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I agree with Kevin that a lot of homes that are preforeclosure have not even gotten to the foreclosure state yet and therefore once they hit the market as bank owned, we will see even more fall out in lower prices in neighborhoods. There are a ton of short sales, but most buyers are leary of dealing with them - which makes it even worse, because ultimately those homes are in line to go back to the bank.
It's silly to try to predict a "bottom" ... you can't ever really know when the bottom is until you're already OUT of it!
I think you hit the nail on the head. The OP's premise is that cutting state expenditures will cause the state workers to lose jobs, lower salaries and lower benefits, leading to a declining hosing market. I think that just the opposite is true. There are a lot more private sector workers than state workers. If we dont break the cycle of infinitely rising property taxes, these private sector workers, who are either unemployed, or taking a decreased salary are going to have even MORE trouble keeping up their payments. Now, I haven't seen property taxes stop rising yet, but logic dictates that if you cut expenditures, the taxes will eventually not have to be as high as they otherwise would have been. The Star Ledger had an article about property taxes in West Orange, where people are often paying more in property taxes than they are on their mortgage. That is just outrageous. The prices in West Orange are great, mainly because the property taxes are so punitive that nobody wants to buy the houses...even at a fair price. More measures need to be taken to decrease property taxes, not less.
Now I don't know what % of WO tax bill is what - but residents are partly to blame because they do vote on the budget, no? They need to take some responsibility for the punitive taxes.
Now I don't know what % of WO tax bill is what - but residents are partly to blame because they do vote on the budget, no? They need to take some responsibility for the punitive taxes.
Perhaps, but that brings me to another observation. It seems that towns known for the highest property taxes, without schools to match are also the most economically diverse. Montclair, West Orange, South Orange, Maplewood, Englewood, etc. Is this a product of the have-nots (resource users) in town voting budgets that the "haves" (resource providers) can't necessarily afford? And what can really be done to fix it? Here in Essex County, the more homogenous west essex tends to have better schools and lower property taxes than the more economically diverse towns of the east. Personally, I would love to move to Montclair, but then my kids would have to go to private school. To pay that kind of property taxes AND private school would be crazy. The other towns I mentioned have the same problem.
Perhaps, but that brings me to another observation. It seems that towns known for the highest property taxes, without schools to match are also the most economically diverse. Montclair, West Orange, South Orange, Maplewood, Englewood, etc. Is this a product of the have-nots (resource users) in town voting budgets that the "haves" (resource providers) can't necessarily afford? And what can really be done to fix it? Here in Essex County, the more homogenous west essex tends to have better schools and lower property taxes than the more economically diverse towns of the east. Personally, I would love to move to Montclair, but then my kids would have to go to private school. To pay that kind of property taxes AND private school would be crazy. The other towns I mentioned have the same problem.
I'll give you Glen Ridge...but they have a school system to show for it. Millburn too. But North Caldwell is low compared to all the other examples I gave.
i think this depression will be around for a good 10-15 years and everything will be getting worse and worse until all the sudden it will really get bad.
i think this depression will be around for a good 10-15 years and everything will be getting worse and worse until all the sudden it will really get bad.
Well aren't you just a ray of sunshine on this cold Monday morning.
The best thing to do is stay put where you are for a VERY Very long time if you don't want to lose money!!!.(If you can). I have a house I bought 2009 and was hoping that in 10 years(This depression would be all over) from now it would appreciate a bit so we could upgrade into our "Dream House"....but I'm thinking very differently the past few months now...my house is 2000 SFT and a decent size, and not small by any means. We have no kids yet... it is 3 bed/2.5 baths...so it really is enough. This recession/depression has made me rethink things in terms of what we Really need versus Wants...I realize that staying in the same house for a long time allows you to put money away in other places...invest etc..if you keep upgrading it is harder to have any net worth in the end(unless you make a profit from each house, but now that is just a fantasy in this market)
I think the decision to buy should all come down to whether or not it is the right decision for you to personally make. Also, when that time does come, stick to your budget and address your needs first and try to see if you have enough left over to get some of the wants included as well.
As for the long term market, my guess would be that real estate will perform to it's historical inflation based appreciation. So, don't bank on your homes value going through the roof and being able to flip it and move up the way people used to.
Also, while short sales and foreclosures seem to dominate the market, they seem to be having little effect on traditional sales at least in my area. The process for buying a foreclosure/short sale is daunting and people seem to be seeking out the few homes that are a regular sale without these issues and those homes are still able to get market value. In my development there is one foreclosure that has been on the market for almost a year. In that time 8 other homes have come on the market and sold within 3 months that were all traditional sales. Also, the bulk of the pain seems to be in the move up market. If you are in what could be classified as a starter home, those seem to have a pretty easy time selling.
Just about everything's been said about shortsale, inventory, etc. My biggest take on current RE market aside from things mentioned are three things.
1. Unemployment rate
2. Property Tax/Quality of public education
3. Transportation
Until employment situation improves, people will be hesitant about taking on one of the biggest debt of their lives (even at very low rate) to purchase a real estate.
While families or couples planning for children are more willing to pay the high property tax for quality public education. It's a turn off for people not in that category. Especially if town has crappy public education but still charge the same property tax range of 2-2.2%. At the same time, good public education is one big plus that draws people.
Transportation is big factor for North NJ, it's close to NYC and provides multiple ways into city. While having choices of towns with good public educations. It's great. Honestly though I think quality/hours of bus service and cost is getting nutty and need to be controlled. For example, in 2010 monthly bus rate went up 25% for us and services were reduced. My wife's profession requires her to work some saturdays and she can't take the bus because first bus service on weekend doesn't start until 7:30am...If there is no traffic at all, earliest she can get to port authority is 8-8:10ish. It's actually forcing us to probably move soon.
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