Home Prices continue to hit new highs

Posted on October 26, 2015 by grim

From HousingWire:

Home prices rise 0.3% in August, up 5.6% since January

Home prices were up 0.3% for the month, rising 5.5% on a year-over- year basis, according to the August house price index from Black Knight Financial Services.

This puts national home prices up 5.6% since the beginning of the year and 27% since the bottom of the market at the start of 2012.

At $253,000, the national level HPI is now just 5.3% off its June 2006 peak of $268,000.
…
New York led gains among the states, seeing 1.8% month-over-month appreciation, and accounted for every one of the month’s top 10 metro area movers as well.

Among the nation’s 20 largest states, 3 hit new peaks again in August:

New York ($358,000)
Tennessee ($177,000)
Texas ($215,000)
…
Of the nation’s 40 largest metros, 9 hit new peaks:

Austin, Texas ($286,000)
Boston, Massachusetts ($409,000)
Dallas, Texas ($218,000)
Denver, Colorado ($326,000)
Houston, Texas ($221,000)
Nashville, Tennessee ($217,000)
Portland, Oregon ($319,000)
San Antonio, Texas ($195,000)
San Francisco, California ($720,000)

Posted in Housing Recovery, National Real Estate | 70 Comments

Weekend Legal Discussion – Hospitals should pay property taxes

Posted on October 24, 2015 by grim

For the lawyers, from Lexology:

Pretty sure that hospitals and doctors don’t need to have subsidized property taxes.

New Jersey Tax Court decision may signal a troubling trend in challenges to non-profit entitie

The New Jersey Tax Court’s decision in AHS Hosp. Corp. v. Town of Morristown, DOCKET Numbers.: 010900-2007, 010901-2007, 000406-2008 (Decided June 25, 2015), has triggered widespread concern among hospital enterprises and other non-profit entities benefiting from property tax exemptions. The issue in the case was whether Morristown Memorial Hospital (MMH) should benefit from the New Jersey real property tax exemption for non-profit organizations. The town of Morristown contended that MMH’s use of the property did not fit the definition of tax exempt activities under N.J.S.A. 54:4-3.6, which provides an exemption from real property tax for:

all buildings actually used in the work of associations and corporations organized exclusively for hospital purposes, provided that if any portion of a building used for hospital purposes is leased to profit-making organizations or otherwise used for purposes which are not themselves exempt from taxation, that portion shall be subject to taxation and the remaining portion only shall be exempt … . (emphasis added).

The court embarked on a lengthy discussion of the history of hospitals in the United States, which concluded that hospitals largely have evolved from eleemosynary institutions for the poor that were by definition charitable into fee based profit-making enterprises bearing little resemblance to their predecessors. The court then reviewed the statute under existing precedent, and delved into whether three criteria were satisfied:

(1) [the owner of the property] must be organized exclusively for the [exempt purpose]; (2) its property must be actually and exclusively used for the tax-exempt purpose; and (3) its operation and use of its property must not be conducted for profit.

(citations omitted). The court held that in and of itself, an exempt purpose (i.e. operation of a hospital) is not sufficient to support an exemption. The entity also must demonstrate that the property for which the exemption is granted is “exclusively used for the exempt purpose” and does not undertake “for profit” activities.
…
New Jersey and New York are among a number of states where municipalities, struggling to find needed funds, are looking for ways to raise revenue. The AHS decision is particularly damaging to claims for property tax exemption. It remains to be seen whether appellate review or legislative action will alter the decision. While the New York statute appears more advantageous for hospitals, Crouse Health seems to open the door to the distinction between hospital activity and the commercial private practice of medicine. It thus behooves hospitals to review how their real estate is used and, to the greatest extent possible, be prepared to demonstrate what portion of a property is used exclusively by the hospital and what portions are used by physicians engaged in private practice. Undoubtedly, the question of what constitutes for profit activity is going to become a prevalent aspect of tax exemption cases. Hospitals must clearly separate traditional hospital activities from those that may be more akin to profit making enterprises and take care to ensure that there is no commingling of assets. Furthermore, hostpitals will need to be prepared with a thorough analysis to support that executive compensation is not excessive and that physician compensation is linked to measurements that will not be characterized as demonstrating a “profit-making purpose.”

