High Taxes Will Send Owners Packing
From The Record/Herald:
Assessing the damage
By MARGARET K. COLLINS
"PEQUANNOCK -- Property owners here are finding out that when it comes to what their holdings are worth -- and taxed -- there's just no predicting the effect of real-estate market whims."
"This year, a 60-year-old widow living in the flood plain is likely facing an above-average property tax increase. Across town, a 39-year-old homeowner is looking at a similar whack because his street has seen tear-downs and additions galore. But between them is a Route 23 business owner who has better news coming when his tax bill arrives this summer."
"They're just a few of the residents, landlords and merchants affected by a revaluation last year in this eastern Morris County township that adjusted the value of all properties -- commercial, residential and vacant -- to market levels."
"The revaluation -- the first since 1985 -- most notably recorded that just as in North Jersey at large, the housing boom sent residential values soaring in comparison to those of commercial and industrial holdings. That shifted more of the tax burden onto homeowners. With new values on official tax books for 2006, homeowners in general will take a hit, while business owners will get a break."
"How big or small? That question can't be answered in dollars until tax rates are finalized. But a Record analysis allows Pequannock landowners to get an idea before they receive their tax bills this summer."
"Owners of commercial properties will get a break compared with homeowners in the form of smaller increases, and even some tax cuts, because their values haven't risen as steeply as residential property since the last revaluation. The assessment on the typical commercial property rose 76 percent, while it jumped 145 percent for homes."
"Lower-end homes will take the biggest hit of all because their assessments went up the most, while those on higher-value homes went up less. Assessments on the most valuable homes generally rose 125 percentto 135 percent, while those on the least valuable homes shot up 160 percent to 180 percent."
Assessing the damage
By MARGARET K. COLLINS
"PEQUANNOCK -- Property owners here are finding out that when it comes to what their holdings are worth -- and taxed -- there's just no predicting the effect of real-estate market whims."
"This year, a 60-year-old widow living in the flood plain is likely facing an above-average property tax increase. Across town, a 39-year-old homeowner is looking at a similar whack because his street has seen tear-downs and additions galore. But between them is a Route 23 business owner who has better news coming when his tax bill arrives this summer."
"They're just a few of the residents, landlords and merchants affected by a revaluation last year in this eastern Morris County township that adjusted the value of all properties -- commercial, residential and vacant -- to market levels."
"The revaluation -- the first since 1985 -- most notably recorded that just as in North Jersey at large, the housing boom sent residential values soaring in comparison to those of commercial and industrial holdings. That shifted more of the tax burden onto homeowners. With new values on official tax books for 2006, homeowners in general will take a hit, while business owners will get a break."
"How big or small? That question can't be answered in dollars until tax rates are finalized. But a Record analysis allows Pequannock landowners to get an idea before they receive their tax bills this summer."
"Owners of commercial properties will get a break compared with homeowners in the form of smaller increases, and even some tax cuts, because their values haven't risen as steeply as residential property since the last revaluation. The assessment on the typical commercial property rose 76 percent, while it jumped 145 percent for homes."
"Lower-end homes will take the biggest hit of all because their assessments went up the most, while those on higher-value homes went up less. Assessments on the most valuable homes generally rose 125 percentto 135 percent, while those on the least valuable homes shot up 160 percent to 180 percent."
12 Comments:
In order to live her, somethings got to give, right? Salarys will not rise 10% per year; gasoline, food, property taxes, houses, car insurance, gas and electric and the list goes on. Somethings's going to break. I hear the creaking and bending now. I don't know what's going to happen but it's not going to be good.
My brother got a call this past week from a friend of his who is a realtor for many years in Glen Rock. The realtor said listing come on everyday, the sellers want a specific price set and the house sits with no offers. Just an FYI.
Taxes higher with property values decreasing is a scary thought.
If property values/ home prices do fall, will they lower tax on the property too?
jr
Toms River property Revaluation in 2007 !!!
Check the date of the last Property Re-valuation done in North Dover-toms river, NJ
Interesting article in the Ledger on the combined impacts of higher gas prices and payments on credit cards and the ripple through the economy.
http://www.nj.com/printer/printer.ssf?/base/business-3/114879203281440.xml
Pining for the cheap gas prices of the past
Some fear this summer-kickoff weekend may be hurt by trickle-down economic effect
Sunday, May 28, 2006
BY JOSEPH R. PERONE
Star-Ledger Staff
Bill Kozar is tired of hearing so- called experts talk about the strength of the economy.
