290 Homes Planned For Garden State Paper Site

From the Herald News:

With no buyer for plant, housing is planned

When Richard Chmielewski talks about losing the job he performed for 25 years at Garden State Paper during the 2001 Enron collapse, it's what he doesn't say that carries the most weight.
...
And then five years went by.

Now, the majority of the nonpartisan City Council is pushing to build 290 housing units on the site. Mayor Frank Calandriello said the redevelopment plan was chosen as a last resort when city officials realized no one was willing to purchase and reopen the factory.

"Honestly, we really don't have many options," Calandriello said. "We need action. We need progress. And this is a step in the right direction."
...
When Garden State Paper's owner, Enron, declared bankruptcy in 2001, the factory, which produced newsprint for newspapers across the country, was forced to close after more than 40 years.
...
"It's not something Garfield is doing wrong," Calandriello said. "Industry has been leaving the state of New Jersey for the past 20 years. It's just too expensive to stay here."
...
Instead of employing 250 area residents at the site, which has remained untouched since closing in 2001, the property will most likely bring in more than $2 million in annual tax ratables once the 290-unit housing project is built. Officials said they hoped construction would begin in two years. When GSP was operating, it brought in $300,000 annually in taxes, the largest city ratable at that time, officials said.

The Redevelopment Agency approved the preliminary plan for the housing project submitted by H.P. Garfield LLC on a 5-1 vote at a special meeting on June 19. On Aug. 8, Calandriello, Councilmen Joe Delaney, James Krone and Stanley Moskal voted for the zoning changes needed to build the housing complex.

Lowball! Bergen and Essex Counties

Welcome to another edition of Lowball!

Lowball! takes a look at home sales from a different perspective. For those new to Lowball!, a lowball offer is when a buyer offers a significantly lower bid than asking in hopes that the seller accepts the offer. We take a list of home sales from the past month and pick out the sales that have the highest percentage difference between list price and selling price.

The purpose of Lowball! is to show buyers that the market has changed and buyers now have considerably more leverage than sellers. Just a short time ago, Lowball! offers would have been laughed at and discarded, however, not any more. The fact that so many under-asking offers are being accepted is clear proof that the market is changing.The list does not contain all sales, I hand-pick the most interesting sales from the list. These listings might be the highest dollar drops, biggest percentage reductions, or sales in towns that are thought to still be 'hot'. Please note, even with double digit percentage reductions, these homes are still incredibly overpriced.

Here are Bergen and Essex for the first half of the month, I'll publish the rest of the counties as time permits.

Bergen County


(click to enlarge)

Essex County


(click to enlarge)

Caveat Emptor!
Grim

Seeping or Bursting?

From the Asbury Park Press:

Hissing sound grows louder

It would be premature to declare the real estate bubble is about to burst. But the latest home sales reports show the air is starting to seep out of it.
...
Rising housing prices are always good news-bad news propositions. They are found money for homeowners gaining increased equity. In recent years, that's been particularly welcome, as stocks have underperformed and pay raises in many job sectors have failed to keep pace with inflation. For many people, real estate has been their only avenue for asset appreciation. But the down side of rising prices, clearly evident in New Jersey, is the negative impact they have on first-time homebuyers.
...
In the first six months of the year, there was a nine-month supply of houses on the market in both Monmouth and Ocean counties, compared to about 4 1/2 months in the first six months of 2005. That spells a continued decline in housing prices. For most people — the two-thirds who own their own homes — that's bad news. For those waiting for prices to fall to an affordable level, it provides a ray of hope.

New Jersey Unemployment Rising

From the Philadelphia Inquirer:

N.J. joblessness is among the fastest-rising

New Jersey's unemployment rate is rising faster than almost any other state as employment in the state's private sector declines.

Telecommunications and drug companies once produced high-paying, high-technology jobs for New Jersey, but those companies have been struggling, and that has had a ripple effect on the job market, experts say.

"We were riding the wave, and when the wave broke on the shore, we got people caught in the fallout," said Steven Director, a Rutgers University professor of management, who follows employment trends for the Society for Human Resource Management.

In July, the unemployment rate rose to 5.1 percent, up from 4.4 percent in July 2005, according to a report yesterday from the U.S. Labor Department. Only Mississippi, which was ravaged by hurricanes last year, saw a more rapid rise in the unemployment rate. New Jersey had the second-biggest increase, followed by Rhode Island, Arkansas and Nevada.
...
Virtually all of this year's private-sector job gains have been in the service industries, which typically pay less.

"We used to have the advantage of the pharmaceutical and high-tech companies. They were all booming and expanding. That gave us a strong source of high-paying jobs," Director said. "All of those companies have taken some hard hits."

Weekend Open Discussion

Observations about your local areas, comments on news stories or the New Jersey housing bubble, Open House reports, etc. If you have any questions you wanted to ask earlier in the week but never posted them up, let's have them. Also a good place to post suggestions, requests for information, criticism, and praise.

For readers that have never commented, there is a small link on the bottom of each new message that reads "# Comments". Go ahead and give that a click, you might be missing out on a world of information you didn't know about. While you are there, introduce yourselves to everyone.

For new readers that have only read the messages displayed on the main page, take a look through the archives, a substantial amount of information has been put online in the past 6 months. The archives can be found at the bottom of the right hand menu and are categorized by month.