Posted in New Jersey Real Estate, Politics, Property Taxes | 39 Comments

September sales jump, second best level since 2007

Posted on October 23, 2015 by grim

From the WSJ:

U.S. Existing Home Sales Surge in September

Sales of previously owned homes swung to a big increase in September, putting the market back on track for its strongest year since 2007.

Existing-home sales climbed 4.7% last month to a seasonally adjusted annual rate of 5.55 million, the National Association of Realtors said on Thursday, just shy of the postrecession high touched in July.

September’s gains came on the heels of an unexpectedly weak August. The NAR on Thursday revised down August’s figure to 5.3 million from an initial estimate of 5.31 million. Stock-market turbulence and uncertainty about interest rates might have prompted some buyers to hold off on making purchases in August, economists noted.

The September increase puts the market on pace for its best year since before the recession. Better job growth, continued low mortgage rates and pent-up demand are fueling activity, according to Lawrence Yun, chief economist for the Realtors group.

Many economists expect the pace of sales to flatten or slow later this year, but Mr. Yun said sales still should record their best performance in eight years.

“We knew that the recovery would be coming, and it’s been a slow, steady process,” said Mr. Yun. “This year it’s finally coming out.”

Posted in Economics, Housing Recovery, National Real Estate | 96 Comments

Millennials to lead the housing charge?

Posted on October 22, 2015 by grim

From MarketWatch:

Why millennials should buy a home today

Sachita Kumar did something that few people her age appear to be doing in 2015: She bought a house.

“We decided that we just didn’t want to pay someone rent, so we decided to own something,” says Kumar, 26, a telecommunications consultant. She and her husband bought a townhouse in Somerset, N.J. and, unlike many Americans in their age group, they were able to afford the substantial 20% down payment. “A reason a lot of millennials don’t own is because of that,” Kumar says.

There are many practical reasons why millennials hold off on buying. Young adult employment has risen to around 7.7%, according to the Pew Research Center, up from 6.2% in 2007. Kumar has advice to those who can afford it: “You should definitely buy.”

She has a point. There are only two metro areas where renting is cheaper than buying for people aged 25 to 34, new data from real-estate website Trulia found. Renting is 5% less expensive than buying in Honolulu and 2% less expensive in San Jose, Calif., but buying is a no-brainer in 98 of 100 metro areas. It’s also 11% cheaper to buy than rent in the New York and New Jersey metro areas, where Kumar bought, and 10% cheaper in Newark, N.J. and San Diego. And it’s more than 40% cheaper to buy than rent in Houston and San Antonio, Baton Rouge and New Orleans, Syracuse, N.Y., Fort Lauderdale, Fla., and Miami, Oklahoma City, and Detroit.

Millennials have received a lot of criticism for holding back the housing market by not buying as many homes as economists (and would-be sellers) would like. Five years into the economic recovery, many continue to live at home with their parents: There were 71% of adults aged 18 to 34 (excluding full-time college students aged 18 to 24) living independently in 2007 versus just 67% in 2015, according to a recent study by the Pew Research Center. Although 74% of millennials expect to buy a home, more than half plan to wait until 2018, a separate survey last month of 6,000 millennial renters by Apartmentlist.com found.

For Americans of all ages, buying a home rather than renting is 36% cheaper nationwide, Trulia concluded. That’s the biggest difference since 2012 when it was 38% cheaper to buy than rent. For those aged between 25 and 34, it’s only 23% cheaper than renting. One caveat for all would-be buyers: Interest rates have returned to near historic lows of 3.85%, after climbing to 4% last year, but many economists expect rates to go up again within the next 12 months. An increase of 25 to 50 basis points could push mortgage rates to a range of 4.15% to 4.4%, he says, but rates would have to nearly double to about 6.5% to equalize the buy versus rent equation for potential young adult buyers.

