Thursday, August 03, 2006

Property Tax Pain

From the Record:

Lyndhurst tax bills stun homeowners

The borough's tax office has been deluged by a torrent of phone calls since homeowners received tax bills reflecting the impact of the municipality's first property revaluation in 17 years.

Some homeowners, like Sam Corkin, braced for a higher property tax bill but said they were still surprised at the size of the increase.

"I had figured taxes would increase by 7½ percent, the way your salary goes up," said Corkin, after receiving his third-quarter tax bill. "You don't expect 33 percent."
...
Borough officials said the spikes are a reflection of increased property values over a 10- to 15-year period, with the average home jumping from $160,000 to $400,000 since the last revaluation.
...
As a result, while many homeowners will see property tax increases, others living on smaller parcels will experience a decline in their taxes under the new rate, he said.

Several homeowners upset by the recent increases may have underestimated their tax burden because of relatively slight increases in taxes in previous years, McGuire said.

But Corkin, who saw the assessment on his two-family home increase from $195,000 to $554,000 and annual property taxes jump from $6,000 to $8,040, said he is not convinced that the reassessment is fair.

"I want answers," said Corkin, a recent retiree. "I've left messages at the mayor's office."

40 Comments:

Anonymous Anonymous said...

the other side of the double-edged sword of rapid appreciation... all those folks wallowing in their new-found "wealth" (i.e., market value of homes) now are paying the consequences.

Since residential units appreciated in value at a much greater rate than other uses since the last reval (back in the 80s!), homeowners will carry more of the tax burden.

It all balances out in the end.

8/03/2006 03:08:00 PM  
Blogger grim said...

One of the best craigslist ads I've ever read:

$1399000 - Short Hills, 5 Bedroom 3.5 Bath - Price reduced, Time to buy

People, what are you waiting for? It's time to buy this house. It's been substantially reduced for quick sale. Don't forget the school year is around the corner. Are you trying to move in the day before school starts?! Next thing you know it's gonna be September 1st and little Johnny and Sally won't know where they'll be going to school. They probably won't be able to sleep, will have nightmares about being abandoned, and end up leading very troubled lives. All because you wanted to look for a house until the market hit absolute rock bottom (which it has, by the way). But, if you buy this house now, you'll have plenty of time for them to adjust to their new digs before it's too late. Just a thought...

8/03/2006 03:16:00 PM  
Blogger grim said...

Good ARM piece over at MarketWatch:

Painful ARM twisting

"People's choices are only going to get uglier, and plenty of people are on their way to trouble. ... For everyone who has avoided this trouble, they're going to look back someday -- when their kids are looking for a mortgage and are tempted to stretch too far by using an ARM -- and have stories to tell about how they saw a time when everything that could go wrong with that strategy did go wrong."

8/03/2006 03:28:00 PM  
Anonymous Anonymous said...

It seems that people like the wild appreciation but when the higher tax bills come in they complain.

sorry charlie.

8/03/2006 03:58:00 PM  
Blogger Shailesh Gala said...

But Corkin, who saw the assessment on his two-family home increase from $195,000 to $554,000 and annual property taxes jump from $6,000 to $8,040, said he is not convinced that the reassessment is fair.

How ironic??? No complains about unaffordability!!!

I feel in NJ media & politics, Unaffordability gets completely ignored. I received a letter from Governer's office, after my email to solve unaffordability issue. Letter says, we are looking into it, we are going to build 100K houses in 10 year for low income folks etc...

What about the folks who are in middle income???

8/03/2006 04:03:00 PM  
Anonymous Anonymous said...

he called the mayors office.
good luck, hes under the desk.

as if he could do anything.

this is only the beginning.

its over in nj

8/03/2006 04:35:00 PM  
Anonymous Anonymous said...

hey grim-

that craigs list posting says it has been removed. know why? Anyway to get a look at what u saw?

8/03/2006 04:53:00 PM  
Anonymous Anonymous said...

what is considered middle income these days?

8/03/2006 05:05:00 PM  
Anonymous Anonymous said...

Grim-

Here is the new listing for the craigslist ad. Sounds like someone flagged the listing and CL removed it...the address:
63 CAMBRIDGE DRIVE, Millburn Twp.
OLP 1499000
LP: 1399000

hous-189822241@craigslist.org

8/03/2006 05:37:00 PM  
Anonymous Anonymous said...

