Wednesday, December 14, 2005

A Hoboken Realtor Blog

I found a link to this blog by a Hoboken realtor on Ordinarily realtor blogs are pretty useless and are almost entirely devoid of content that does not portray the local market as the best area on the planet to buy a house. However, this blog, aside from advertising specific properties, does have some interesting sales data derived from the Hoboken MLS, therefore it is probably worth an occasional look for readers interested in Hudson County real estate.

(If I was a realtor with a blog though I would -1. Avoid the use of more than one exclamation point per month. 2. Allow for reader comments. 3. Consider buying advertising on a popular housing bubble blog such as this one.)

little_silvered (Guest Blogger)

Tax Relief? No, not quite...

(This article was written by guest blogger Richie)

Just over a month ago we witnessed the most expensive campagins for the title of "Governor of New Jersey". Both candidates (Jon Corzine and Doug Forrester) promised us New Jersey residents that we would see some type of property tax relief if they were elected. 30-in-three, 40-in-four, either way you slice it, I don't think we'll be relieved of anything.

In fact, Corzine today already backed out against his promise not to raise the gas tax.

Story on WWW.NJ.COM:
Corzine ends his vow to leave gas tax alone

Corzine acknowledged his position has shifted along with prices at the pump. "I vowed not to do it at $3 a gallon, that's for sure," he said. "When it was down at the levels we're in right now, I said I hadn't taken it off the table."

In July, Corzine initially said the state "must find alternatives" to increasing the gas tax. Two days later, under pressure from labor leaders who support it, he said it had to be on the table but should be a last resort.

His Republican rival, Douglas Forrester, hammered away at him on the issue as gas prices soared in the wake of Hurricane Katrina. Then, during a radio debate on NJ 101.5 in October, Corzine said flatly: "There will be no gas tax hike in a Corzine administration, particularly after we've seen a $1.50 rise in the price of gasoline. I'm proposing we have a tax holiday."

Gee Corzine, you're not even in office yet, and you're already backing down from the claims you made to get in office.

In his speech to business executives yesterday, Corzine also offered his first assessment of the overall budget situation he will inherit when he takes office next month. He concluded, "We've got some serious, serious financial challenges ahead."

I'd suggest first slashing some internal budgets before you hit up tax payers. There's probably tons of government sponsored projects that could be slashed to save money. Did we really need a $260,000 expense to find a new slogan for New Jersey? New Jersey doesn't need a new slogan, we need tax relief.

Our new slogan should be: "NJ: Where is our tax holiday?"

Monday, December 12, 2005

I Don’t See the Appeal

The Gold Coast (the Jersey side of the Hudson River) has seen a ton of development over the past few years and there are lots of new projects in the works. Some of the projects look like good ideas, in particular, those developments along the Hoboken waterfront including the Shipyard, the Tea Building and probably eventually the Maxwell House when it is finally built. I think these projects will retain most of their value when the bubble bursts since they are close to public transportation, restaurants and amenities that are more like New York than Newark.

Although these developments seem to offer a reasonable amount of value, I think that other projects further west in Hoboken, many Jersey City buildings and some points north of Hoboken look extremely risky. The condos that have been built on the west side of Hoboken over the past three years seem to have been specifically constructed to satisfy a perception by many twenty year olds that they must own rather than rent. In other words, the fear of being priced out of housing for ever led many young people to buy $500 thousand condos on Adams Street only because that is what they could afford. Never mind that Adam’s street is conveniently located next to nothing, and a walk to the ferry or the Washington restaurants means you have to pass through some questionably safe housing projects. If the fear of getting priced out forever wasn’t so rampant in 2004, 2004 and early 2005, then I seriously doubt many of those western Hoboken condo projects would have been planned and/or built. Those new condos in the west half of Hoboken are going to become pretty cheap rentals in a few years.

The residential buildings that are going up in Jersey City look even more confounding from an investment point of view. Although buying an investment property might have some appeal in Hoboken because of a lack of developable lots, one block in from the Jersey City waterfront is a vast wasteland of empty lots and derelict warehouses that could be made into condos that could house hundreds of thousands of Merril Lynch and Goldman Sachs back-office personnel from now until whenever the next Wall Street crash occurs. In short, Jersey City probably has enough developable property supply to satisfy whatever demand might arise for years to come.

Jersey Shore Bubble Blog

Sunday, December 11, 2005

Age-Restricted Housing - The perfect silver bullet?

(This article was written by guest blogger Richie)

I came across a very interesting article on NJ.COM this morning regarding Age-Restricted developments in New Jersey. I'm sure many of us have come across these developments; they are sprouting up all over with the claims that adding these types of developments to your community will help the town by adding tax dollars without the expense of additional children for the school system.

Now it seems that towns are finding the down-side of age restricted developments, starting mainly with the school system.

Link: Age-restricted housing may not help schools

The musical-chairs quality of home sales illustrates a phenomenon that school officials and demographers hired to determine the future enrollment of the township's schools have long feared: Age-restricted developments are not the silver bullet against rising school taxes that many municipalities throughout the state have touted.

"We said seven years ago that we thought the age-restricted homes would have an impact on the schools because many would be bought by residents who wanted to stay in the community," said Paul Abramson, president of educational planning consultant Stanton Leggett Associates, the firm hired by the school district to study future enrollment.

While the 55-and-over communities generally do not allow children under 18, statistics provided to Stanton Leggett by the township show that at least 40 percent, and possibly as many as 70 percent, of the homes built in the township for those 55 and over are being bought by township residents, which in turn opens their former homes to outside residents - with children.

My question is; what on earth did they expect to happen when the offered these type of developments? Did they assume that the people who moved in to these age-restricted developments would sell their home only to couples with no children?

Tuesday night, the township zoning board is expected to hear applications for three more developments, totaling 421 homes, including one on Route 130 near the Hamilton Marketplace that will house 324 new age-restricted condominiums.

According to demographic projections, if 40 percent of those 2,100 homes are bought by township residents, who in turn sell their homes to people from outside the municipality, between 400 and 680 additional students could result from construction of the age-restricted communities. At 70 percent, those numbers would nearly double.

At a cost of about $9,000 per year to educate each child, those children represent from $3.6 million to $6.1 million in additional school expenses each year.

Doh! Looks like the school system is in for a rude-awakening. Why so many age-restricted developments?

My guess is that developers can get their projects approved much easier. Their claim is that no new children are being brought into the school system because the homes are being sold to couples with no children under the age of 18. What they fail to mention is that the couples who move in; may be possibly selling their existing homes to a couple with children...

Now; another downside to this. Consider any proposal to increase taxes to pay for the school system, who do they think is going to vote against it?

Well, they've just added 400+ homes that are populated by seniors (who are most likely retired) and have a lot of time to do things, especially VOTE. They have no children, why should their tax increase to pay for children in the school system? What do you think they would vote for?

Thoughts & comments?