Friday, May 05, 2006

New Jersey State Deficit Increases

From the Express Times:

State deficit now $5 billion

Meeting with a mix of resignation and disbelief in the Legislature, state Treasurer Bradley Abelow said Thursday an erosion in tax collections means New Jersey's deficit has grown by about $500 million.

The revised collection figures would mean Corzine is heading into next year with a $5 billion hole in his budget.

"The governor has directed us to find additional cost savings measures," Abelow said in an afternoon briefing given to reporters. "Literally, we're still opening envelopes, depositing checks and counting."

According to Treasury officials, collections of the Corporate Business Tax fell $150 million to $175 million short of budgeted projections while income tax revenue was down about $300 million to $10.5 billion.

While he did not give specifics, Abelow said sales tax collections were on track.

17 Comments:

Anonymous Anonymous said...

Higher property taxes on the way again.
I know I know house prices are immune to higher interest rates ,higher property taxes ,higher energy cost, stagnant incomes, exodus of people leaving the state, higher health insurance, affordability at record lows and just about anything you can think of.

5/05/2006 07:24:00 AM  
Anonymous Anonymous said...

we need to see some convictions!
Petillo, previous head of UMDNJ walked away with a 600K severence package even after all the allegations were made public... Pre-K school funding program was a big scam that bilked millions from tax payers. Maybe its time to start axing worthless agencies and overlaps... we need to see people get arrested.. although tax payers will be paying for the lawyers of course..

5/05/2006 08:02:00 AM  
Anonymous Anonymous said...

check out this articl about boston RE. Grim I think you should link this on the main screen.

40% decline

http://business.bostonherald.com/realestateNews/view.bg?articleid=137808

-K

5/05/2006 08:54:00 AM  
Anonymous Anonymous said...

Grim

on 2020 tonight

Buyers Take Risks in Overheated Markets

http://abcnews.go.com/2020/story?id=1923550&page=1

-K

5/05/2006 09:00:00 AM  
Blogger grim said...

Time..

Time..

Time..

Seems like many readers here think this is going to play out in a matter of days or weeks.

That isn't the case, the time scale we need to keep in mind is one set in months, if not years.

We're only half a year past what I called the top of the market.

http://www.youdovoodoo.com/80sbubble.htm

And if we look back at the last downturn, we're currently somewhere around 1998 or 1989.

Will it play out faster or slower this time. History rhymes, it doesn't repeat.

5/05/2006 12:20:00 PM  
Anonymous Anonymous said...

I agree with Grim....patience my friends. This will take awhile to play out. Real Estate is not the same as a stock which could "correct" much more rapidly....

5/05/2006 12:56:00 PM  
Anonymous Anonymous said...

Housing Bust...

Ba ba ba ba ba ba ba BOYCOTT HOUSES!

Remember how you were treated during the bubble?
In a few more months sellers and realtors will be kissing your feet for any bid.

Bid 25% less and walk away.

BOOOOOOOOOOOYAAAAAAAAAAAA

Bob

5/05/2006 02:03:00 PM  
Anonymous Anonymous said...

No MAAS!

Just Say "NO" to RIPOFF house prices.

Ba ba ba ba ba ba BOYCOTT HOUSES!

Seller arrogance turned into denial leading to our next phase Pa pa pa pa pa PANIC!

BOOOOOOOOYAAAAAAAAAA

Bob

5/05/2006 02:06:00 PM  
Anonymous Anonymous said...

Richard-

sort of agree, but not really. i say go back to 2000-2002 prices add in inflation (3-5%) multiply by the # of yrs from then until now.

back of the envelope calc's
2001-2006 price increase
something like 4% x 5 yrs = 20% increase
example base 2001 price = 250
current 2006 price = 500
more realistic price = 250 x 1.2 = 300 (give or take few grand)
difference = 500-300=200
% decline possible = 1-300/500= -40%

Even if you you through in a few more percentage points for dollar devaluation, etc., it's more like a 20-30% decline in prices based on more historical pricing...