He doesn't need a fancy chart to realize high gas prices are forcing people to cut back on spending.
"There are salesmen who live in their cars and get caught in traffic jams, and it costs them a fortune," said Kozar, a retired engineer from Pompton Plains. "It is whittling down their spending ability in stores and restaurants, and it gets worse the lower your income is."
Consumers took last year's runup in gas prices in stride -- regular gas was selling for slightly more than two bucks a gallon, interest rates were only at 3 percent. But this Memorial Day weekend is different.
Gas prices are hovering near $3 a gallon, and short-term interest rates have jumped to 5 percent, which is slowing home sales and boosting credit card and home equity rates. Analysts say the economy, which was moving at a healthy 5 percent clip in the first quarter, will likely slow to about 3 percent rate or less next month.
"Spending power is being hit by soaring tax payments as well as higher gas prices," said Ian Shepherdson, chief U.S. economist for High Frequency Economics in Val halla, N.Y.
The double whammy of stub bornly high gas prices and creeping interest rates is having a profound effect on consumers this year as they try to divvy up their cash among household bills, energy costs and debt payments.
"It's beginning to wear on the consumer," said Joel Naroff, chief economist for Commerce Bank in Cherry Hill. "But one thing we know is that the consumer is incredibly resilient. We can survive it, but it won't be pretty."
Consumer sentiment fell sharply lower this month compared to April because of rising fuel prices, said Steven Wood, chief economist for Insight Economics.
"This was also the fourth decline in the last five months," he said Friday. "... It is also at its lowest level since the immediate aftermath of Hurricane Katrina."
On Friday, regular gasoline is selling for an average of $2.91 a gal lon in New Jersey, up from $2.04 a year ago, according to the AAA Daily Fuel Gauge Report.
'HERE TO STAY'
There is no reason to think fuel prices will retreat as they did after hurricane season last year, according to Naroff, the economist.
"Households have to get it through their heads that $3 gas is here to stay," he said. "We will see changes in the purchase of motor vehicles, and some people will decide to cut back on going to the movies or not eat out as much at a fancy restaurant."
A survey released Wednesday by Consumer Reports showed 37 percent of the 2,400 people sur veyed say they plan to replace their car with a more fuel-efficient model.
Many companies are trying to figure out how to play the energy game to their advantage.
General Motors, for example, started a marketing program this week in Florida and California to give customers prepaid gas cards if they buy certain GM vehicles. The automaker will refund the difference if they pay more than $1.99 a gallon for fuel.
Shoppers who visit Web sites run by eFashion Solutions can get gas cards based on how much they spend, according to the company's chief executive, Edward Foy Jr. The Secaucus company handles online sales for Donna Karan, Shop JLO and Beyoncé Knowles' House of Dereon.
Consumers can get a $5 gas card on a $50 purchase or $10 on a $100 order, said Foy, a former Macy's executive.
"Ironically, some people say we are giving people money to drive to the store instead of shopping on line," Foy said. "But we have been able to retain a lot of customers this way."
His company wants to persuade existing customers to continue buying apparel. "Economic condi tions have an effect on all of us be cause it's more expensive to ac quire a new customer," he said.
FACTOR IT IN
Consumers are getting mixed signals about their favorite cash machine -- the housing market. Home sales increased 4.9 percent last month, to 1.19 million units, according to government data re leased Wednesday. However, that number is down 6 percent from a year ago. Interest rates on a 30-year fixed mortgage stand at 6.6 percent, compared with 5.63 percent a year ago.
Potential homebuyers say their plans to buy a home are at their lowest level since November 2004, according to a report by Merrill Lynch, and their plans to buy a new appliance have dropped to a seven-month low.
Housing will only fall further, according to Howard Rosencrans, chief financial analyst for Capital Growth Financial, a New York broker-dealer.
"So far, the decline in orders around the country has not translated into a meaningful erosion in housing prices," he said. "I fully ex pect they will, and the ripple effect will be very pronounced. I think it gets ugly."
Core inflation was up in both March and April, which is a red flag for the Federal Reserve. The Fed is now more likely to raise interest rates again in June, according to Peter Morici, a professor at Robert H. Smith School of Business at the University of Maryland.
"The slowing new home indus try is adding to woes of durable goods manufacturers, as new homes require plumbing, appli ances, climate control systems and other products lasting more than a year," Morici said. "Overall, flagging durable goods orders and moderat ing housing sales indicate the economy is slowing, perhaps more than Ben Bernanke and Fed policymakers are anticipating."