Shifting Taxes to Businesses

From the APP:

Shifting tax burden to businesses would harm state

When I first heard there was going to be a special legislative session to lower property taxes for residents, I was excited. A summer session focused on property taxes could begin to solve another major crisis facing New Jersey — making the state economically competitive once again.

That's because New Jersey's skyrocketing taxes, which include property taxes, are a big reason companies and employees have been leaving or staying away from the Garden State. A recent study by the Washington-based Tax Foundation revealed that New Jersey has the second-worst business tax climate in the nation. CEOs from around the nation also rated New Jersey as the fifth-worst place to do business.

As details emerged about the property tax session, I assumed our legislators were interested in enacting true reform by focusing on ways to correct all the systemic problems that have been dragging New Jersey down. Issues such as correcting the state's generous, outdated pension system; consolidating and encouraging shared services within the 1,300 layers of government with taxing authority; and slashing out-of-control state spending were all on the table — a monumental feat.

My excitement, however, turned to horror when I read that one of the options being considered is to simply shift the tax burden from residents to our already overtaxed and hurting companies. That is not true reform — it is merely lowering one group's taxes and raising another's.

If this disastrous scenario becomes reality, it could be the final nail in the state's economic coffin. According to Rutgers University economists, New Jersey is already losing tens of thousands of high-paying jobs due to the state's high operating costs and they are not being replaced by similar attractive positions. The new jobs being created are lower paying service-sector ones — jobs that do not require college degrees or will tempt our children and the best and brightest to stay here and settle down. They will leave for places where there is greater economic opportunity and where growing companies have made long-term investments.

Save Xanadu?

From the NY Times:

Some Call for New Jersey to Intervene to Save Xanadu Project

As the half-built, multibillion-dollar Xanadu shopping and entertainment complex in the Meadowlands unravels along with its parent company’s finances, some top officials conceded the failure on Thursday and called for New Jersey to intervene, or even get rid of the developer.

It appears unlikely that the developer, the Mills Corporation, can finish the $2 billion project at the Meadowlands Sports Complex, and real estate experts and stock analysts say it is hardly more likely that the state can find another developer to finish it as planned. Even if it did, New Jersey could stand to lose hundreds of millions of dollars on a project that many criticized as ill conceived from the start.

“I’m deeply troubled,” Gov. Jon S. Corzine said, referring to huge cost overruns and the expected dissolution of Mills, the company building Meadowlands Xanadu, a Disneyesque mall under construction on a huge swath of state land at the sports complex.

Mr. Corzine said at a news conference that his administration was deeply involved in trying to salvage Xanadu, although Gary Rose, the governor’s executive director for economic development, declined to discuss the issue. But Senate President Richard J. Codey urged the state to “pull the plug” on Mills and find a new plan and a new developer.

“It’s obvious that Mills can’t get this done, and anybody who says so has been dancing with Dorothy down the yellow brick road for too long,” said Senator Codey, who has long been a detractor of the Xanadu complex.
...
Rich Moore, an analyst at RBC Capital Markets, said that even if the state negotiates a new agreement for a scaled-down project, “there will be pain all around.”

“The state will probably be in a position where they’ll have to help out, either the old guys a little bit or the new guys a little bit,” Mr. Moore said. “If the new guys say to the state, ‘I guess we can’t do anything unless you give us $100 million for some infrastructure,’ what are they going to say?”

New Jersey Condos - A Look At The Last Crash

Decided to spend some time going through the tax records to see if I could determine how condos were affected during the last real estate crash. I'm sure many of you have spent time working with these systems to get an idea of prior sales or to snoop on neighbors.

These sales records represent a history of the real estate market over time. However, trying to clearly illustrate how the market reacted over time using these sales is not easy. Homes are not identical and sales are infrequent. In order to track the market you would need to find a number of comparable homes that have sold multiple times over the period.

Condos and Townhomes are better candidates for this type of analysis. Units are relatively similar, and large scale developments offer numerous sales data points over time.

I pulled the tax records for a handful of large-scale developments that were built during the last real estate boom to see what I could find. The first development that I took a look at is located in Clifton. Selected this one because I remember it being built in the mid to late 80's. I've grouped these together by street and assessment value.



The next development is also in Clifton. At this point I was trying my hardest to try to think of any large-scale development I remember being built at that time. I was hoping that this building would have offered as many datapoints as the complex above, but unfortunately it did not. Interesting nonetheless.



At this point I had racked my brain trying to remember the names and streets of condo developments. I spent some time flying around with google maps trying to pick out large-scale condo developments that fit the timeframe. Just when I was about to give up, this one popped into mind. This is very large scale development in West Windsor called Canal Point. This was built during the peak of the last bubble. I believe this complex saw auctions in the early 90's.





There are a few points to take away from this:

1) Prices can fall dramatically. We're not talking about a stagnant market where real values are eroded over time by inflation, but large nominal price declines. None of these numbers are inflation adjusted. Can you imagine buying a condo for $130,000 and it being worth $93,000 ten years later? Real estate goes down too.

2) Don't be lulled into a false sense of security because you are planning on staying for 10 years. In many of these cases, the market declined steadily for ten years before hitting bottom. It took another bubble for them to break even.