5/05/2006 02:28:00 PM  
Anonymous Anonymous said...

yes, bob, i do remember when the realtors were shoving overpriced crap down my throat...those very same elite are now inundating me with phone calls and emails... thankfully there are delete buttons.

In any event, I don't think there is any formula that can accurately predict the outcome here. There are too many variables. It's simply a tide and time situation.

In the meanwhile, I've removed myself from the RE market equation and will just watch and wait...

5/05/2006 02:51:00 PM  
Anonymous Anonymous said...

South NJ MLS 4660689. This seems to be on way to be listing with record number of reductions.
Flipper bought this on 03/15/2005 for 254,000 from the earlier owner who bought new in 2004 for 197,654.

01/11/2006 310,000
02/23/2006 299,900
03/13/2006 294,900
03/27/2006 292,900
03/30/2006 292,000
04/21/2006 291,900
04/28/2006 291,000
05/05/2006 289,900

5/05/2006 03:23:00 PM  
Anonymous Anonymous said...

"In the meanwhile, I've removed myself from the RE market equation and will just watch and wait."


A good plan, I think. Otherwise it's just a constant drain to look at crappy houses that are over-priced. Even if you can afford the price, who wants to live in a crappy house that's also dropping in value every month?

In 12-18 months, it will be time to start looking. Until then, it's fun to watch the interest payments from the bank each month.

5/05/2006 05:11:00 PM  
Anonymous Anonymous said...

For those who think that prices will just level off and then start increasing again - to this I ask you - where is this new influx of money going to come from? In ten years, the boomers are going to be in one small house or checking out, and they wont be taking their houses with them. Were talking a huge constant stream of supply coming on the market. From where - the govt? Last I checked, we have trillions of entitlements coming down the pike that no politician wants to cut. No money there. How about the taxpayers? Well, the govt is going to have to get the money to buy their votes from somewhere, so the taxpayer wont have it either.

In short, I see a crash coming on, and then a long slow bleed or stagnation, kind of like what we've seen in Japan for the last 15 years. To move this behemoth housing market up after the crash is going to take a huge influx of capital. Capital that wont exist anywhere.

5/05/2006 05:19:00 PM  
Anonymous Anonymous said...

If RE simply stagnates, the economy is in trouble. Many in RE related fields will lose their jobs, which are dependant on unsustainable growth.

This is largely true. RE has been the engine in the US economy since 2001 providing a lot of jobs. However, in the best case scenario, the rest of the economy has finally picked up and become strong enough so it can absorb all those RE agents, brokers and construction workers.

Of course, it cannot absorb all RE workers, but at least it should be able to smoothen the effects of RE bust.

I'm a renter and I hope and believe that there is a price decline (~30% in real terms in 4 years) but at the same time I hope the economy won't crash (I don't want to lose my job).

5/05/2006 06:23:00 PM  
Anonymous Anonymous said...

Anon 3:28pm

I believe you will be right on the money with your rational forecast.

5/05/2006 07:53:00 PM  
Blogger grim said...

Richard,

I haven't done the math, so this is just an off-the-cuff, but I believe that the personal savings rate returning to historical levels (lets say 6%) would have more of an impact on our economy (GDP) than the real estate bubble collapsing.

Keep your eye on the personal savings rate. Yes, it's bad that it's down, but if that starts to swing upward before the economy can compensate, we're in a world of trouble.

While I don't believe the Fed would cut rates to protect housing, they'll certainly do it when they see the savings rate jump up.

grim

5/06/2006 05:56:00 AM  
Anonymous Anonymous said...

I have been following a site now for almost 2 years and I have found it to be both reliable and profitable. They post daily and their stock trades have been beating
the indexes easily.

Take a look at Wallstreetwinnersonline.com

RickJ

5/18/2006 04:51:00 PM  

Post a Comment

<< Home