Posted in Demographics, Economics, Housing Recovery, National Real Estate | 61 Comments

GSE Reform Dead

Posted on October 21, 2015 by grim

From HousingWire:

GSE leadership no longer expecting reform

The government-sponsored enterprises are getting back to their core mission, shaking the idea that a resolution to conservatorship is just around the corner and reshaping their business models to reduce risk to taxpayers while expanding access to credit.

That was the message from Timothy Mayopoulos, president and CEO Fannie Mae and Donald Layton, CEO of Freddie Mac, speaking on the “A Conversation with GSE Leadership” panel at the Mortgage Bankers Association’s 102nd Annual Convention and Expo in San Diego, California. Nearly 4,500 real estate finance professionals are in San Diego this week for the convention.

Earlier Monday, Fannie Mae announced it is simplifying the lending process for lenders and borrowers with a series of updates to its mortgage offerings. One of the biggest changes is that beginning in mid-2016, Fannie Mae will require lenders to use trended credit data when underwriting single-family borrowers through Desktop Underwriter. Fannie is working with Equifax and TransUnion to provide the data.

Mayopoulos said that the company’s primary revenues are now coming through guarantee fees as a stable, more reliable revenue source, he said, and that the company is shifting more credit risk to private investors.

He called it a “more sustainable and reliable business structure.”

Layton noted that the GSEs are into their eighth year of conservatorship, and that a “big bill” out of Washington to “redo our entire housing finance system” is years away.

“Conservatorship will be with us for a while. And there is no playbook for running a company in conservatorship,” Layton said.

Layton emphasized the focus on credit risk transfer.

“Credit risk transfer is our entire business model now,” Layton said.

He said that Freddie Mac has rid itself of the early conservatorship mindset, which was hesitant, waiting to get orders from government, and not sure if it was about to end.

“We’re focusing on our classic mission to support families by increasing stability, liquidity and affordability of mortgage market,” he said.

Posted in Economics, Housing Recovery, Politics, Risky Lending | 84 Comments

Even power plants get foreclosed on in Jersey

Posted on October 20, 2015 by grim

Not residential real estate, but how can I not post this fiasco of epic proportions.

From Philly.com:

Bank begins foreclosure on power plant at Revel

A bank is foreclosing on the power plant at the center of a dispute that has helped keep Atlantic City’s former Revel casino shut.

Bank of New York Mellon has begun foreclosure proceedings against ACR Energy Partners, the sole source of utilities for the casino, which closed Sept. 2, 2014.

ACR and Revel owner Glenn Straub have been unable to agree on a deal to provide utility service for the building.

Under an emergency order from the New Jersey Department of Community Affairs, ACR is providing enough electricity to power fire-safety systems at Revel. But the bank says Straub has fallen $800,000 behind on those payments.

Guy Amoresano, an attorney for the bank, said in a court filing that Straub’s Polo North Country Club was in “flagrant contempt” of a June court order mandating payments for the utility service ordered by the state.

Posted in Economics, Humor, New Development, Unrest | 89 Comments

“I don’t know where it ends, but it doesn’t end in a good place.”

Posted on October 19, 2015 by grim

From the Daily Record:

N.J. taxes report: Businesses say fix N.J. now

Ralph Zucker walked into the Bell Labs building one day in 2007, looked around and saw the once-bustling site contained only a vast, eerie silence.

The shell was intact. Four separate pavilions connected by a ring of walkways were under one glass-paneled roof that allowed sunlight to stream in. But now it looked like a giant’s greenhouse, where nothing grew.

Google wasn’t coming here. Apple wasn’t coming here. So Zucker, the president of Somerset Development, decided he would need to turn the iconic — and seriously outdated — corporate office into a campus not only with technology companies, but also with retailers, houses, a health center and hotel.

