Monday, March 19, 2007

Mortgage Fact: Unenplyment Matters


It is good news about the job market! The unemployment numbers for February dropped to 4.5 percent nationally. In New Jersey the unemployment rate held a 4.2 percent (Department of Labor and Workforce Development) in February unchanged from January. With the hoopla over the stock market decline, some might have missed that New Jersey’s unemployment rate is lower than the national average again in February. Granted it is merely 3 tenths of a percentage point but it is something to crow about while everybody else is bemoaning the loss of 12,000 on the stock market. We live in a capricious society where anxiety over the stock market reigns, rather than a celebration of the lower the unemployment rate which is an indicator of a healthier the economy. The healthier the economy the more likely people are to at least catch up on their mortgages rather than default entirely and have their home fall into foreclosure -- which is the major anxiety-maker of the moment.
Granted the number of foreclosures is up but with the increase in the number of subprime mortgages out there some pruning had to be anticipated one would think. Is that any reason for investors to start withdrawing from the mortgage investment market? Apparently so if last week's market ending is anything to go by. Still at least in New Jersey, unemployment is lower than the national rate!
Read the article

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Thursday, March 15, 2007

A Community Loss

What is going on in Princeton Township? First the Princeton planning board approved a project that would get rid of 900 trees and now there is another project that will get rid of another 804 trees. Granted the developers will replant 586 trees between the two projects but still an 1118 tree loss seems a bit excessive.
A friend said to me recently that New Jersey was going to have to change its name from the “Garden State” but cause it in not in the least rural anymore. While I agree we are not as rural as we were, we do have a lot of mature trees around with plenty of greenery left to see.
I guess the board got the idea about so many trees being lost might be a problem because they attached a provision to their approval that the developer minimize the number of tree lost.
The advisory panel also recommended that the developer be required to plant or pay for enough replacement trees on and off the site to ensure that the project does not lead to a net loss of trees for the community. Article here

Both developers will have to make financial contributions to the township's tree plantings. Whether that will replace the mature trees lost remains to be seen. It would be nice though, if the Garden State continued to have mature trees around.
Read the original article

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Wednesday, March 14, 2007

ARM's Worries Affect Stock Market

It has been a bit of concern to everybody including the Fed, but until yesterday it had not really showed in a way that would get the working man’s attention. Yesterday it did. What was it: the concern over sub-prime loan defaults, i.e, foreclosures.
Investors withdrew from the sub-prime mortgage sector yesterday and caused a drop in Dow Jones Industrials of more that 240 points. In fact, all the US stock indexes were down about two percent.
Granted there were other contributing factors like retail sale profit figures being relatively small (0.1 percent) and the Mortgage Bankers Association saying that foreclosures increased 28 basis points from the third quarter which is up 25 basis points from last year.
While there forecast for sub-prime loans continues to look dour the number of houses on the market continues to increase. Prime mortgages continues to rise and buyers have plenty of variety from which to choose their future home.

Read the MBAA press release
Read The Times of Trenton article


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Monday, March 12, 2007

Capital Beat: No Citizen’s Convention on Tax Reform

What a difference's three months makes! Now just last year there was much talk of convening a citizen’s tax convention to deal with the property tax problem. There did not seem to be any other way to manage the problem and then New Jersey gubernatorial candidate Jon Corzine said he would push for just such a convention. Well here it is almost Spring and according to George Amick we should “stick a fork in the idea” because “It’s done”. For at least another year, New Jersey homeowners will continue to pay the highest amount in property taxes in the country.
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Thursday, March 01, 2007

Following the Mortgage Dollar

Ever wondered what really happens to your house payment?

It seems logical that it would go to the lending company that made the loan to buy the home -- and it does, but it takes a longish trip along the way.

If your mortgage stayed in your lending company's portfolio, the lender would probably have to wait many years before the loan was paid up. And the relatively small monthly mortgage payments wouldn't provide enough money to enable the lender to continue making home loans.

But most mortgage loans don't stay with the lenders who made them. To obtain more money to lend, most lenders sell their mortgages on the secondary market -- a large network of investment companies and quasi-government agencies, including the industry giants Fannie Mae and Freddie Mac.

If your mortgage is sold to one of these organizations, you may never know it, because the mortgage's new owner will often use your original lender to service the account.

But you money doesn't stop its journey at that point either. The purchasing organization must also replenish their money supply, so they can keep on buying mortgages. They pool you loan with thousands of others and sell shares in the pool to individual investors and big financial institutions. Countless people obtain income by investing in these mortgages.

Because of this, when you buy a home, you're not only helping yourself, you're also helping our economy.