{{{what is considered middle income these days?}}}

Realistically, in the NYC/NJ/LI area between $75,000 - $150,000 per person these days. But $75,000 or $80,000 really feels like nothing especially if you pay like $200 or $300 a month just to commute to and from work.

It is very hard to live on what the 'reported' mean or median income is unless you are living rent free with parents.

Read the latest issue of Time Out NY. It will tell you how to get ahead in the job market so you are making $200,000 by time you are 25.

But NJ / NYC & Long Island is a great place to live IF you are very wealthy and into the whole lifestyle of shopping & going to trendy clubs & restaurants every night that are blessed by Zagat & the NY Times.

8/03/2006 05:45:00 PM  
Anonymous Anonymous said...

The 1.39 mil ad on Craig's is back with more humor. It included the following with the new post;

"I posted this earlier and it got flagged for removal by people. I don't understand why. Can you email me and tell me why if you know? Thanks. This is a 100% legit house for sale. I just want you to buy it!" The original posting...

"Anyway, back to what I meant to write: Sadly, my parents are finally selling the house that my brother, sister, and I grew up in. I hate to see it go, but since we've all moved out, I see why it makes sense for them. So, if you want a beautiful home to fill with family memories of your own, check it out. And, don't forget the stellar school system, easy access to NYC, and potential for future craigslist house-posters of your own that come with it! However, if you aren't going to be nice to the house (remember what makes a home vs. a house!) then maybe this isn't for you. And, if you're going to knock it down and rebuild, then we'll have words."

This turned into a 1.39 mil sob story, soap opera. You are asking someone to pay this outrageous price and then you dictate that they should be nice to the house??? Take the 1.39 mil and don't worry what the buyer does!!!!!! If you love it so much why don't you buy it from the estate!!!!!!

You can't make this s*it up!!!!!

BC Bob

8/03/2006 05:58:00 PM  
Anonymous Anonymous said...

Wouldn't we see people cutting back if taxes were as onerous that people here constantly complain about?? What does homeowners insurance & the average monthly heating bill average in Bergen county these days??

Real retail sales have been rising between 6% - 10% annually excluding autos since 1998. Except for maybe 2 weeks after 09/11, retail & mall sales have been booming. This as property taxes, auto insurance, gasoline, & utility costs have skyrocketed.

For most people cutting back on buying everything except the most essential necessities is harder than quitting smoking or even crack & cocaine.

How are people doing it?? It you don't have this ingrained consumer mentality you are looked at and treated as inferior in this part of the country especially on Long Island and in Northern Jersey.

The thing that I will never understand is how someone survives on the reported so called 'median' or 'mean' income which is only about $55,000 for NYC and maybe $70,000 for Bergen county as a whole.

8/03/2006 07:25:00 PM  
Anonymous UnRealtor said...

Below is the full text of the original craigslist posting:


People, what are you waiting for? It's time to buy this house. It's been substantially reduced for quick sale. Don't forget the school year is around the corner. Are you trying to move in the day before school starts?! Next thing you know it's gonna be September 1st and little Johnny and Sally won't know where they'll be going to school. They probably won't be able to sleep, will have nightmares about being abandoned, and end up leading very troubled lives. All because you wanted to look for a house until the market hit absolute rock bottom (which it has, by the way). But, if you buy this house now, you'll have plenty of time for them to adjust to their new digs before it's too late. Just a thought...

Anyway, back to what I meant to write: Sadly, my parents are finally selling the house that my brother, sister, and I grew up in. I hate to see it go, but since we've all moved out, I see why it makes sense for them. So, if you want a beautiful home to fill with family memories of your own, check it out. And, don't forget the stellar school system, easy access to NYC, and potential for future craigslist house-posters of your own that come with it! However, if you aren't going to be nice to the house (remember what makes a home vs. a house!) then maybe this isn't for you. And, if you're going to knock it down and rebuild, then we'll have words.

http://newjersey.craigslist.org/rfs/189636673.html



I don't know why anyone would flag that posting, it was obviously a real house, with links to the MLS listing and everything.