“If we create great places ourselves, then people will not have to get up in the morning and travel an hour, an hour and a half,” Zucker said. “People (here) get up every morning and travel into Manhattan and sit in line or take the ferry or take the bus or the train, and that’s an arduous commute. But they go there because those are great places.”

New Jersey could use more great places, but building them is a chore. The state suffers from heavy tax burdens that leave it among the toughest for businesses to operate, many surveys show. And yet, with a transportation fund that is nearly broke, it needs more tax revenue to fix broken down roads and bridges.

It has prompted both the state and towns like Holmdel to dig deep into their playbook to provide tax relief, doling out billions of dollars in potential tax breaks to employers promising jobs in return.

Their strategy has barely kept New Jersey’s economy afloat. The state’s economic growth of 0.4 percent in 2014 ranked 46th lowest in the nation.

It wasn’t always this way. New Jersey was once a low-cost alternative to Manhattan, the prototype for America’s suburbanization after World War II. Giant companies and their workers moved here in tandem. And the state — with its cheap land, skilled workers and transportation system — was to be envied. As recently as 2000, the state’s unemployment rate was 3.5 percent.

Now, its biggest assets are unraveling.

The long march from a global capital for innovation to bottom of the pack has prompted business leaders to say enough is enough. They’re crying out for lawmakers to come up with a long-term strategy that paves the way for a new generation of workers. It’s a generation that doesn’t want to sit in traffic or on a train for hours. They don’t have to; with technology, they can live anywhere.

“There’s just too many issues that we’re facing as a state and too many issues we’re facing in the future, that if we don’t start taking action and making some improvements, we’re going to dig our hole deeper,” said Tom Bracken, president of the New Jersey Chamber of Commerce. “I don’t know where it ends, but it doesn’t end in a good place.”

Posted in Demographics, Economics, Employment, New Jersey Real Estate | 85 Comments

Prospective buyers don’t want to eat Friskies

Posted on October 18, 2015 by grim

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.”

Posted in Economics, Housing Recovery, New Jersey Real Estate | 16 Comments

NJ Jobs up 4700 in September

Posted on October 16, 2015 by grim

From the Record:

N.J. added 4,700 jobs in September; jobless rate ticked down

New Jersey added 4,700 jobs in September, putting the state’s job market back on the path of slower growth seen at the start of the year, after the dramatic job losses of the summer.

The state added 3,400 private-sector jobs and 1,300 government jobs, boosting the year-to-date total to 39,600, according to the monthly employment report by the New Jersey Department of Labor and Workforce Development.

If the state keeps up that pace, an average of about 4,400 a month, it would add about 50,000 jobs this year. That pace would be higher than the average annual increase of about 35,500 a year from 2011 to 2014.

The jobless rate fell to 5.6 percent from 5.7 percent in August, above the national rate of 5.1 percent.

Economists said that after New Jersey’s job losses in June and July, when the state lost a combined total of 23,000 jobs, the labor market appears to have returned to the moderate – albeit volatile — gains shown in the early part of the year. The state added an average of 6,000 jobs a month from January to May.

“I wouldn’t call it robust, I wouldn’t call it strong,” said Charles Steindel, the state’s former chief economist under Governor Christie. “But certainly it is recovering.”

The report also revised the August employment increase of 13,600 jobs upward, adding 1,900 jobs for a gain of 15,500 jobs in the month. The state has added 20,200 jobs in the last two months.

“This is very much a slow-growth jobs recovery,” said Patrick O’Keefe, an economist with CohnReznick in New York and Roseland. “It’s sort of like climbing up a greased pole — you make some progress and then you slip back. This month we made some progress; it’s a better report than we saw in midsummer.”

O’Keefe said state employment has now grown by 1 percent this year, compared with the national increase of 2 percent over the same period.

Both economists said the unemployment rate fell because of people leaving the workforce, likely because they are discouraged and don’t believe they can find a job, rather than because they had become employed.

Posted in Economics, Employment, New Jersey Real Estate | 110 Comments

Will NJ ever recover?

