Prospective buyers don’t want to eat Friskies

From the APP:

N.J. housing buyers resisting higher property taxes

Weighed down by high property taxes and a sluggish economy, New Jersey’s housing market is recovering from the Great Recession much more slowly than the rest of the nation.

It’s forcing real estate agents to leave clients selling their homes with a simple message: Lower your expectations.

“The homeowner feels their house is worth more, but the buyers can’t pay that because of high taxes and high monthly payments,” said Robert Shirvanian, broker for Exit Realty East Coast, with offices in West Long Branch, Middletown, Holmdel and Woodbridge.

The message from Realtors represents a new day for New Jersey’s housing market that is driven by simple math. Workers only have so much money to spend on mortgage, interest, taxes and insurance, and their wages have fallen since the Great Recession. If taxes go up, they’ll have less money to prop up the state’s real estate market.

And a housing market that gets too far out-of-balance will cause home owners to downsize — or pick up and move to bigger, more affordable homes out of state.

That migration is underway in New Jersey, and it can ripple through the economy. From 2009 through 2013, the 88,000 state residents who moved out of state have not been replaced by new workers. In total, the state lost $8.2 billion in taxable income.

New Jersey has been hit harder than the nation. Its home prices fell 21.3 percent, while U.S. home prices fell 20.7 percent. And its prices remain 15.4 percent lower than they were in 2007, while U.S. home prices are 2.4 percent lower, said Patrick J. O’Keefe, director of economic research at CohnReznick, an accounting firm.

Meanwhile, New Jersey’s home ownership rate declined from a peak of 70 percent in 2005 to 63 percent in the second quarter of this year. The U.S. home ownership rate declined from 69 percent at its peak in 2004 to 63.4 percent in the second quarter of the year, O’Keefe said.

“New Jersey has seen some improvement, but it has not participated in the price recovery to the same extent that we’ve seen around the nation,” O’Keefe said.

The pool of buyers isn’t as big as it was. New Jersey’s median household income of $65,243 in 2014 has fallen 4.1 percent from its peak of $68,059 in 2006, according to U.S. Census Bureau figures that are adjusted for inflation. And banks have tightened their lending standards since the housing bubble burst.

The new landscape can frustrate home owners hoping for top dollar when they sell. And it can frustrate Realtors, who need to lower the expectations of the sellers they represent.

“You can’t overestimate your home price,” said Joy Bearden, a broker associate with Keller Williams Shore Property in Toms River. “Any agent can list at any number, but if (an appraisal doesn’t match it) we’re back to square one.”

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16 Responses to Prospective buyers don’t want to eat Friskies

  1. Essex says:

    No one really does want to hold a bag.

  2. 30 year realtor says:

    Market is very divided with regards to price recovery since the financial crisis. The towns with the best schools and desirable commuting locations have recovered to near peak values or beyond. Less desirable communities are fighting to recover with many still between 10% to 20% below peak. Inner city areas are now feeling the heavy influx of REO properties hitting the market. Hard to accurately estimate where the hardest hit areas are in relation to their peak values.

  3. Juice Box says:

    The realtor quoted is right about the state of the market down here in Monmouth county. Plenty of overpriced homes down here. One 3 br near me was listed at 809k and was just reduced to 759k. Still about 200k too much for a 3 br converted ranch built in 1960. The house sold for 300k in 2001. Completely redone since 2001 but nowhere near 1/2 million in improvements. They even appealed their tax assessment and had it reduced by 8.5%, which will go back up next year. House is assessed less than mine, and is in the less desirable schools in out district to boot, but 809k or 759k? Put down the pipe….

    Plenty of examples…

  4. Essex says:

    …as a looker….and a serious one come the end of the year, the whole picture is bleak. Bleak I tell ya. Eddie was right. But one thing does hold true, if we find that ‘location’ and that includes a lot of things where we are concerned. Ideally walking distance to somewhere cool which will mean an older section of most anywhere we go.

  5. phoenix1 says:

    Affordable home- before the LAND…

    “Their mission was to create an energy-efficient and attractive home on an affordable budget.”

  6. Fast Eddie says:

    The new landscape can frustrate home owners hoping for top dollar when they sell.

    LMFAO reading today’s blog post! How f.ucking beautiful! The housing syndicate f.ucked a lot of people and a lot of muppet buyers made really stup1d financial decisions. What a fiasco.

  7. Fast Eddie says:

    Workers only have so much money to spend on mortgage, interest, taxes and insurance, and their wages have fallen since the Great Recession.

    Sell? Sell to whom? LMAO!!

  8. Fast Eddie says:

    Ya gotta love the b@lls on some of these con men trying to score retirement in one flip. Another nauseating sh1t split looking for a sucka. Can you imagine a buyer agreeing to anything close to this laughable price?

  9. Marilyn says:

    CHOW CHOW CHOW!! Coming up Saturday to NJ to pick up the rest of my house money from the disability case. He finally sold his dump and let me say he did find a sucker. He also did a For Sale By Owner. So he did it. He called me and complained about the electric bill. I told him listen I gave you the electric bills for month and you told me no problem. So he got a plan. He is going to try and get energy assistance, and food stamps since he is on disability. Well he cut down a big maple tree last week, moved himself into my sold house and loves to ride his Harley to Sturgis. I have no problems with this scammer now. Im not paying for it anymore. The best news his genius girlfriend just quit her job in a Hospital that she worked at for 20 years to go hire a disability lawyer and see doctors like him. She said she only has to wait 2 years. Today I worked out with a 31 year old girl who went to Iraq. I have a new partner now and I love life again.

  10. Marilyn says:

    heading to Boone NC tomorrow and Blowing Rock. Staying overnight.

  11. Marilyn says:

    Actually I just looked at the home sales in NJ for the last let say 3 weeks and not that bad. Things look like they are selling. Someone has the bucks too. Not all cheap. So maybe NJ will make a huge comeback. Maybe its all wine and roses again. Maybe its the great schools and safety stuff. Or maybe its because NY is so expensive that NJ looks like a real bargain. Happy Days Are Here AGAIN!! CHOW CHOW CHOW. Proud of me little Pumpkin head!!

  12. NJT says:

    Dirty Harry down the street from us still thinks he can get a 2005 price for his hovel.

    *So many here in Belvidere like that. Eh, I’m a Turkey…vulture.

  13. Joe (Cup A) says:

    I keep hearing things are improving but don’t see a shred of evidence to that. My house lists for $15 under Zestimate and no offers (clean house, many new features). Those who buy now expect everything: the house should be like new, but priced like a short sale. Otherwise they don’t buy. Can’t blame them but can’t sell, either.

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