3) There have been a number of comments lately stating that owners will simply take their properties off the market during a downturn, they just won't sell. That simply isn't the case. Many of these owners sold at substantial losses.

Caveat Emptor!
Grim

No Bailout For The Wealthy

From the APP:

Bailout for wealthy decried if they choose to gamble

Kristina Fiore said she's got little sympathy for wealthy people who build multimillion-dollar homes on vulnerable waterfront property, then want help when Mother Nature makes a mess there.

"I'm honestly tired of hearing people complaining (about storm damage) who have put so much money into a home," Fiore said. "What they spend is their business, but they should know they're building in a vulnerable area. Then (after damage), local taxpayers get stuck cleaning it up. I don't think it's fair. When FEMA pays, that still comes out of our pockets."

After reading a letter to the editor in the Press supporting a proposal for a state catastrophe fund, financed by insurance premium dollars, Fiore argued that the last thing the state needs is another government program taking money from the middle class (via insurance premiums) to benefit the wealthy.

"It's increasing the size of government and, again, passing the cost to the taxpayers," said Fiore, who works in human resources at an area technical-services company. Her letter on the subject, published July 23 and reprinted at right, was judged by the Press editorial staff as the best letter of the month.
...
"If you're going to build on the beach, it may get flooded, that's common sense," she said. The taxes, and the use of eminent domain to take waterfront homes from middle-income families to build luxury condominiums for the wealthy, all point to how New Jersey allows "the elite pushing the middle class out. From the government down to the people moving in, that's the bottom line."

Crafty Montclair Developers

From the Star Ledger:

Montclair developers win round on rezoning

Desmond and Susan Neill, the developers who tore down a century-old estate on Montclair's North Mountain Avenue, were there.

So too was Paul Cocoziello, the developer hoping to tear down a century-old, 9-bedroom Dutch Colonial on Upper Mountain Avenue to make way for five luxury town houses.

The developers, as well as investors saying the value of real estate holdings intended for retirement was at risk, argued against a "down zoning" of some 200 properties to prevent tear downs of Montclair's historic homes. And, for the mo ment, they won.

"The developers are crafty," said Geoff Shandler, a rezoning supporter who looked on Tuesday night as Montclair's council voted, 3-2, to table the measure amid an overflow and vocal crowd at town hall.
...
But Joyce Michaelson, an at- large councilor who voted against tabling the rezoning along with 3rd Ward Councilor Jerold Freier, said the opposite is true, as developers are tearing down large homes with affordable rental units and replac ing them with "ultra luxurious" ones open only to the well-to-do.

"We're looking at blocks that can be totally transformed," she said.
...
Yesterday, Shandler said the developers got the upper hand, forcing a re-examination of the or dinance in the coming weeks.

"In this case, they were able to tie together several issues, whether it's taxes, diversity and affordable housing, and create an argument that really doesn't have any bearing to the reality of the benefits of what this down zoning will offer," Shandler said.

Jersey Housing Sales Dive

From the Star Ledger:

Housing sales dive 16.3% in Jersey

June is a pivotal month in the housing market -- the grand finale of the busy spring house-hunting season.

More than any other time of the year, it's when homebuyers call their agents, book home tours and turn up at open houses, setting the high-water mark for homes sales in any given year.

But, apparently, not this year.

The National Association of Realtors said yesterday home sales in New Jersey tumbled 16.3 percent during the second quarter as more homebuyers, discouraged by higher home prices and interest rates, dropped out of the market. During the quarter, 157,900 homes were sold, down from 188,600 a year earlier.

Prices, which are released for metropolitan areas rather than on a state-by-state basis, have held up, although the increases have moderated substantially and in Central Jersey they actually fell, the NAR reported.

"There is still little evidence of collapsing housing markets, although we are early in the downturn of the housing cycle and the weakening is going to play out over the next year or two," added Celia Chen, director of housing economics at Moody's Economy.com, a research company in West Chester, Pa.
...
"The weakening of the residential real estate market is occurring primarily in the coastal markets of the country, including New Jersey, because the increase in prices in the coastal markets have been greatest over the last seven years and thus the affordability squeeze is exaggerated here," said Jeffrey Otteau of East Brunswick-based Otteau Appraisal Group, who also authors a series of widely followed quarterly market reports on the New Jersey real estate market.
...
Otteau said that June is the "traditional end point of the all-important spring selling season," and typically sets the tone for home sales in any given year.

"Thus the residential market in New Jersey had much at stake as any hopes for a market comeback would fall heavily on June sales performance," he said.

In New Jersey, the number of homes that were contracted for sale in June ran 9 percent below May and 24 percent below June 2005, Otteau said, "continuing the pattern set earlier this year and dimming hope for a market comeback anytime soon."

Year-Over-Year Declines Hit New Jersey

A few weeks ago, I had mentioned that I thought we would begin to see year-over-year price declines by the third quarter of 2006. This was due to the fact that peak prices (and demand) were seen during the third quarter of 2005. However, according to a report released yesterday by the NAR, parts of New Jersey are already experiencing year-over-year declines. That is right, for the first time in more than 10 years the median price fell.

From the Asbury Park Press:

New data add to changing homes picture

The median sales price of an existing home in the region that includes Monmouth and Ocean counties was $393,600, down 0.1 percent from the same period a year ago.