Posted on October 15, 2015 by grim

From the Record:

NJ leads the nation in foreclosure activity

New Jersey continued to lead the nation in foreclosure activity in the third quarter, as the mortgage industry deals with a backlog of distressed properties in the state, RealtyTrac reported Wednesday.

Foreclosure activity in the state rose 27 percent from a year ago, with one in every 171 housing units facing a foreclosure filing during the quarter — more than twice the national average. Nationally, foreclosure activity has returned to pre-recession levels, according to RealtyTrac, which is based in California and follows the foreclosure market nationwide.

New Jersey has been slower to deal with homeowners who fell into default during the housing bust because it is one of about two dozen states where foreclosures must go through the courts. In addition, the state put a near-freeze on foreclosure activity several years ago while the mortgage industry faced accusations of abusing borrowers’ rights in the rush to evict. The state is still catching up.

“In states such as New Jersey, Massachusetts and New York, a flood of deferred distress from the last housing crisis is finally spilling over the legislative and legal dams that have held back some foreclosure activity for years,” said Daren Blomquist, vice president at RealtyTrac.

Many of those properties, he said, have been poorly maintained and “will sell at more deeply discounted prices, creating a drag on overall home values.”

In Bergen County, one of every 293 households faced foreclosure activity during the quarter, up 22.6 percent from a year earlier. In Passaic, one in every 139 households faced a foreclosure filing, up 25 percent from a year earlier.
New Jersey continued to lead the nation in foreclosure activity in the third quarter, as the mortgage industry deals with a backlog of distressed properties in the state, RealtyTrac reported Wednesday.

Foreclosure activity in the state rose 27 percent from a year ago, with one in every 171 housing units facing a foreclosure filing during the quarter — more than twice the national average. Nationally, foreclosure activity has returned to pre-recession levels, according to RealtyTrac, which is based in California and follows the foreclosure market nationwide.

New Jersey has been slower to deal with homeowners who fell into default during the housing bust because it is one of about two dozen states where foreclosures must go through the courts. In addition, the state put a near-freeze on foreclosure activity several years ago while the mortgage industry faced accusations of abusing borrowers’ rights in the rush to evict. The state is still catching up.

“In states such as New Jersey, Massachusetts and New York, a flood of deferred distress from the last housing crisis is finally spilling over the legislative and legal dams that have held back some foreclosure activity for years,” said Daren Blomquist, vice president at RealtyTrac.

Many of those properties, he said, have been poorly maintained and “will sell at more deeply discounted prices, creating a drag on overall home values.”

In Bergen County, one of every 293 households faced foreclosure activity during the quarter, up 22.6 percent from a year earlier. In Passaic, one in every 139 households faced a foreclosure filing, up 25 percent from a year earlier.

Among metropolitan areas, Atlantic City had the nation’s highest foreclosure activity during the quarter, with one in every 97 housing units facing a filing in the third quarter. Among states, Florida came in second after New Jersey in the rate of foreclosure activity. New York was ranked 18th.

Posted in Economics, Foreclosures, New Jersey Real Estate | 165 Comments

Foreclosures decline, NJ still in foreclosure logjam

Posted on October 14, 2015 by grim

From MarketWatch:

CoreLogic Reports 36,000 Completed Foreclosures in August 2015

CoreLogic…today released its August 2015 National Foreclosure Report which shows the foreclosure inventory declined by 25.2 percent and completed foreclosures declined by 20.1 percent compared with August 2014. The number of foreclosures nationwide decreased year over year from 46,000 in August 2014 to 36,000 in August 2015, representing a decrease of 68.9 percent from the peak of 117,357 completed foreclosures in September 2010.

Completed foreclosures reflect the total number of homes lost to foreclosure. Since the financial crisis began in September 2008, there have been approximately 5.9 million completed foreclosures across the country, and since homeownership rates peaked in the second quarter of 2004, there have been nearly 8 million homes lost to foreclosure.

