are 3%!!!!!! And people still want to build and buy more, mostly as an investment, they don’t even bother to finish and rent out. Collectively, they are the biggest bagholders on US treasuries. You all must have seen that commercial where the Chinese communist party guy chuckles about how now “they are working for us”, well after a few credit downgrades and further dollar devaluation they would be crying in real life. Chinese are doing vendor financing to the US, collecting major IOUs, that puts them in nearly as bad a situation as their debtor.
At least they work and study hard over there. But corruption is massive and the government seems to be moving towards more economic intervention after a couple decades of the opposite trend. Someday I suspect a lot of companies will regret excessive supply chain dependence on China, as political instability would have an effect like the Japanese earthquake times 100.
Among global investors, a Chinese economic crisis is talked about much the same way as people used to talk about a possible US real estate & debt crisis. You worry and talk about it for years, but nothing happens, and you never assume it will happen next year, because it’s a low probability high impact event, but the preconditions are there.
JC (85):
There is no way of knowing how each county will behave, but it is not worth the risk. Without bias (which is difficult for most), we decimated any argument the town lawyer and tax assessor presented at the county hearing. Gator was prepared! Do the math on your $20,000 difference. What does that amount to in actual property taxes. On a $500,000 home with $15,000 in taxes, we are talking about $600. What is your time worth? How much would you have to pay a lawyer to try and save that $600? In a fair world, the decision of Essex county should have been to honor our appraisal, especially with the comps we provided and the case we clearly presented. Unfortunately, in the world of tax collection, one single house that some sucker overpaid for becomes the precedent for every other property assessment that is even slightly comparable. The government don’t need no appraisal to be performed to come up with their judgement. We figured we would test the fairness of the system. This ended up being a stupid strategy on our part. Don’t make the same mistake we did. Especially considering that there is nearly no way you are prepared as well as the Gator was. Take the town’s offer this year and attack again next year. Let the fact that almost half of your neighbors are ignorantly overpaying warm your heart.
We’ll let you all know how we do against the state. Chances are, we’ll just end up taking the original offer the town gave us as I expect them to make the same offer again to avoid a hearing at the state level. We are definitely not making the same mistake twice. We’ll take the deal.
JC 85 – Essex County/Montclair
I would definitely do the math on what you could possibly save by fighting for that last 20k versus what you’ll potentially lose.
And if you go to hearing at the County, you will need to bring your appraiser to testify. Will you have to pay an additional fee for that? Factor it in.
If your town is not reassessing or revaluing next year, and the market continues to stagnate or decline further, you might very well have another crack at this.
All things to consider.
Figured that you guys might be interested in this MRIS data from the DC area. Apparently we are supposed to be flat or slightly growing in house prices according to all the data that is comming out. All I see is a massive bloodbath when I look at the YOY numbers
20715 Average Sold Price, Median Sold Price
March 2011 – 211,028$ 208,800$
March 2010 – 275,750$ 267,250$
March 2009 – 271,360$ 275,000$
March 2008 – 313,j029$ 315,000$
March 2007 – 351,311$ 340,000$
Looking at it from a pure numbers perspective, these last few months of data that have come out for the spring market have just totally crushed the numbers this year. We are looking at a YOY drop of 60k which is just sickening since we haven’t seen these types of drops since 2006-2007. I know that 20715 isn’t the nicest area (according to some on this blog who know washington suburbs) but still this doesn’t give me a good feeling.
Ditto – At the elementary school level in Montclair, kids get instruction once/week for 40 minutes. By the end of their time in a K-5 school, our elementary school kids in Montclair get the equivalent of only one year of langage instruction. These kids learn to sing songs and eat foreign foods and make some pictures and maybe count and learn their colors. None of them leave the elementary school level with any real ability to speak the language.
A few weeks ago, I had the opportunity to stay with my son’s class for Spanish “class”. They put 2 K classes together (48 kids) in front of a TV to watch SALSA. The day’s episode was Little Red Riding Hood in Spanish. Seemed more like a teacher’s break to me. Funny thing is even the 6 year olds get that it is a joke. One of my son’s friends raised his hand and said “Excuse me, Mrs. B. Me and Lil Gator already know Spanish. We took it in after school enrichment. We’re good.”
unless I want a good price on lawn service what exactly do I do with spanish. Same for Chinese. I mean for a guy maybe I can meet some chicks. Only language I needed for business was Japanese and that is too hard to learn.
