Bubble Wrap

Property Taxes in NJ an issue as always

Come election season, it’s no surprise that a lot of controversy and debate has been raised with regards to New Jersey’s high property taxes, the highest of any state in the country. Bloomberg reports on the different policies on the issue by the two primary candidates, Incumbent Jon Corzine or his Republican challenger Christopher Christie. Meanwhile, attorney and property tax expert David Wolfe reports to the Star Ledger about the challenges with the state property taxes as a whole and whether reform will actually come.

“I think we’ll have some systematic change, but I don’t know that it will have a dramatic impact on the property tax burden. It will be difficult to achieve real change and success.

In New Jersey, we fund our schools through the local property tax. If we reduce the property tax burden, the funds will have to come from somewhere else. Ultimately, I think the taxpayers will demand some sort of reach change.”

The new estates on the block

The Star Ledger reports on the growing trend in New Jersey of luxury properties being put on the auction block to attract buyers, with one mansion, Froh Heim, being auctioned to the highest bidder after being on the market for $8.9 million. According to the Otteau Valuation Group, inventory of properties priced above $2.5 million is 3 times the state average, making it an attractive category for auctions.

“There’s no question that the level of inquiries increased with respect to luxury homes—sellers seeking an alternative way of marketing,” said Jeff Hubbard, an executive vice president of Sheldon Good & Co. Auctions Northeast, in Manhattan. “In the luxury-homes segment, you will probably see it increase 30, 40 percent next year.”

Peninsula at Bayonne Harbor: Jersey Gold Coast's final development frontier

The New York Daily News reports on the transformation underway at the Military Ocean Terminal in Bayonne as the first building has been completed in what will be a community of 7,000 residential units and 58 acres of parkland.

“This is the most valuable piece of real estate on the entire East Coast,” says Mayor Mark Smith, a second-generation Bayonne police officer who spent 26 years on the force. “We’re a 5-minute ferry ride from the capital of the world. The peninsula has all the potential imaginable for residents, entertainment and job creation. This project is important for the entire region.”

Luxury Condos, All Bids Considered

The New York Times reports on the upcoming absolute auction at The Beacon where the first 12 units will be sold regardless of price.

“Our biggest problem today,” the developer said, “is buyers’ not knowing if they are getting the best deal — not knowing if they wait a little longer whether a better deal will be available. With the auction, you get everybody in a room, and they can see what other buyers, people who would be their neighbors, think a home is worth, and each one can be confident.”

Pending home sales lunge forward in Northeast

The Star Ledger writes on the recent report on increased sales activity in the Northeast, the first year over year rise since August. Experts believe this will only pick up as first time buyers finalize purchases before the November 30th deadline for the $8,000 dollar tax credit.

It might be some months before this rise shows up in standard sales statistics because of the length of time it has been taking buyers, sellers and banks to close deals, Yun said. Short sales in particular, in which banks agree to let homeowners sell their house for less than the mortgage, can take many months.

Local experts weigh in on market

The Bergen Record invites 3 local experts to comment on the real estate market for the local towns they cover. With so much happening on a national level, buyers and sellers alike are unsure of where the marketing is going, and holding out on making any moves.

“The market is very price-sensitive now, buyers today are looking for value and are worried to overpay,” she said. “Larger inventories give buyers more to choose from, so if they can purchase a house in better condition for that same price, they will.”

To serious buyers, O’Connor suggests they hurry, before the market bottoms out.

State may lift age-restrictions on some housing

The Times of Trenton reports on a bill, that if passed, would allow developers of 55 and older communities to remove age limits without municipal approval. Although the demand for these units have dropped considerably, and the bill would include provisions for affordable housing, many argue against such changes:

They say such age-restricted developments were often approved because of their relatively low impact on local schools and other taxpayer-funded government services. Remove the restrictions, they argue, and property owners will foot the bill.

Taxing times for homeowners

The Herald News reports on the prospect that declining real estate values could eventually provide tax relief to some of the highest property taxes in the country. If a homeowner appeals their tax assessment, it doesn’t necessarily mean they will win, as winning tax appeals hasn’t risen much in NJ this year.

“We’re anticipating a substantial number of tax appeals,” said Louis Izenberg, an appraiser who represents towns and large property owners. “Having said that, at the end of the day, the New Jersey Tax Court relies upon evidence, and for the first time I can recall, we really don’t have an abundance of data.”

Hoboken's 47 percent tax hike slows down real estate market

The Jersey Journal reports on the recent passage of a huge property tax increase in Hoboken, with both residents and the real estate community expressing their frustration with the local government.

“The Hoboken market has been very difficult over the past few months,” said Nick Costantino, owner of Empire Realty Group at 4th and Washington. “I haven’t seen people say ‘no’ to homes because of the tax increase but people are making lower offers on homes because of the tax increase. If your taxes go up 47 percent your price will have to come down, they just have to.”

A route to higher home values

Using data from Jeffrey Otteau, The Bergen Record reports on the effects of housing values in New Jersey and its proximity to a rail link.

Those increased values were even more evident in a slow market. This year Otteau revisited that survey, in central New Jersey, and found that homes within walking distance had values 10 percent higher than their counterparts’. Otteau said the findings would “certainly” hold true for Bergen County rail towns.