Real estate sales in New Jersey declined 16.3 percent in the second quarter.

There was a nine-month supply of homes for sale in both Monmouth and Ocean counties in the first six months of 2006. A year ago, there was a 4.5-month supply in Monmouth and a 4.3-month supply in Ocean.

For the first time in a decade, home prices in the region that includes the Shore have declined, although the drop in second-quarter prices was slight, the National Association of Realtors reported Tuesday.

The median sales price for an existing home in the region that encompasses Monmouth, Ocean, Somerset and Middlesex counties was $393,600 in the second quarter, down 0.1 percent from $394,100 in the second quarter of 2005, according to the association. The median means that half the homes in the area sold for more and half for less.

It's the first time that the association has seen a percentage decrease since prices in the region fell from $148,600 to $148,500 from 1993 to 1994. They have climbed ever since.

"There is a major housing slowdown," said James W. Hughes, dean of Rutgers University's Edward J. Bloustein School of Planning and Public Policy. "It is surprising that prices have behaved as well as they have."

Other areas of New Jersey still showed single-digit percentage increases in the second quarter. For instance, the median home price in an area that includes Bergen and Passaic counties was $473,700, up 4.6 percent from $452,700. The median price in the area of Union, Hunterdon, Morris, and Essex counties was $443,800, up 7.1 percent from $414,400.
...
The regional figure from the association may look worse because in Somerset County, the median price fell 4 percent to $414,223, according to Otteau. In Middlesex County, the median price rose 8 percent to $412,760. The association's reports do not break out figures for individual counties in New Jersey. They also do not include new home sales.

Otteau said it may just be a matter of time until the Shore prices show more of a decline.

"We are beginning to see price declines in the market, which began in the second quarter of this year," said Jeffrey G. Otteau, the firm's president. "They won't show up in the calculations until the third quarter of '06."
...
Albert S. Veltri, president and chief executive officer of Veltri & Associates of Dover Township, said he expects home prices to rise about 3 to 5 percent this year.

"We are seeing a lot of what we call low-ball offers," Veltri said. Whether the offer is accepted depends on the personal needs of the seller, Veltri said. "I think people are starting out low, and the sellers who are not flexible are turning down those offers, obviously."

Homebuilder Sentiment at 15 Year Low

From Bloomberg:

U.S. Homebuilder Sentiment Index Falls to 15-Year Low

Confidence among U.S. homebuilders plunged to the lowest level in 15 years this month as buyers cancelled orders and inventories of unsold dwellings piled up, a private survey showed.

The National Association of Home Builders/Wells Fargo index of builder confidence fell to 32 from 39 in July, the Washington-based association said today. It was the seventh consecutive monthly decline.

Homebuilders including Toll Brothers Inc. and Hovnanian Enterprises Inc. are slashing profit forecasts as high borrowing costs and home prices discourage many potential buyers. The Federal Reserve last week suspended a two-year cycle of interest-rate increases, saying a cooling housing market had contributed to slower economic growth.

``This is an indication the Fed has every reason to tread cautiously on interest rates,'' said Eric Green, chief market economist at the securities arm of Countrywide Financial Corp. in Calabasas, California. ``The risk is if they press too hard, what remains a decisive and orderly decline in housing could become disruptive.''
...
The confidence survey asks builders to characterize current sales as ``good,'' ``fair'' or ``poor.'' Readings below 50 mean more builders view conditions as poor.

Economists polled by Bloomberg News forecast an August reading of 38, the median of 21 projections. The latest figure is the lowest since February 1991. The index averaged 67 last year.

Demographic Shift Across NJ

From the New York Times:

Immigrants Swell Numbers Near New York

Immigrants have continued to surge into metropolitan New York since 2000, according to census figures released today, and that increase, combined with high birth rates, has elevated the foreign-born and their children in New York City itself to fully 60 percent of the population. The rate of change was even more pronounced in the 24 suburban counties around the city, where a record 20 percent of the residents are now born abroad.

The figures, while showing that the city’s gains from immigration were not nearly as marked as they were in the 1990’s, are nonetheless striking in their detail and magnitude.
...
In New Jersey, the number of immigrants grew to 19.5 percent, the third-highest proportion of any state after California and New York. The number of metropolitan area suburbanites claiming West Indian ancestry soared 16 percent.

Officials warned against making precise comparisons with the 2000 census, since this survey uses a different method of sampling and is intended to measure characteristics rather than to provide an actual population count. Also, the 2005 sample did not include people living in group quarters, such as prisons, nursing homes or mental institutions. In 2000, the census counted over 180,000 residents of those facilities in the city.

From the Morris Daily Record:

Morris gets older, wiser as younger families flee

At the midpoint between two censuses, Morris County is older, better educated and more diverse than at the turn of the century and, while the stereotypical nuclear family continues to decline, families here have grown larger.

These are some of the conclusions that can be drawn from the 2005 American Community Survey released today by the U.S. Census Bureau.
...
At the midpoint between two censuses, Morris County is older, better educated and more diverse than at the turn of the century and, while the stereotypical nuclear family continues to decline, families here have grown larger.

These are some of the conclusions that can be drawn from the 2005 American Community Survey released today by the U.S. Census Bureau.