Libtard #89: Thanks. I passed the info on to my neighbor, whose house is in question. I haven’t heard a thing about mine yet. County says they are doing it in alphabetical order by town, which means I should probably hear in the year 2087.
Dan
My rule of thumb is it better be cash flow positive from the start. We have a commercial office condo rental owned in a family partnership that rents for $2,200/mo. Taxes are around 6k and mortgage 130k. We were at around 0 cash flow until this year when the bank lowered our rate from 6% to 4.5%.
All of our reluctant landlord clients (rented out former primary when they relocated for new job and couldn’t sell @ their price) can’t wait to be done with owning a rental. Hassle of managing one single family home rental is generally not worth it if you already have a full time job.
Good luck. Remember CASH FLOW!
In that case they could cut salaries by having the kids stay at home and watch Dora.
Some Serious doom for the kids, they will now how to go out and play, perhaps we will see some stick ball games in the streets again?
http://www.pcworld.com/article/226276/sony_games_chief_hirai_silent_on_playstation_network_outage.html
Ron Paul announced he is in the game. Could be interesting. Dark horse candidate with ideas and backbone.
(96) ditto
Si, se puede.
“There are a lot of landmines the Chinese must still somehow dodge.”
No problem, there is plenty of fertile land to the south.
Essex,
Unless he is in the Republican fold, come November 2012, he helps BO.
(26) sas3,
Soak the rich taxes at the state level fail because they are more prone to deadweight loss than other taxes. Put simply, it is relatively easy to avoid such taxes so the rich do.
The real risk comes when you degrade your tax base as a result, as Maryland did with its millionaire tax. Then you actually lose money.
Personally, if I were Christie, I’d let it come in, say on a veto override if NJ permits it, or by getting a concession from the unions that this revenue stream will be for pensions, and the state is off the hook for the shortfall.
Then, when it fails to generate revenue (and it won’t generate growth), the Fat Man has another club to bash the dems with, and, if he is lucky enough to get the concession, he gets a twofer: screws the unions and saves the taxpayer from the pension bomb.
In reality, it won’t happen, but it is a great political move—offer the tax in lieu of future funding and watch the dems back off.
sastry: one more comment about the effect of nillionaire taxes.
I was not affected, tax-wise, by the millionaire tax.
However, otherwise I was affected by the millionaire tax and related class warfare and often violent political rhetoric coming from WH, union thugs and parasites like you (no offense).
As a result of this class warfare, millionaire tax and other soak-the-rich attempts (both failed and successful), I have finally come to conclusion that I can’t settle down in this area. NJ has too many parasitic people hel1-bent on confiscating my money and micromanaging every aspect of my life.
I rather pursue happiness and freedom elsewhere. I have already started to prepare this. This was not a result of single incident (e.g. passing of millionaire tax), but the result of constant attempts by the parasites to impose such taxes.
Eventually, I just gave up. This process (deciding to out-migrate) took several years. I’m sure it is the same for millionaires.
Nom, the taxes I am talking about don’t come anywhere near the level of “soak”. They are at the level of undoing W’s cuts (I think it should be undone for all incomes). The numbers aren’t large.
A “soak” scenario would occur, for example, if the cap on SS income is lifted and SS tax is levied on all income, not just earned income. That would almost double the tax for the idle rich. It will never happen though.
The pension liabilities seem enormous compared to the revenue from the millionaire’s tax, so such an idea would be DOA. Also, I think CC is a bit ideological on the tax front.
Shore, the military-industrial-complex will not let Ron Paul get anywhere near nomination. He is unlikely to run as an independent because the tens of old tea-b@ggers (that’ll be what remains after the corporate overlords pull the plug on the astroturf campaign) won’t be able to do anything.
Obama may win easily… and I somehow feel that 2013 will be just like 2009 or 2011 depending on whether the dems regain majority or the GOP retains it.
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