However, Naroff, the economist, disagrees. He said Fed Chairman Ben Bernanke might hold off on raising rates next month, only to increase them to 5.25 percent in late summer.
"The big meeting will be Aug. 8," he said. "If they don't do it in August, then we might be done for the year."
© 2006 The Star Ledger
“‘I think the reason we are going to see so many foreclosures, so many more than we have ever had in the past, is because a broker or loan originator has gotten people into these crazy kinds of loans,’ said Steven Schneider, president of the Florida Association of Mortgage Brokers.”
BOYCOTT BIDDING!
Starve Realtors STARVE!
BOOOOOYAAAAAAAAA
Bob
Flippers in peril:
Speculators in particular seem to be fueling the renter's market. As buyers drag their feet, people who thought they could turn a quick buck by buying real estate last year have been left with empty houses and expensive mortgages. "They were hoping to flip their properties but they didn't, so now they're trying to rent them out," said Putnam.
Terrence McManus, president of Florida RentFinders, said now that the interest-only periods have ended on many investors' mortgages, "they're trying to get income out of their houses any way they can." McManus said that most of the landlords he works with are renting at a loss. "None of them is cash-flow positive," he said.
http://thehousingbubbleblog.com/?p=761
We see this here in NJ as well, with so many houses listed that are obviously vacant (no couch in living room, no dining room table, no furniture in master bedroom), and "investors" renting at big losses.
i just looked at a rental for 2200 in sparta. purchased in nov. 2005 the " investors " didnt do a thing no paint, old stained carpets ( shag mind you ) how old could they be? paid 315,000 if your going to do it give some kind of effort. oh it will appreciate %20 a year you dont have to
The couple and their two kids leased a 2,000-square-foot, three-bedroom house in the gated
Got to love this from the Housing Bubble Blog:
" $1,500 per month, about 40 percent less than the monthly mortgage payments on a comparable home. ‘It was the same price as an apartment, so we might as well get the house,’ Lewis, said of their decision.”
“Welcome to the flip side of the housing boom, where renters can afford brand-new dream homes while landlords struggle to meet their monthly mortgage payments.”
Trenton turns to fees to avoid risky taxes
Sunday, May 28, 2006
By JOHN P. McALPIN
TRENTON BUREAU
Yury Podolsky lives on a $350 monthly check from Social Security, nearly all of which quickly gets spent on the doctors, specialists and other services needed to treat his seizure disorder and mental retardation.
If Governor Corzine's budget is approved, Podolsky will begin paying $2 a month for each of his prescription drugs, which now cost him nothing.
"It's $120 a year. It's a lot of money," said Podolsky's mother Olga, his primary caregiver. "For them [the state], a $2 co-pay is basically nothing."
Actually, Corzine budget planners are counting on the prescription co-pays to raise $13 million for the fiscal 2007 budget. The co-pays would join a lengthy list of fees, surcharges and minor taxes that serve as a mainstay supply of cash to meet government expenses and finance popular programs, like property tax rebates.
In recent years, Trenton has become more dependent on fees as revenues failed to keep pace with the soaring cost of government spending. Lawmakers and governors have dramatically increased long-standing fees and created new ones to help balance the books.
Corzine's budget follows the playbook of his recent predecessors. His $30.9 billion plan anticipates raising $17 million from a new surcharge on luxury cars and gas guzzling SUVs. The governor also is counting on another $17 million from a new fee on sales of high-end commercial properties. A new surcharge on water use also is proposed.
Critics contend that the fees have become a hidden tax to help ballooning state budgets instead of paying for the programs and services the charges are intended to support.
More...
http://tinyurl.com/n27rr
We are planning to move to north jersey early next year and are renters (waiting it out no doubt!!). What do people suggest as a reasonable rent for the morristown area for a 3 bedroom townhouse or single family home? Thanks.
Anon at 12:21 AM,
Around $2000 in the Parsippany Area.
Also, try Rachel Gardens in Pine Brook (or is it Montville) ? If you have kids, it is a very good school system.
CNS
The Pequannock Tax rate is a joke. There have been many new projects in this town since the last reval including The Glens - 583 Units paying taxes....CedarCrest - Hughe project should have generated a lot of tax revenue, All the commerical property on rte 23 and the industial park on West parkway...what percentage of the taxes are these commerical interests paying?
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