From the Herald News:

White population is dropping

A little older. A little smarter. More ethnically diverse than ever.

New population figures released today by the U.S. Census Bureau show that well-documented trends on age, education, race and ethnicity continue to change the face of North Jersey.

Hispanics and Asian-Americans are pouring into the region by the tens of thousands, bringing widespread cultural change.

Meanwhile, the white population continues to drop, especially in Bergen County. The black population is also showing declines in some areas.

At the same time, the overall population is aging and becoming better educated, with significant increases in the ranks of the college educated.

"Basically, the dynamics of change that we saw in the 1980-to-2000 period are continuing quite strongly into the new millennium," said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.

Please keep comments on-topic and relevant.

What do you mean it didn't appraise?

From RealtyTimes:

Housing Counsel: Appraisals 101

You plan to purchase a condominium unit, and enter into a contract with your seller to pay $500,000. You give the agent $10,000 as the "good faith deposit," to be held in escrow until settlement takes place.
...
You plan to obtain a 90 percent loan ($450,000) and put down the difference of $50,000 (plus closing costs) in cash. Your lender has advised you that you will qualify for such a mortgage loan, but that the availability of the loan is contingent upon a satisfactory appraisal.

You ask your real estate agent whether you should include a contingency for financing in the sales contract. The agent tells you that other units in the area -- and indeed in the same complex -- have sold for $500,000 or above, and that there should be no problem with the appraisal.

In reliance on these statements, and because you really want the unit, you do not include a financing contingency.

Your lender obtains an appraisal, and it comes in at only $460,000. What rights do you have?

Since you opted not to include the contingency for obtaining a mortgage, you may be stuck. Your lender will still lend you 90 percent -- but it will be based on the appraised value, not the contract price.

This means that although you may have to pay the full $500,000 for the unit, you will only get a loan of $414,000 and instead of paying $50,000 in cash for the difference, now you have to cough up $86,000 -- whether you have this kind of money or not.

"Ethical" Listing Advice?

From Gary Watts, economist for the Ocean County Association of Realtors (California):

Mid-Year Economic Outlook for Real Estate

B. Listing Agent Advice

1. Price Reductions: Please do not put a “price reduced” banner on your listings, and if you have one up, please take it down. It “falsely” advertises to the neighborhood that prices in the area are going down. What is more true is that sellers are lowering their expectations and becoming realistic.

Plus: For we who show property, it does not instill confidence in our potential buyers.

2. Sold Signs: When the listing goes into escrow, please put an “in escrow” or “sold” banner on the sign! The days of a panicked buyer, desperately looking on their own for a home, are long gone. Once again, we are advertising to the neighborhood the wrong information.

Plus: Imagine how potential buyers feel seeing all those for sale signs. Do you really think you’re helping them enter the market?

3. Signs: If you have a listing where there are other (or many) for sale signs nearby, I would recommend that you call the other agents and see how many of them will remove their signs from their listings. At the very worst, rotate your signs until one (or more) of the listings sell, then make sure it has a sold sign on it!

Hat tips go out to:

Gary Watts and the Incredible Logic Shrinking Machine

and

"Price Reduced" Signs Give Buyers the "Wrong" Message

Caveat Emptor!
Grim

Price Reduced!

Welcome to another edition of Price Reduced!

For all the newcomers to this blog, Price Reduced! takes a look at a handful of significant price reductions across Northern NJ. The purpose of this exercise is to serve as proof that the Northern New Jersey real estate market has long since been overvalued and has started the long hard decline back to the mean. These listings are in no way an endorsement by me, nor do I believe they are a bargain or a value. Even reduced, I still believe these homes are still grossly overpriced.

On to the list!

MLS# 2219533 - Bridgewater, NJ
Previous Price $669,900
Current Price $483,537 (Price Reduced 27.8%)
(New Construction, price reduction might reflect design changes)

MLS# 2308114 - Haledon, NJ
Previous Price $299,900
Current Price $229,900 (Price Reduced 23.3%)

MLS# 2257103 - Franklin Twp, NJ
Previous Price $2,500,000
Current Price $1,999,900 (Price Reduced 20%)

MLS# 2278877 - Wantage, NJ
Previous Price $399,000
Current Price $325,000 (Price Reduced 18.5%)

MLS# 2307369 - Tenafly, NJ
Previous Price $1,200,000
Current Price $999,999 (Price Reduced 16.7%)

MLS# 2265000 - Montgomery, NJ
Previous Price $745,000
Current Price $629,500 (Price Reduced 15.5%)

MLS# 2297795 - Oakland, NJ
Previous Price $349,900
Current Price $299,000 (Price Reduced 14.5%)

MLS# 2281058 - Blairstown, NJ
Previous Price $1,750,000
Current Price $1,499,900 (Price Reduced 14.3%)

MLS# 2281707 - Parsippany, NJ
Original List Price $199,000
Previous Price $174,900
Current Price $149,900 (Price Reduced 14.3%, 24.7% off OLP)

MLS# 2303392 - Frelinghuysen, NJ
Previous Price $575,000
Current Price $495,000 (Price Reduced 13.9%)

MLS# 2292034 - Phillipsburg, NJ
Previous Price $110,000
Current Price $95,000 (Price Reduced 13.6%)

