stratstyle, Home Buyer in Summit, NJ

NJ Property Taxes - The sole reason for the market decline?

Asked by stratstyle, Summit, NJ Tue Mar 26, 2013

Help the community by answering this question:

Answers

8
BEST ANSWER
Hello Stratstyle,
Your question is valid, and perhaps I can contribute to the discussion.

First, if you see or use real estate websites that do not have tax information listed with their active listings do not use those sites. Tax rates and amounts are public information.

Taxes will remain high in New Jersey until 2 things happen. First, governments figure out a way to spend less money. Second, here in NJ we need to allocate money more fairly.

The county governments and the state both redistribute tax dollars around the state as they see fit. Abbott school districts get far more state funding than the districts that they serve contribute in tax dollars. In Passaic County the county government spends far less in the northern part of the county than they do in the southern part of the county. So the northern part of the county has to make up for the lost revenue through higher local taxes.

I wish Realtors had the clout and ability to affect property tax reform; it would help our industry immensely. Property taxes are local since almost two-thirds of the property tax bill goes to the local school district and town government. Realtors cannot fix the property tax problem. Local residents and individuals can have a major impact on property taxes.

The Founding Fathers did not believe in property taxes. They felt that it was unlawful and unjust to tax what a person owned or what they used to make a living (most people back then were farmers). The word Liberty meant the ability to freely own and use real property (land). A person had the right to his own Life, Liberty (use and possession of land), and the Pursuit of Happiness. Sounds like a nice place to live doesn't it?
0 votes Thank Flag Link Wed Mar 27, 2013
This looks like a fun discussion(not)! By the way it is just as insane here(Taxes)!!
2 votes Thank Flag Link Wed Mar 27, 2013
Thanks Allan! We were considering going just over the border by Nanuet - very nice areas there! Seems it would be about the same in terms of taxes though. Thanks again!
Flag Wed Mar 27, 2013
New Jersey Association of REALTORS monitors all state legislation and is constantly informing REALTOR members, the public, and our officials on matters concerning property rights and home ownership. NJAR stands tall in its voice to educate on matters to preserve and protect property owner's rights.

Our property taxes in NJ are high, and many REALTORS are homeowners, too.
1 vote Thank Flag Link Tue Mar 26, 2013
Thank you! Good to hear!
Flag Wed Mar 27, 2013
Deborah Madey, Real Estate Pro in Red Bank, NJ
MVP'08
Contact
You make a very good point - what you qualify for and what you are comfortable spending each month, may vary. It is always wise to keep a cushion - a lesson learned by many who didn't do it.

The market correction is behind us now....though we are not forecast to return to the value of '05/'06 anytime soon, a steady but gradual upward climb is forecast in most NJ markets....and certainly Summit will be among those that will perform better than many.

Best,
Jeanne Feenick
Unwavering Commitment to Service, Unsurpassed Results
0 votes Thank Flag Link Sun Mar 31, 2013
Hi Brian,

Thanks for responding! Very helpful! In the subject line I used "sole reason" to grab some attention to the discussion. I do understand that many of the people that have, or are in the process of foreclosing simply bit off more than they can chew. Many that got into bidding wars are inherent impulse buyers; when the banks gave the green light, they wanted to win the bidding war and didn't hesitate to assess how much was too much to pay for the property; many are assessing those mistakes now however. I remember when I applied for my first mortgage in 2000; the amount I qualified for was obscene (too much) considering my salary at the time. I was smart enough to take them up on only about half of the amount. Nonetheless tax reform would help the market immensely; I can tell you first hand that Property Taxes are keeping me cautiously on the sidelines. Even though we would still make some profit on the home despite the decline in value, from a buyer’s perspective we are paying the price as well for those past mistakes by others. I've heard that this is a buyer's market - and that’s true, to an extent. When you see a listing that seems overpriced and you look deeper at the Price History, in most cases they are asking somewhere near the (higher) price they paid a few years ago. As I complain about taxes I can’t fault those that don’t want to lose money. The market is out-of-whack right now. Those homes tend to sit on the market longer -while the fairly priced homes go rather quickly.

Thanks for your time and insight!!!
0 votes Thank Flag Link Thu Mar 28, 2013
Sorry Stratstyle, I did not fully answer the question you asked. I hope this added explanation helps. The issue gets more complicated than this when you examine the impact this has had on the market; however, this is where all the trouble began.

The decline of the housing market is the direct result of the banks loosening their lending standards (the government coerced them to do so partly by telling them the riskier loans they made were "backed" by the government hence the bailout). States and counties and municipalities have lower taxes than NJ and their housing markets also saw major losses 5 years ago. North Jersey's high taxes are not the sole reason for the decline; however, they are not helping the recovery.

Thanks for the good question. I'm glad to engage in a discussion with you on the housing market in NJ. If you want more of an explanation or want to discuss other issues, post your question here or email me.
0 votes Thank Flag Link Thu Mar 28, 2013
High property taxes , low price properties
0 votes Thank Flag Link Tue Mar 26, 2013
If only that were true - NJ has some of the highest priced zip codes in the country - proximity to NYC is one reason why, but prices here, contrary to what you think, are NOT low..one town near me has starting prices in the 700+ range (wht 1 car garages!)....and there are many other similar towns. Check out Alpine, NJ's average priced home!
Flag Wed Mar 27, 2013
Thanks Santiago - Unfortunately for NJ we have higher prices and higher taxes. I don't necessarily mind the higher prices because that is determined by market demand - it's marrying that ever-increasing tax burden that bothers me most.
Flag Wed Mar 27, 2013
I believe property tax levels are a major factor contributing to both the struggling real-estate market and moreover, the current record level of foreclosures in NJ. I hear homeowners say they just can't afford to pay anymore. What is it exactly that they can't afford? Take a look at the average mortgage statement and the amount that goes toward escrow and you will find that answer; it's not the part that goes toward property insurance either. For municipalities it seems that homeowners are an easy stand-still target to pick and fleece from; however, the foreclosures are a manifestation indicating that they are starting to kill off this source of easy revenue. Real estate professionals should be front and center pushing for an effort to implement an effective property tax reform strategy that would roll back the current tax costs. I think that if this was successful, the market would recover almost immediately. I'd like to hear your thoughts on this. I know high taxes aren't news - but the reason I bring it up is because it seems most agents try to avoid discussing this cost until later in the hiouse hunting process. Taxes aren't always disclosed on most Realtor websites.
0 votes Thank Flag Link Tue Mar 26, 2013
Search Advice
Ask our community a question
Email me when…

Learn more

Copyright © 2014 Trulia, Inc. All rights reserved.   |  
Have a question? Visit our Help Center to find the answer