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Wednesday, February 28, 2007

Property Tax Reform: Is it Really Dead?

Perhaps we should autopsy property tax reform to see what killed it. By real reform I mean more than the stop-gap measure that is in the works. Yes, the special interest groups played a part in the downfall of this last attempt to curve the runaway costs of living in NJ. It was naïve to think that the Governor and legislature could pass a tax reform package that would really give New Jersey an overhaul especially this close to an election year. That legislators could or would police themselves and end practices that drain the state’s revenues, well we got a clue when they balked at changing rules that allow dual office holding, seems just plain wishful thinking. Instead in a slight of hand move unionized workers’ benefits and pension plans became the fall guys. Legislators can continue to hold down two positions in state government and in effect rob state revenues that double benefits without demanding any real work.


Is it any real surprise that the legislature will pass only about half of the 98 special committee’s recommendations? Not really. Blame the special interest groups for trying to prevent their membership from having to bear the brunt of the reform effort, blame the Governor for hearing the pleas of the people and calling a special session of the legislature, blame New Jersey residents for wanting lower taxes in the first place; but, whatever we do, don’t blame the legislators themselves who gave up the fight for real tax reform before the first bill was drafted.

Read the article.


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Tip of the Day: Paint

Stumbled across this article today and thought it would be fun. A friend to sellers, buyers and renters alike, paint can do many things to help create a mood. It is a low-cost way to freshen a room. It can help reduce the recurrence of mold and mildew and depending on the play of light in the room can appear to deepen or lighten itself. For about $20-$45 per gallon of paint you can revitalize a room or change it entirely using different application techniques. There is nothing else that can do so much in a room for such a price.

Read the article.


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Monday, February 26, 2007

Hamilton Transit Village Back On Again

Well, it looks like the transit village is on again in Hamilton -- almost anyway. Seems the squabbling town council and the mayor met again with transit company representatives and agreed to act in the public interest and get more public input and further studies into the proposal to create a mixed use site at and around the Hamilton Train Station. The Republican council and Democratic mayor agreed to put partisanship aside and act for the public good much like their neighbors in West Windsor, who are also getting a transit village. The complaint of disruption the proposed project would create around the station is moot because the traffic pattern around the station is already changing due to parking expansion. The station sits alone with many, long abandoned, commercial properties. The transit village would definitely vitalize that area. If done carefully the Hamilton Station area could well become a destination in New Jersey in its own right allowing visitors to check out Hamilton’s attractions or use Hamilton as a base to hop over to Philadelphia or New York for big city shopping or entertainment. Hopefully the servicing the people attitude will last long enough to allow this project to move ahead.

Read the article.


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Thursday, February 22, 2007

Blunder Costs Ewing Township $40Gs

Looks like the folks in Ewing Township had a bit of a blunder with a land deal. Seems the tax collector sold a tax lien on property the township did not own. The township’s tax collector sold the lien on property out by the Trenton/Mercer Airport. The lien was purchased by Capital Asset Research Corporation. When CARC tried to foreclose on the property, it discovered the property was actually owned by Mercer County rather than the township.
CARC was awarded $51,000 from Superior Court but struck a deal with the township for $40,000. Ewing Township may be able to recoup some of the money for this mess from the tax collector’s bonding company.
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Wednesday, February 21, 2007

Energy Conscious Get Knocked in the Wallet

Okay when I read this article I thought, no good deed goes unpunished. Do something environmentally conscious and what do you get: knocked in the wallet. It seems if you spend the money to have solar panels installed to provide energy for your home, then township assessors come along and counts the panels as a home improvement and ka-ching! You pay more in property taxes.
Folks it really does not make sense that on the one hand the state, encourages people to use less fossil fuel and solar energy is just what is need to fight global warming. Those hearing the call and having the means invest in solar energy and thereby use less fossil energy. But then the township turns around and taxes the improvement? That is a really good way to get resident cooperation and participation in energy conservation efforts.
Though I have not come across a property yet that has solar paneling in its assets, either for purchase or sale. I would imagine it would be a good selling point; however if townships are going to use the panels to raise the taxes that could be make them a liability.
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Monday, February 19, 2007

Real Estate Investing: Foreclosure

The number of properties nearing or in foreclosure has increased to 1.05 percent in the third quarter of 2006 from 0.99 percent in the second quarter. In 2005 the rate was 0.97 according to the Mortgage Bankers’ Association. Thinking of investing in a property that is in the foreclosure process? While there are bargains out there, some research is definitely needed to make sure everything stays fair and meets your profit taking goals. Things that can make a foreclosure less than ideal are liens on the property, repair work, and holding costs (the funds needed to keep the property in “showcase” condition while awaiting a buyer).
Amy Hoak does a pretty good job explaining things for the real estate investor. It is worth a read.