MLS# 2263675 - Parsippany, NJ
Previous Price $449,900
Current Price $389,900 (Price Reduced 13.3%)

MLS# 2261514 - Kinnelon, NJ
Original List Price $1,500,000
Previous Price $1,495,000
Current Price $1,299,000 (Price Reduced 13.1%, 13.4% off OLP)

MLS# 2293197 - Scotch Plains, NJ
Previous Price $1,150,000
Current Price $999,900 (Price Reduced 13.1%)

MLS# 2290765 - Mine Hill, NJ
Original List Price $529,900
Previous Price $515,000
Current Price $449,900 (Price Reduced 12.6%, 15.1% off OLP)

MLS# 2264082 - Bernardsville, NJ
Original List Price $2,950,000
Previous PRice $2,795,000
Current Price $2,450,00 (Price Reduced 12.3%, 16.9% off OLP)

MLS# 2282243 - Wantage, NJ
Previous Price $1,250,000
Current Price $1,100,000 (Price Reduced 12%)

MLS# 2298374 - Delaware Twp, NJ
Previous Price $289,500
Current Price $255,000 (Price Reduced 11.9%)

MLS# 2290487 - Bloomingdale, NJ
Previous Price $595,000
Current Price $524,000 (Price Reduced 11.9%)

MLS# 2261474 - Delaware Twp, NJ
Previous Price $849,900
Current Price $749,900 (Price Reduced 11.8%)

MLS# 2300373 - Wayne, NJ
Previous Price $850,000
Current Price $749,900 (Price Reduced 11.8%)

MLS# 2222350 - Alexandria, NJ
Previous Price $850,000
Current Price $750,000 (Price Reduced 11.8%)

MLS# 2289994 - Montague, NJ
Previous Price $425,000
Current Price $375,000 (Price Reduced 11.8%)

MLS# 2300603 - Passaic, NJ
Previous Price $339,000
Current Price $299,900 (Price Reduced 11.5%)

MLS# 2292687 - Dover, NJ
Original List Price $489,900
Previous Price $449,900
Current Price $399,900 (Price Reduced 11.1%, 18.4% off OLP)

MLS# 2294449 - Knowlton, NJ
Previous Price $899,900
Current Price $799,900 (Price Reduced 11.1%)

MLS# 2265797 - High Bridge, NJ
Original List Price $329,900
Previous Price $319,900
Current Price $284,900 (Price Reduced 10.9%, 13.6% off OLP)

MLS# 2300440 - Bernardsville, NJ
Previous Price $2,430,000
Current Price $2,174,000 (Price Reduced 10.5%)

MLS# 2306162 - West Paterson, NJ
Previous Price $699,000
Current Price $629,000 (Price Reduced 10%)

MLS# 2278473 - New Providence, NJ
Previous Price $499,900
Current Price $449,900 (Price Reduced 10%)

MLS# 2257816 - Frenchtown, NJ
Original List Price $529,000
Previous Price $499,000
Current Price $450,000 (Price Reduced 9.8%, 14.9% off OLP)

MLS# 2275644 - Clark, NJ
Original List Price $799,000
Previous Price $759,000
Current Price $689,000 (Price Reduced 9.2%, 13.8% off OLP)

MLS# 2264096 - Wyckoff, NJ
Original List Price $1,169,900
Previous Price $1,099,000
Current Price $999,900 (Price Reduced 9%, 14.5% off OLP)

Caveat Emptor!
Grim

Deflating the American Dream in Jersey

From the Herald News:

Higher bills, flat incomes deflate the American Dream in Jersey

Frederick Rembis, a Clifton resident, has kept a log of his annual property tax bills for decades. Over the last few years, he's been troubled by what he's seen.

"Every year I write a larger check by 4 to 6 percent," said Rembis, 62, a retired engineer. "I'm worried."

Rembis is right to be concerned. Since 2000, property taxes in Passaic County have surged, while incomes have barely grown. Tax rate increases in many municipalities have doubled and nearly tripled the pace of household income growth, an analysis conducted by the Herald News has found.

Local homeowners say they have felt that shift acutely. It's made them cut spending, postpone retirement and contemplate moving out of state.
...
Passaic County property taxes increased by an average of 39 percent between 2000 and 2005, according to state data.

During that time, census statistics show that the county's median household income, when adjusted for inflation, plummeted by roughly one third.

The largest property tax increases since 2000 were in Lodi, Prospect Park, Totowa and Little Falls. Lodi's property taxes ballooned by 18 percent between 2003 and 2004, which was five times the inflation rate. From 2000 to 2005, Prospect Park saw the biggest overall increases in taxes, which rose by 52 percent.
...
New Jersey's property taxes are the highest in the nation, and twice the national average, according to census data. The average Passaic County homeowner paid $6,420 last year in taxes, more than $500 more than the state average.
...
The situation changed on both the spending and revenue fronts in 2000. As the American economy cooled, salaries stopped growing robustly and income tax revenue fell. State income tax revenue had increased by 14 percent between 1998 and 2001; it fell by the same percentage in 2002, according to Hughes. State spending also grew on a number of fronts. New Jersey's state work force swelled rapidly, fueled by school hiring and political appointments, according to Hughes.

"No one wanted to cut back," he said. "We lost discipline."