As of August 2015, the national foreclosure inventory included approximately 470,000, or 1.2 percent, of all homes with a mortgage compared with 629,000 homes, or 1.6 percent, in August 2014.

CoreLogic also reports that the number of mortgages in serious delinquency (defined as 90 days or more past due, including those loans in foreclosure or REO) declined by 20.7 percent from August 2014 to August 2015 with 1.3 million mortgages, or 3.5 percent, in this category. This is the lowest serious delinquency rate since January 2008. The foreclosure rate (defined as the share of all loans in the foreclosure process) was at 1.2 percent as of August 2015, which is back to January 2008 levels.
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The five states with the highest number of completed foreclosures for the 12 months ending in August 2015 were: Florida (94,000), Michigan (47,000), Texas (32,000), California (27,000) and Georgia (26,000). These five states accounted for almost half of all completed foreclosures nationally.
…
Four states and the District of Columbia had the highest foreclosure inventory rate as a percentage of all mortgaged homes for the 12 months ending in August 2015: New Jersey (4.6 percent), New York (3.7 percent), Florida (2.6 percent), Hawaii (2.5 percent) and the District of Columbia (2.4 percent).

Posted in Foreclosures, Housing Recovery, National Real Estate, New Jersey Real Estate | 110 Comments

Philly not worth it?

Posted on October 13, 2015 by grim

From CBS:

Report: Philadelphia Among Top 10 Most Overvalued Housing Markets In U.S.

Looking to buy a home in Philadelphia? According to a new report, it is one of the top 10 most overvalued housing markets in America.

The report was released by real estate analytics firm CoreLogic.

Researchers say overvalued housing markets have prices that are 10 percent or more above the long-term sustainable level.

As for Philadelphia, the report finds,“Home prices have ascended rapidly in the Philly area (up 16.7% since early 2014, which means it has the fastest home price appreciation of any town on this top-10 list), and now they are priced at 14.2% over sustainable levels.”

Researchers examined market data from the first half of 2015 for the report. Philly was ranked eighth.

Posted in Economics, Housing Bubble, National Real Estate | 157 Comments

Sword of Damocles

Posted on October 12, 2015 by grim

Nothing but fantastic journalism from the APP, kudos to Paul D’Ambrosio – This is fantastic…

WE CAN’T AFFORD NEW JERSEY

New Jersey’s regressive property tax system has long drained the wallets of workers and retirees.

As the experience of the Stevenses shows, this ballooning levy has crossed a terrible threshold, one that is pushing homeowners out of state and changing the way we live.

When Gannett New Jersey media examined this issue in 2009 and 2010 in a ground-breaking investigation, it found the tax burden was nearly intolerable, especially since the nation was enthralled in a deep recession, with falling wages, rampant foreclosures and job losses not seen since the Great Depression. Yet, in New Jersey, property taxes actually rose as people lost their jobs.

What’s more, as the national economy improved by 2014, New Jersey lagged in most economic indicators. The state continues to hemorrhage jobs — and residents — to fast-growing southern and western states. Those fleeing are taking billions of dollars with them – money that isn’t being replaced – leaving less capital for the state’s long-stalled economy, and a tax burden resting more heavily on remaining residents.

The loss goes deeper than dollars and cents.

Property taxes are tearing apart the very fabric of communities: Families. Security. Peace of mind.
…
The property tax is New Jersey’s sword of Damocles – archaic, destructive and an intractable harbinger of doom that hangs over the head of each homeowner. The law cares not a whit about your ability to pay, even if you just lost your job.

As much maligned as the property tax is, it remains the government’s single most important source for life. It funds schools, police, road repairs, trash collection and a multitude of other government functions.

Five years ago, at the height of the recession, which claimed tens of thousands of jobs and forced sizable salary cuts, the tax drained $25 billion from households. It cost an average of $7,281 per home.
…
Now, half of all tax revenue comes from this levy – $27 billion in 2014 – to fuel 565 towns, 586 school districts and dozens of local agencies with nearly boundless powers to hit your wallet. That’s an average of $8,161 per home.