8/03/2006 07:36:00 PM  
Anonymous Anonymous said...

Next thing you know it's gonna be September 1st and little Johnny and Sally won't know where they'll be going to school. They probably won't be able to sleep, will have nightmares about being abandoned, and end up leading very troubled lives

Okay, I'll offer you $500K for your house. I'll need about $398K so that Johnny and Sally can keep up with the other millionaire kids in town, then I can apply the remaining $500k to therapy for Johnny and Sally because they will be so F%$$@# up living with a bunch of spoiled kids.

It all adds up! Deal?

8/03/2006 07:48:00 PM  
Anonymous Anonymous said...

"Realistically, in the NYC/NJ/LI area between $75,000 - $150,000 per person these days. But $75,000 or $80,000 really feels like nothing especially if you pay like $200 or $300 a month just to commute to and from work. "

That is what I thought too, everyone that I know now a day makes around that much in NY or in Jersey, some more than the others, even if you are toward the low end, that is still about 1900 or 2000 dollar per paycheck, so that is about 4000 a month per person after tax, and in a family with 2 incomes, that make it 8000 a month per house hold. let's say that couple buys a starter 400k+ house with a 400k mortgage, with mortgage rate at 6.5%, that is about 2500 a month, and with tax and other stuff, let's say about 3300, that still leave them about 4700 for other stuff, let's assume that it is a family that doesn't live beyon their means, I have a hard time trying to figure out why someone can't surive with 4700 a month after mortgage.

That caculation is based on a family that is near the low end of middle income. I just don't see why ppl keep saying that houses are not affortable now a days. You don't really need to buy a million dollar house as a starter home, you know.

8/03/2006 08:30:00 PM  
Anonymous Anonymous said...

anon 9:30

would you like me to say that you only know rich people or would you like me to tell you that average household income in NJ is not, I repeat, not $150L...I wish it were, but it is not. Cold hard facts. Also, cold hard fact for you #2, most of those people with $150k income already have bought. Sorry to burst ur bubble!!

8/03/2006 08:37:00 PM  
Anonymous Anonymous said...

{{would you like me to say that you only know rich people or would you like me to tell you that average household income in NJ is not, I repeat, not $150L...I wish it were, but it is not. Cold hard facts. Also, cold hard fact for you #2, most of those people with $150k income already have bought. Sorry to burst ur bubble!!}}}

$150,000 is NOT alot when you have kids and you have to factor in child care into the equation. What do these families with one or two kids pay for day care and/or private school if both parents work???

I see many parents with one or two kids in stores & restaurants on Long Island and I always wonder How do they do it especially with property taxes & prices the way they are.

Then the only activity they are exposed to outside of school is 'The Mall', more shopping with mom & dad, and unlimited video games & TV.

Parents are too busy watching reality TV, MTV, & desperate housewives to even care at all just thinking about what they are going to buy at the mall, or the designer clothes at full price that they need every day.

8/03/2006 08:48:00 PM  
Anonymous Anonymous said...

my caculation was based on 75k per person.

Let's say high 50k to mid 60k then, that is still 1500 to 1700 per pay check, that makes about 3000 to 3400 a month, and a house hold would about 6000 to 7000 a month.

and for those, there are plenty of house around 300k that are quiet decent.

Most ppl probably starting buying when they are in their 30s, and they probably start working in their 20s, again, if they didn't live beyond their means and blew away their saving, they should having enough saved up for a down payment.

All my college friends, none started with 100k+ after they graduated, most started in the 50s to 60s and moved up from there.

8/03/2006 08:49:00 PM  
Anonymous Anonymous said...

{{{That is what I thought too, everyone that I know now a day makes around that much in NY or in Jersey, some more than the others, even if you are toward the low end, that is still about 1900 or 2000 dollar per paycheck,}}}


Which isn't much if you are a single person. Forget about having any retirement plan or anything other the cheapest health plan offered by your employer if you only take home less than $2,000 per paycheck.

Like I have said, the NYC is a haven & playground for the wealthy who are only concerned with greed & materialism that they show up & put down others.

8/03/2006 08:51:00 PM  
Blogger Richie said...

How many people do you know that fit this category?