Debt Trap

From the Contra Costa Times:

More use homes as main asset

Instead of building a nest egg for retirement, a growing number of homeowners are putting themselves in a debt trap.

Economists and investment advisers say that more Americans are relying on their homes as their primary asset for retirement. These retirees-to-be reckon they can always tap the expanding wealth in their residence to cover their leisure years.

The reasoning goes something like this: Need some cash? No problem, just get a home-equity line of credit. And because home values have skyrocketed in recent years in places such as the East Bay, homeowners figure they can replace the equity lost from taking out the loan within a year or two. Plus, down the road, they assume they can always just sell the house or get another loan to raise some quick cash for retirement.

"People are making the mistake of thinking they live inside a big piggy bank," said Libby Mihalka, president of Altamont Capital. "They don't realize it can all snowball out of control very quickly. Their house is not an ATM."

Two new studies confirm the trend. One, by the Securities Industry Association, found that the declining savings rate in America in recent years has coincided with an increase in mortgage debt. Another study, by a San Francisco-based economist with the Federal Reserve Bank, found that the level of property-debt burden, compared with income, has risen in recent years.

"This is a form of financial insanity," said Frank Fernandez, chief economist with the Securities Industry Association. "You are digging yourselves deeper into debt using an asset that could decline in value."

"Downsize Me!"

From MSN Money:

Homeowners say "Downsize Me!"

Americans are carrying a lot of excess weight and desperately want to slim down. No, not their waistlines -- in the size of their homes.

"Steeply deteriorating." "Hard landing." "Kaput." These are some of the terms used by analysts to describe the slowing of the U.S. housing market. And with the glory days of home-price appreciation now over, some homeowners are declaring, "Downsize Me!"

A huge gap between the supply of homes for sale and demand for housing means prices are leveling off -- and could tumble. David Horwitz and his wife, Diane, are the type of homeowners looking to streamline their expenses and unload their roomy homes for more humbler abodes.
...
Diane Ramirez, president of Halstead Property, has seen downsizing pick up steam in recent months, especially among suburbanites in New York, New Jersey and Connecticut.

"Homeowners are probably sensing now may be the right time to get the best price before the market cools further," Ramirez said. "Some of these homebuyers are empty-nesters now finding their homes are larger than what they need and more than they can handle."

Senior Tax Freeze

From the Asbury Park Press:

Man, 90, dismayed by property taxes

For the last 85 years, Charles Aufiero has called a small brick house on East 11th Street home.

He remembers when the road outside was dirt.

"My whole destiny was to be in this house and take care of my people," said the 90-year-old, who never married.

But when he got his property tax bill in the mail a few weeks ago, Aufiero's days in the family home appeared to be numbered. His tax bill more than doubled, the result of a property revaluation in town.

"I damn near fell through the floor," he said.

For the past week, he has contemplated selling the home and tried to figure out ways to make the numbers work, to stretch out his $700 a month from Social Security.

What he didn't know is that he may be eligible for help from the state.

Seniors who earn less than $40,869 can apply for assistance in the form of a "Senior Freeze" on property taxes. The deadline for applying this year has been extended from Aug. 15 to Oct. 31, State Treasurer Bradley Abelow announced earlier this month.

"I never heard of it," Aufiero said. "That would help a lot."
...
When Aufiero's tax bill arrived, instead of the $548 quarterly tax bill payment he's been accustomed to making for years, his August bill was $1,364.

Aufiero now wonders if there are others out there wrestling with how to cope, unaware help is out there. In Aufiero's case, it took the jolt of a revaluation to spark a hunt for help.
...
Aufiero says he wants to die in the same home his father, Frank, died in more than 30 years ago. A neighbor, Aufiero said, recently offered him $350,000 for his cramped house. He's thought about accepting the offer and moving to a home for veterans. Now, because of the Senior Freeze, Aufiero is feeling hopeful about staying.

"I don't want to go," he said. "I live here. I don't want to move till I die."

Lower Property Taxes? Buy a "farm".

From the Courier Post:

Landowners abusing tax breaks

A top environmental group is claiming that a state program meant to provide farmers tax breaks is being abused by "phony farmers."

By owning a few horses or mowing some hay, landowners are able to save a bundle on property taxes while the rest of the state's property owners pay taxes that are ranked the highest in the nation, said Jeff Tittel, president of the Sierra Club's New Jersey chapter.

"Certain people are taking advantage of the system and it raises the taxes for everybody else," Tittel told The Press of Atlantic City for Sunday newspapers.

The program, approved by voters in 1966, is available to any landowner with at least 5 acres of land yielding at least $500 per year. Each additional acre needs $5 in production to qualify.

Property in the program has its assessed value lowered by 90 percent, producing big property tax savings.

"They can grow hay or cut down some trees and get the land banked in the assessment program until they're ready to build on it," Tittel said.
...

The program presently requires farmers to pay back three years of savings when they convert to development.

"We say roll it back 10 years and use the money to fund the assessment program," Tittel said.

The group's complaints come at the same time state officials are examining how they might lower property taxes, which on average cost $6,000 per year for a New Jersey property owner, twice the national average.

The Price Ain't Right

From the Asbury Park Press:

Sales strategies

Before Brick resident Vicki Aebischer put her home in the Herbertsville section up for sale at the end of June, she tried to figure out how to price it.