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Thursday, February 15, 2007

West Windsor Proposes Tax Hike

Well, it is beginning. Governor Corzine has not even signed the 20 percent tax benefit for homeowners and already a municipality has proposed to raise its property taxes 7.5 percent to $.29 cents per $100 assessed property value. That works out so that a home assessed at $574,800 would pay an extra $115: $1667. Where have these township people been? The Governor is has legislation on his desk that will force municipalities to only raise taxes by no more than four percent. Why create a budget that ignores that?
This is the first work session for township officials so perhaps it is their wish list stage and some serious trimming will occur at other meetings. The police and emergency services, municipal courts, and community development still have to be discussed. Hopefully West Windsor officials are letting these "others" know the budget is already over the Governor’s high mark, and thereby prompting those entities to expect severe trimming. Perhaps by announcing the high proposal township officials are like Barack Obama, when he announced the misdeeds of his youth -- it is a preemptive measure but bares little resemblance to the end product. Meantime, one can only hope.
Read the Report

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Thursday, February 08, 2007

Tip of the Day: Cabinet Hardware

Love Tim Carter of Ask The Builder. Thought his response to Lois was just right. Finding hardware that matches the rest of the style of the kitchen is important. I had a CMA appointment were every cabinet had a different knob on every cabinet door in the kitchen. The wife had just removed the original hardware over time and replaced it with whatever struck her fancy at the time. No two cabinet doors or drawers had the same pull. It was amazing. I explained that buyers might not necessarily have her artistic eye and that we needed to make things easy for buyer to imagine living in the space. She was willing to make the changes and kitchen cabinetry became an asset rather than a liability.
Read Tim's cabinet knob advice

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Wednesday, February 07, 2007

Tax Plan Passes Senate

Well, they took two months longer than they said they would and there seems to be some doubt whether the bill will be sustainable or not but the tax bill (S20/A1) is on its way to Governor Corzine’s desk.
There was a bit of drama with this vote because Senate leader Richard Codey (D) held the voting board open for two hours. He had four members of his party who either voted no or abstained from the vote altogether. Senator Codey brought the Senators back yesterday in effort to pass the bill and vowed to keep bringing them back until the bill passed. With some behind the scene lobbying of Republicans for votes by Gov. Corzine and Codey, the bill finally passed (28/10) and is now on it way to Governor Corzine’s desk where he is expected to sign it.
That the bill is bipartisan even though Senate Minority Leader Leonard Lance (R) was against the bill means there is hope for property tax reform. Granted this bill may not be sustainable, granted it is not the sweeping change really needed to bring property taxes down in the future or adequately fund schools districts, but it is a start. The legislature is taking a long time to learn to walk but at least it is mobile at last.
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Monday, February 05, 2007

Property Tax Relief Legislation in Senate Review

The tax relief bill is one step closer to reality. It comes before the State Senate (S20) today. The relief effort will only be as successful as the local governments will allow it to be. The credit program allows homeowners whose earnings fall between $100,000 and $250,000 to receive a credit on their property tax bill. While the cap placed on the amount local government may increase taxes in a given year, and the Senate allotting $2.05 billion to the program at least the first year of the program may work out well for homeowners. Since the four percent cap on increases in local levies has exceptions, how long the amount allotted to the program will last is anybody’s guess. Ideally, the amount homeowners receive should remain at 20 percent no matter what local governments do -- whether that is indeed the case remains to be seen. Still it is a beginning.
Read Dunstan McNichol's story

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Thursday, February 01, 2007

County Superintendent Bill in Review


There is a bill working its way through the New Jersey Senate (S19), sponsored by Senator Bob Smith (D), which will create a county level school superintendent. The plan was to create a position to hold local school districts accountable for their spending and thereby lower property taxes. Basically this position would approve or cut budgets. While the idea of a superintendent with the ability to cut budgets is a good one the bill working it way through Senate readings includes a process where local districts can appeal the decision of the superintendent which could very easily render the office of the county superintendent ineffective. Why was the process included in the bill you might ask? It seems some Senators are involved in local government and they did not want the superintendent to have the very power the position needs to effectively bring down New Jersey property taxes. Folks, it looks like the superintendent will have a stick, maybe even a big stick to encourage local governments to work together but it also looks like the Senate bill gives local governments a saw.
Read The Times of Trenton article

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Wednesday, January 31, 2007

Tip of the Day: Moving Made Easier

Moving is no picnic, whether from an apartment to a house or a one house to another, but here are a few suggestions that may make the job easier.