Young homeowners often repair-challenged

Home-centered television networks, including HGTV, are also in vogue. HGTV executives say shows such as "Design on a Dime" and "What's Your Sign? Design" — a show that builds on the unlikely combination of astrology and home decorating — have helped boost its recent ratings among young adults.

I feel bad if these people are taking advice from HGTV. Some of the worst remodeling I've ever seen. Everytime I see them paint over existing painted furniture/cabinets I cringe...

-Richie

8/03/2006 08:53:00 PM  
Anonymous Anonymous said...

{{Let's say high 50k to mid 60k then, that is still 1500 to 1700 per pay check, that makes about 3000 to 3400 a month, and a house hold would about 6000 to 7000 a month.}}

Which is hardly enough to survive on in this part of the country.

Remember, even to rent an apartment you must make between 45-50 times monthly rent to qualify and there isn't much these days for less than $1,500 a month except for maybe the worst parts of Jersey City or maybe in parts of Newark.

If you are single and making the above, forget about buying now or in the future. If you can't make $20,000 or $30,000 more, then best to move to another part of the country.

8/03/2006 08:54:00 PM  
Blogger chicagofinance said...

A casualty......no biggie though

MotherRock Energy Hedge Fund Closing After Losses (Update1)

Aug. 3 (Bloomberg) -- MotherRock LP, the hedge fund firm run by former Nymex President Robert ``Bo'' Collins, is preparing to shut down because of ``terrible performance'' as natural gas plunged this year.

``We are in the process of developing a detailed plan for winding down the fund,'' Collins said in a letter sent today to investors in his MotherRock Energy Master Fund. MotherRock, begun in December 2004, invests in gas futures, seeking to exploit price differences based on the delivery month for the contracts.

Benchmark New York gas prices dropped 66 percent from an all-time high in December as a mild winter created a supply glut and then rallied in the second half of July. While prices for summer fell, contracts for next winter stayed high, widening the price differential or spread.

``The volatility in these markets is very large,'' said Craig Pirrong, director of energy markets at the University of Houston's Global Energy Management Institute. ``That means the prospects for large profits are there, but the prospects for large losses are there too.''

MotherRock had ``significant losses'' in July, though a final tally is not yet available, Collins said in the letter, obtained by Bloomberg News. The timing of the shutdown has not been established, according to the letter.

In the first half of this year, MotherRock lost more than 23 percent, with most of the damage coming in June. The fund returned 20 percent to investors net of fees last year.

MotherRock had more than $400 million in customer funds earlier this year. A phone call to Collins was not returned.

`Terrible Performance'

MotherRock raised money from investors such as Silver Creek LLC, a Seattle-based hedge fund investor, whose emerging manager fund had a 1 percent stake in Collins's fund. Silver Creek redeemed its investment earlier this year and the fund is up 9.4 percent this year. Jonathan Gasthalter, a spokesman for Silver Creek, declined to comment.

``Let me say upfront that I regret MotherRock's terrible performance and its impact on your investments,'' Collins said in the letter. ``Our primary concern at this point is to protect investors' remaining capital.''

Collins, 40, was president of Nymex from 2001 to 2004. Prior to joining Nymex, he was senior vice president for natural gas trading at El Paso Corp.

Pirrong said large swings in profit and loss were common for new hedge funds and that funds run by Citadel and Ritchie Capital Management sustained large losses in energy after Hurricane Katrina last year sent prices soaring.

``There is a pretty high rate of mortality among hedge funds,'' Pirrong said. ``When things are good they are very good, but when they're bad they're awful.''

8/03/2006 08:57:00 PM  
Anonymous Pat said...

O.K., since anon 9:54, et.al. kicked off the Friday $300 jeans premarket, here's one:

http://tinyurl.com/p3n46

"In cases where no jeans can be found to match an individual woman, Zafu will tell the consumer outright and suggest she check in periodically as styles are updated."

8/03/2006 09:02:00 PM  
Blogger Richie said...

Here's looking back a year at an article from August 2005...wonder if this guy has the same outlook:

An Insider Bets on More Boom

He moved from Cali to Jersey.. wonder where he is now..

-Richie

8/03/2006 09:03:00 PM  
Anonymous Pat said...

I suspect we put through enough klick-throughs on that Craigslist house to set off a flag under their new equal housing policy.