“This is true in the northern half of New Jersey,” he said. “The closer you get to Manhattan, the greater the effect.”

New Jersey's budget deficit triples to $1.2B

The Star Ledger reports on the significant reductions in state revenue and the Governor’s new urgency to find savings while keeping the formerly announced stimulus package to aid food banks, heating programs, and business climate reforms.

Corporation business taxes were off by nearly 16 percent from the administration’s projections, and income taxes by 14 percent. The sinking fortunes of banks and the housing industry prompted the financial institutions tax to drop 55 percent, and the realty transfer tax 38 percent, below projections.

Corzine, a former chief executive of Goldman Sachs, said last month was the most volatile he’s ever seen. He cautioned that the budget projections are certain to change again.

Up Against the Wall

The NY Post reports on the state of the Jersey City condo market as sales have slowed significantly and developers have increased their incentives, such as free parking, covered transfer taxes, and closing costs.

But there are signs of hope in Jersey City. Near the Grove Street PATH station is Ivy House, a boutique condo building from Fields Development Group and TreeTop Development, which has sold 15 of its 18 units since going on sale at the beginning of July. With prices around $500 per square foot, the units are aimed at entry-level buyers, a demographic, says Fields principal James Caulfield, that’s been under-served by new construction.

Jersey City's Boom Is Set Back

The Wall Street Journal reports on the ascension of Jersey City and what ramifications the current economic crises could have on real estate and development.

The biggest residential boom in the Garden State city’s history brought in thousands of residential units in recent years, and another 72,000 could come by 2050. Big brands including Trump, Toll Brothers Inc. and Hovnanian Enterprises Inc. have put their stamps on the burgeoning skyline.

The boom, however, comes as the worst housing correction in decades has turned into a credit crisis that has seen some of the financial sector’s most storied names, such as Bear Stearns and Lehman Brothers, crumble along with thousands of white-collar jobs.

Downturn strikes at Hudson's heart

The Jersey Journal considers the effect of the Wall Street crisis on the Jersey City real estate market as the financial industry has driven most of the city’s growth in recent years.

Developers of housing projects who cannot unload condos will probably look to Jersey City to help bail them out. They will line up to rework their tax abatement deals similar to that given by the city to Canco Lofts, the development at the old American Can Company property on Dey Street, which now makes lower in-lieu-of-taxes payments than originally agreed.

Englewood builds on trends

The Bergen Record describes how Englewood has changed over the years, building up its density in new mixed-use developments with offices, a hotel, and many condominiums.

Unlike the suburban, single-family homes built in the decades after World War II, Englewood South consists of condos and apartments, reflecting the density of new development in the area. About half of all new residential construction in the state is multifamily, according to Patrick O’Keefe, an analyst with the accounting firm J.H. Cohn in Roseland and former head of the New Jersey Builders Association. And much of this dense development is concentrated in Bergen, Hudson and Essex counties, he said.

A Native Son’s Plans for Newark

Another announcement boosting Newark’s redevelopment efforts was recently detailed in the New York Times. Shaquille O’Neal and partners were recently named the developers of a new 25 story tower that would be the city’s 3rd tallest with a significant symbolic impact.

The glass-and-concrete tower on Rector Street, called One Riverview, would provide 152 high-end condominium units with amenities like those found in Manhattan, Hoboken and Jersey City (including street-level retailing, garage parking, concierge service, an in-house gym, and a 10,000-square-foot promenade with a dog run) in a city that has not seen such a luxury residential project in roughly four decades.

Slowing Foreclosures May Mask Bredth of Woes

The Wall Street Journal reports on the changing foreclosure landscape. Reports out later this month will most likely show a decline or leveling off of foreclosure filings, but this is most likely due to new state and municipal laws that put a temporary moratorium on foreclosures. Critics of these laws say they are just covering up the deep housing crisis.

Several other states are following, including New York which passed a bill last week that requires lenders to send a preforeclosure notice to certain borrowers at least 90 days before foreclosure proceedings may be initiated.

NJ rental market continues to grow

According to the Bergen Record the rental occupancy rate in New Jersey has risen to 97 percent with an average rent of $1,453 per month, coupled with many significant rental projects being completed in the last few years.

The mortgage crisis and uncertainty about housing prices have meant that many people who might have bought houses are instead choosing to rent. In addition, renters who can’t afford Manhattan prices have been moving across the Hudson River to New Jersey, especially along the waterfront.

Firms fault Jersey business climate

The Star Ledger reports on results of the survey, done for the New Jersey Business & Industry Association advocating many changes to Jersey’s regulations and taxes.

Of the 278 business executives polled and interviewed last fall, only 23 percent say New Jersey is doing a good or excellent job of making New Jersey affordable. The skill level of the state’s work force got high marks from 51 percent, while less than one-third percent approve of the state’s energy and health care affordability and overall tax structure. Less than half are satisfied with New Jersey’s transportation infrastructure and its labor and environmental policies.

Hoboken Weathers the Market

The NYTimes describes the Hoboken real estate market as still humming along, with new developments still selling out, yet at a slower pace.

Hoboken was often held up as the prime example of the booming real estate market, and now it appears that the city is showing that it can hold its own in a down market, too.