Make a list of the people and companies who will need change of address notices. Sit down and make as complete a list as possible. Don’t forget to add that investment company from whom you only receive quarterly reports, insurance companies, any magazine subscriptions, and the IRS.

If you are moving out of state don’t forget to sign the necessary forms for your health care providers to transfer your records. It is a good idea to get a copy of all prescribed drugs and even eyeglass and contact lens prescriptions.

Transfer the content of your safety deposit box to the new bank location in advance and transfer funds to the new account if you must move your account from on bank to another rather than just new branch. If you have direct deposit paycheck it will be important to setup the new bank account well before the move depending on your company’s requirements.

While numbering boxes and writing on the boxes the room to which they belong will help, assigning priority to boxes also helps. “Open me first” boxes should hold items you may need as soon as you reach the new location like bathroom items, light bulbs, bedding, night clothes, work clothes, or school clothes.

If you are changing cities, a good real estate professional can put you in touch with an agent in your new community who will help you get settled – even if you do not plan to buy a home right away.


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Thursday, January 25, 2007

Making the Sale

It is about pricing. Buying and selling houses is 80% about pricing. There is nothing magic to it. Price the property correctly for the market and it sells, do not price it properly and it will sit on the market. The other 20% is about timing. It is a buyers market and timing is a bit tricky, but if the price is correct the property will sell.
The problem is that sellers want the price their neighbor got for a property sold during the height of the seller’s market. That’s not going to happen, it is a buyer’s market now and buyers are taking their time and shopping around before making offers.
Sellers also want to get a specific amount from the sale of their home, even though the market may not bear that price. There are no bidding wars to help drive up prices – to help today’s seller get exorbitant prices. There is enough inventory on the market for buyers to just look elsewhere and that is exactly what they are doing.
Sellers have to price to sell rather than price with emotions. It is difficult to look objectively at the place where you have spent years living life. Where each room holds memories of people and past events; but, objectivity is exactly what is needed to price a home correctly. Being objective about houses is a realtor’s day job. The realtor works to get the seller realistic returns on their investment. In a buyer’s market that can be more challenging but meeting that challenge is why I love this job!
Read the article: Home market not so comfy

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Wednesday, January 24, 2007

Around Town: Property Tax News

Lawrence township council has proposed a 3 cent increase in property taxes to 68-cent/$100 which would increase the average homeowner’s bill about $49. They will discuss the proposed budget “in detail” on February 6.
Read the story

In state government, the effort to reform property taxes has senate democrats seeing the reform effort as a waste.
"By the time all is said and done, (the proposals have) all been watered down so much that there's really nothing there. They're nothing more than shells," said Sen. Shirley Turner, D-Lawrence, Mercer County.
After seeing much of his work on reforms whittled down by other lawmakers and interest groups, Sen. Robert Smith, D-Piscataway, compared his efforts to those of Sisyphus, who in Greek mythology was doomed to forever roll a boulder up a hill, only to see it roll back down.
Smith said, "I went into this believing anything was possible and anything was on the table, but you can't get past those interest groups."

Well folks, it looks like business as usual in the state legislature – something potentially good shot down in its infancy. I cannot say I am surprised but I will admit to hoping for better.
Read the story

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Monday, January 22, 2007

New Jersey Educators Weigh In


Well the New Jersey Education Association has weighed in on Governor Corzine’s property tax reform proposal over the weekend. Joyce Powell wrote the ad for the Association. She pretty much says what we all know – that “credits and caps” of Governor Corzine has a fatal flaw. I think I will just quote her here
The core of Gov. Corzine’s plan is a combination that he calls “credits and caps:” significant property tax credits for most residents, combined with strong caps on future property tax increases. It is an appealing offer, but with a fatal flaw. While it addresses the issue of funding for education, it does nothing to deal with the cost of providing education.
… New Jersey arrived at this crisis understand that property taxes are a symptom, not the root cause of the problem. For years, the state has failed to provide adequate funding to school districts to raise the necessary funds through the only means available to them: property taxes.

Ms Powell has a point. Where is the money for schools going to come from if not the state or property taxes? Since it is true in the 1990’s Gov.Whitman decreased the amount of money available to the state with her decrease in income tax, then it really is no surprise that municipalities had increase in property taxes to make up the difference for the money no longer received from the state or have schools suffer. Duh! It is not rocket science here. So what’s the legislature going to do? Probably the quick fix of “credits and caps” but not even make a stab at the root cause of property taxes and so we will have this conversation again in a few years.


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