Didn't read the details, but they've put some new precautions in place. Maybe???

8/03/2006 09:06:00 PM  
Anonymous Anonymous said...

"Which is hardly enough to survive on in this part of the country.

Remember, even to rent an apartment you must make between 45-50 times monthly rent to qualify and there isn't much these days for less than $1,500 a month except for maybe the worst parts of Jersey City or maybe in parts of Newark. "

If a family that makes around 7000 a month can't surive with 4500 a month after a 2500 mortgage, they really need to examine their spending habbits.

8/03/2006 09:06:00 PM  
Anonymous Anonymous said...

{{{O.K., since anon 9:54, et.al. kicked off the Friday $300 jeans premarket}}}

Okay, I get it.

I'm getting pretty pathetic, huh?

But EVERYONE is making SO much more money than me. I KNOW IT'S TRUE! I follow them around the mall all the time.

I guess since I'm not concerned with greed and materialism (I just spend an exorbitant amount of time being concerned about others) I should move to like Wisconsin or Idaho or something.

But isn’t there a chance my complaining can change my future... I mean the way others spend?

8/03/2006 09:27:00 PM  
Blogger RentinginNJ said...

The thing that I will never understand is how someone survives on the reported so called 'median' or 'mean' income which is only about $55,000 for NYC and maybe $70,000 for Bergen county as a whole.

If you bought a house a pre-mania prices and didn’t HELOC yourself into a hole, it is possible (at least in Bergen County). Okay, no $300 jeans or BMWs, but you could make ends meet.

Let’s say you bought a home in 1997 for $250k and put down 20%. You financed $200k and refinanced into a lower (say 6%) rate sometime over the last few years and your property taxes are $7,500. Your annual mortgage & tax payments would come in under $22,000 (not including tax deductions, maintenance or insurance. This is less than 1/3 or your income.

The house above would be priced at $500k or more today (the lower end experienced the greatest appreciation). The “median household” starting out today in Bergen County could simply not buy a house and make ends meet.

8/03/2006 09:37:00 PM  
Anonymous Anonymous said...

10:27, no way are you the Queens guy. I'm gonna smack you for impersonating him...badly.

Is it you?

If it is, then why, oh why, aren't you getting out of there and getting a fresh start somewhere? Stop loving your past mistakes. And go someplace where you can stop worrying about what other people are making, and start liking what you are accomplishing.

Pat

8/03/2006 09:50:00 PM  
Anonymous UnRealtor said...

"let's say that couple buys a starter 400k+ house... I just don't see why ppl keep saying that houses are not affortable now a days."


Hilaroius. Where are there $400K houses in a decent neighborhood, with decent schools, and a NY City commute under an hour?

Post some listings.

http://www.realtor.com

8/03/2006 09:51:00 PM  
Anonymous Anonymous said...

HARRIMAN

Fantastic 3 level townhse W/ EZ commute. Newly renovated EIK w/pergo flrs, fplc, deck and foyer. 3bd/2.5bth, Mstr w/SPA tub. No HOA charges. Visit WWW.SOLDMATES.COM
ML#400275. $310,000

Shortline Bus to Grand Central is about an hour.

www.recordhomefinder.com

Pat


Harriman $349,900

3/4 BR, 2 BA Bilevel, tree lined level lot, the perfect neighborhood. MLS 399015

8/03/2006 10:05:00 PM  
Anonymous Anonymous said...

re: Taxes

Can someone explain how much of a tax deduction comes from mortgage interest and property taxes?

Given the following assumptions:

$100,000 household income
$25K annual mortgage interest
$10,000 annual property taxes
25% tax bracket

How much should the tax refund be for interest + property taxes?

8/03/2006 10:14:00 PM  
Anonymous UnRealtor said...

Harriman is under an hour into NY City? Looks pretty far on a map.

http://google.com/maps?f=q&q=Harriman,+NY

Good schools?

Not a bad house, but not very inspiring architecturally.

http://realtor.com/Prop/1064130568

How much will it be worth next year?

And condos don't count. :-)

8/03/2006 10:46:00 PM  
Anonymous UnRealtor said...