She used the Internet to check prices for homes in her neighborhood. Aebischer also went to a few area open houses to help get a sense of the housing market in her community.

The price tag was set at $424,900 before it was raised to $439,900 after two real estate agents told Aebischer the price was too low. After she didn't get any offers, she dropped the price back to $424,900.

"The market is always fluctuating," said Aebischer, 39. She and her husband, David, are buying a house together, having married in March. "I think the house will go eventually."

When you're looking to sell your house in today's market, your price is where it all starts.

"Your price needs to be right," said Jeffrey G. Otteau, president of The Otteau Appraisal Group Inc. "In today's market, pricing right means pricing for less than your competition."
...
"You have to look at what their competition is and how they want to position their home within that competition," said Banasiak, a broker associate at Weichert Realtors in Marlboro. "If a buyer can really look at two houses that are virtually the same and one is $10,000 or $15,000 cheaper, which one would you buy?"

Sellers have to be flexible in thinking what their home is worth.

"Just because a neighbor got X doesn't mean they're going to get X-plus today, they might get X-minus, which again doesn't mean that they will be losing money on the house," said Tom Stevens, president of the National Association of Realtors. "They will still realize a pretty hefty gain because they probably owned it for a couple of years and the appreciation the last few years has been higher than normal."
...
It can be difficult. Brick resident Lisa Walsh checked the Web site Realtor.com and newspaper advertisements to help choose a price for her three-bedroom colonial-style home in Brick. She set the price at $349,900 in May, and has since cut it to $329,900.

"It is hard to compare within that area, because there are not many houses that are the same as it," Walsh said. "A lot of them are older. A lot of them are smaller. I think it is a really saleable house."
...
"You have to make your home stand out," said Diane Turton, owner of Diane Turton, Realtors.
...
"Put an apple pie in the oven. Have fresh flowers in the house as well," Turton said.

Lehigh Valley Market

From the Allentown Morning Call:

Sellers vexed as homes linger

A year ago when Betty and Lee Castle placed a deposit on a retirement community property, they began to think how much they would ask for the Allentown house they had lived in for 30 years.

They'd read about the frenzy in the real estate market, and figured it would hold.

Fast forward to now: Their 1800s stone farmhouse on the border of Allentown and South Whitehall Township has been on the market for four months, and two price reductions haven't made a difference.

''We should have sold a year ago,'' said Betty Castle, 57, as she sat in the living room that has wide-plank hardwood floors.
...
But the red-hot market that marked the summer of 2005 — when bidding wars were not uncommon, when most homes sold for at least the asking price, when many houses were on the market for less than a month — is now a thing of the past.

The shift in the market is catching some homeowners by surprise.
...
''Everyone has seen the crazy ones sell on their block for an outrageous price. It is a little bit hard to be realistic,'' said Angela Brown, owner of Real Estate Professionals of Hellertown. ''We don't have a plummeted market or a bad market. We have a normal market.''
...
Many real estate agents say they have been counseling sellers to lower their expectations. Often it is a hard message for owners to hear.

''I tell them they need to reduce the price, but they don't want to listen to me,'' said Pete Ramos, president of the Lehigh Valley Association of Realtors, and owner of Ramos Realty in Bethlehem.
...
The local increases in home prices are still handily outpacing the national rate. Economists say there is no danger the Lehigh Valley housing market will crash. Even if home appreciation continues to slow this year, the gains of the last few years won't be rolled back. Economists say the recent correction in the market is healthy.

But try telling that to the Castles, who are 10 weeks from closing on their new retirement home in Northampton.

They don't have a whole lot of room to negotiate on the $339,900 asking price of their farmhouse because they need the money for their retirement home.

Lee Castle, 58, has begun to gather information on bridge loans, in case the house does not sell before the closing of their new home.

Is consolidation the answer?

From the Herald/Record:

Not all Jersey towns have it rough

The borough of Bogota in Bergen County is less than a mile square, but the tiny town maintains its own high school, public works, health and building departments and has a police force of 15.

New Jersey, with more municipalities per square mile than any other state, also has the highest property taxes in the nation.

Is there a connection? The governor thinks there is, offering financial incentives to municipalities that consolidate or share government services. But in places like Bogota, the idea is not so well received.

In the town of 8,200 about 15 miles from New York City, Mayor Steve Lonegan says he's compiled data showing unequivocally that "small towns are cheaper to operate than big cities." Bogota's per capita municipal cost is $741, he said, compared with $2,039 in Newark and $1,183 in Bogota's closest neighbor, Teaneck.

Lonegan said because the borough is small, it can be more fiscally responsible than larger cities.
...
New Jersey is dotted with small towns like Bogota, 566 municipalities in all, along with 616 school districts. Soaring property taxes, which average $6,000 a year, are a perennial top concern among New Jerseyans.
...
Of all the political thickets lawmakers will navigate in their quest to lower property taxes, none is potentially thornier than the idea of towns and school districts ceding the autonomy of "home rule."

Corzine wants the state to give increased financial aid to municipalities and school districts that merge or share services. This could mean combining municipalities into a larger community, or combining local schools into a regional district. It could also prod governments into simply sharing services as high-profile as a police department or as mundane as a tax assessor.