By 2020, at its current pace, the tax will top nearly $30 billion.

That will be an average statewide property tax of $9,000 per home.

Today, tens of thousands of homeowners would cheer a $9,000 bill. The average property tax has already topped $10,000 in three of 21 counties and 127 towns. It is more than $15,000 in 25 towns.

With New Jersey ranking among the bottom in the nation for economic growth, incomes are not about to skyrocket to pay for the escalating local tax costs. In fact, the average household income has gone backward since the recession, when inflation is factored in.

Posted in New Jersey Real Estate, Property Taxes | 83 Comments

Maybe a little NYC magic will rub off on us?

Posted on October 10, 2015 by grim

From the NYT:

Manhattan Apartment Prices Near Million-Dollar Mark, Reports Say

A million dollars doesn’t buy what it used to in Manhattan. A combination of high demand and too few listings pushed the median sales price for a Manhattan apartment to just shy of a million dollars in the third quarter of the year, setting a record high, according to several market reports to be released on Thursday by major real estate brokerage firms.

The median sales price, which reflects the middle of the market and is less affected by high-end sales, was $999,000, according to a report by the Corcoran Group. Reports from other brokerage firms, using different figures and methodologies, put the median price at or just below the million-dollar mark, with most calling it a record.

“It seems like a lot of money anyplace else,” said Dottie Herman, chief executive of Douglas Elliman Real Estate, which calculated a median price of $998,000. In Manhattan, “what you get for a million dollars is not a lot of space,” she said, pointing out that buyers on a budget must turn to New York’s other boroughs or to the suburbs to find better values.

After rising incrementally over the course of last year, inventory has essentially been flat since January, said Jonathan J. Miller, president of the appraisal firm Miller Samuel and the author of the Douglas Elliman report. In the third quarter, Mr. Miller said, there were 5,654 available listings, approximately 20 percent below the 10-year average of 7,047 available listings. “That creates price pressure,” he added.

It also makes for rapid-fire sales. The amount of time that listings spent on the market fell 20 percent to a record low of 73 days in the third quarter, according to the Douglas Elliman report. “You have to be very competitive and you have to be quick,” especially at the lower end of the market, Ms. Herman said. “I tell people, ‘You really have to have your ducks in order financially and know the market yourself.’ ”

Overall, the number of closed sales was up for the quarter, driven by robust closings in new development. While prices remained high across all market segments, the average sales price for the luxury market, defined as the top 10 percent of closed sales, dropped 12 percent in the third quarter, to $6.73 million, compared with $7.68 million during the same period last year, as fewer luxury properties closed, according to the Corcoran report.

Posted in Economics, Housing Recovery, NYC | 42 Comments

Going out in style!

Posted on October 9, 2015 by grim

From the NY Post:

Couple’s ‘last hurrah’ bash at foreclosed Hamptons house

A couple that has lived at a multimillion-dollar East Hampton mansion since it was foreclosed on in May 2014 were finally given the boot on Thursday — but not before getting in one last free summer of fun.

“They partied here all summer,” a source said of David and Gia Walsh, who had been staying at the 80 Further Lane home even after it was sold to the mortgage lender for $8 million at auction in April. “It’s $300,000 to $500,000 to rent for the summer. They got a free summer out of it.”
…
The couple, whose primary residence is in Bronxville, even threw a “huge” party, the source added. But it was their last hurrah in the lavish home after receiving an eviction notice in mid-August.

On Thursday, a sheriff showed up to the beachfront property with a moving company, which chucked everything the couple left behind to the curb — including three 50-inch flat-screen TVs, a pool table and disassembled treadmills.

Their belongings were taken to the town dump, where they have 24 hours to claim them.

David Walsh, who is president and CEO of a networking and software company, and Gia Walsh, a small-time movie producer, bought the 8,000-square-foot home for $2.7 million in 1999.

Posted in Foreclosures, Humor | 86 Comments