I think the mortgage interest deduction would be:

$25,000 x 25% = $6,250

And the property tax deduction would be:

$10,000 x 25% = $2,500

8/03/2006 10:50:00 PM  
Anonymous Anonymous said...

Oh, condos don't count? Fair.

Yeah, that one is pretty bland - but it's cheap, good-sized for a starter, has a nice yard and a walk to the bus. Not a good walk in two feet of snow, but can do.

There are a lot of older, Victorians and such in the Village, but I can think of only a couple for sale right now. I saw one last Sunday right by the park some guy remodeled to flip, but I can't find it on the MLS.

I'm pretty sure, don't quote me on this, if you walk over and catch the 7:15 bus, you're at Port Authority by 8:25. The train's right there, too.

Just an idea.

Pat

8/03/2006 10:59:00 PM  
Anonymous Anonymous said...

You guys crack me up. In one breath you complain there are no affordable starter homes and when one shows up you dismiss it as uninspiring. Starter homes shouldn't be. Part of the reason houses cost more is that new housing has gotten bigger and bigger--not just mcmansions, but across the board. Gotta have 3 bed 2.5 ba, volume ceilings, etc. Modesty is so out of fashion.

Story: I have a 2 bed/1 ba cape, plenty big when it's just me, and son half time. When he was little, there was a run on the bathroom, and one of his buddies turned to me and asked where the other bathroom was. I told him there wasn't one--the look on his face was pricelss. He had never been in a house with just one bathroom.

Of course the downside of this story is that I pay 6400 a year in taxes, mostly on the value of the land--the house (@under 100 sf) was valued at 75K--it was allin the lot. No one would build a house that size these days when the lot is so exoensive.

8/04/2006 02:52:00 AM  
Blogger chicagofinance said...

UnRealtor said...
I think the mortgage interest deduction would be:

$25,000 x 25% = $6,250

And the property tax deduction would be:

$10,000 x 25% = $2,500

8/03/2006 11:50:09 PM

make sure to comapre to standard deduction - you don't get the whole thing

8/04/2006 09:27:00 AM  
Anonymous UnRealtor said...

"You guys crack me up. In one breath you complain there are no affordable starter homes and when one shows up you dismiss it as uninspiring."


That's because a $400K rapidly-depreciating "starter home" that in normal times one would outgrow in 2-3 years and move on, today has become a place you must live in for 10 to 15 years.

In other words, the whole concept of a "starter home" (at these prices) is a joke. Any home bought today at these crazy prices ($400K isn't "cheap," look at what sold for that much in 2000) will be lived in for 10 years, for it to make any financial sense.

So yes, I want a home that I'll be living in for a decade, to be "inspiring."

8/04/2006 10:02:00 AM  
Anonymous Anonymous said...

unrealtor-

Well put!! IF you are going to buy a million dollar place, you better feel like a millionaire not some sweating, 12-hour/day bloke with no life!!

8/04/2006 04:22:00 PM  
Anonymous Anonymous said...

Unrealtor--
Let's set aside the issue of potential (OK Probable) depreciation for a moment. Let's talk about why houses have morphed from homes into some bizarre form of status based on the number of sf you own. Let's talk about "needing" 2.5 bathrooms for a single person household, NOW. Let's talk about "needing" a whirlpool tub and all new stainless steel appliances, NOW. Let's talk about why median house size is growing and average household size falling. Let's talk about why first-time buyers sniff at solidly built houses that are affordable to buy and maintain but are 20 or 30 or 40 years old-- because they are "uninspiring." We grew up in these houses, where 4 or more people shared a bathroom, where siblings shared bedrooms, where the lucky families had a den or family room or an unfinished basement to use as a "Rec" room. Our folks added on, built up, made do and re-did. Over time, as they could afford to. Some of our parents still live in houses that don't meet the minimum criteria for new buyers. I happen to think there are still plenty of values out there for people who are willing to buy an affordable but "uninspiring" house and make it theirs over time. I am not talking about million dollar properties here. My lovely little town, in a very good school district, has eight such houses on the market now for well under 400K. We may complain about how unaffordable housing is, but expectations seem to have risen as fast or faster than price appreciation, and have contributed to the affordability problem.

--Contented Queen of my 900 sf

8/04/2006 05:25:00 PM  

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