How is everyone doing it? (property taxes, living, property)

[Hobokenkitchen]

I agree with Rutherford - it's a bout working your way up the property ladder. In Hoboken an average two bed condo is going to cost $600,000 plus. The average price of a one bedroom condo is over $400,000.

We bought our first about 6 years ago fro $250,000 with 10% down. Then moved up the property ladder from there. We've moved 5 times in 5 years though, so it's not everyone's idea of a good time.
Now we can afford $800,000 - $1,100,000 without stretching. It's not because we have huge incomes, it's because we started small and with a lot of sweat equity worked our way up the property ladder at a time it was going through the roof. Not sure it would work now though in the current market.

[1lallen1]

Originally Posted by stmaarten

Why are property taxes so high in New Jersey? BECAUSE THE CROOKED POLITICIANS IN NEW JERSEY ARE FLEECING THE GOOD PEOPLE OF THAT GREAT STATE!!!
We left the state of New Jersey, not because we hated living there, but we were SICK AND TIRED of being cheated by that state's politicians!
Jersey $uck$ not because of it's location, but because the politicians there are thieves!
Why is it that other states are able to manage on much less property tax income? It's a damn tradgedy!

Agreed. We felt forced to leave and did so in August. Now we are in Houston, TX in a much better financial situation, but I miss NJ.

[kng863]

To the wealthy folks of NJ, you would be no where if the FEDERAL RESERVE didn't print money. Keep in mind people in NJ such as teachers, police, garbage men and firemen think that 70K/salary is a lot of money and a 300K home is a reasonable price for a home. Now that the same homes are suddenly worth 500k. Where did the extra 200k come from? You haven't created any wealth, the bank just created it out of thin air allowing these high appraisals. You suddenly just raise the cost of living for everyone else around you. If you're wealthy and dont understand this, then why since 1910, the value of the dollar has fallen? The dollar is now worth 4cents as it did back in 1910. Meanwhile, wages have steadily moved up. If you live in NJ paying 23K in prop taxes and making say a +$1mill+ a year closing deals, where did the money come from? It had to come from the bank allowing such 1% borrowing rates this early decade. I bet the rich wouldn't have such a successful business if we switched back to the gold standard. A 100k income in new jersey isn't uncommon anymore considering the cost of living. We fight INFLATION with MORE INFLATION until the middle class is forced to move to more affordable areas. People building McMansions next to middle-class homes essentially INFLATE their neighbor out of their home. A lot of seniors living on FIX incomes and CDs didn't predict the Federal Reserve would have interest rates at 1% thus inflating them out of their homes with higher property taxes.

[CuCullin]

Originally Posted by kng863

People building McMansions next to middle-class homes essentially INFLATE their neighbor out of their home. A lot of seniors living on FIX incomes and CDs didn't predict the Federal Reserve would have interest rates at 1% thus inflating them out of their homes with higher property taxes.

kng863, meet inflation. Inflation, meet kng863.

Inflation is the reality. Value <> printed money, so no, every time a house increases in value, the federal government does not "print money". And if you want to blame someone for what happens to the USD due to inflation, look to the federal government for going off the gold-backed standard.

Have a great day.

[Spincycle]

Originally Posted by BobKovacs

That's why the mortgage companies have tightened the lending requirements again, and you're starting to see "normal" loans and interest rates again.

And perhaps "normal" purchase prices [and rents again too]?

Originally Posted by BobKovacs

For the people who "sorta" can afford them, they spend an excessive percentage of their net incomes on their mortgage payments and property taxes, and have very little money left over for savings, 401k's, or anything else. It's truly a sad state of affairs that many people in this area have put themselves in.

It's truly a sad state of affairs that many people in this area have been put into by the bankers/brokers/sellers/politicans/media at large.

[Blondie621]

Moved to Florida 3 years ago from Bergen County. My fiance bought this house on almost an acre...the property looks like a park...beautiful! Is 2,500 square ft. is all upgraded, pond etc outdoors. The price $269.000,00
This home in Jersey with the property would be around !750,000.000
Taxes here are a bit high at $2,100.00 a year. Way cheaper to live here than Jersey.....am 40 min. from Orlando and 40 min from Daytona Beach and 23 miles to New Smyrna Beach. I would never got back to Jersey except to visit my family and friends!

[wileynj]

Originally Posted by nsa162

I am often amazed at all these big houses that people in NJ are building and buying. If you are one of these people, can i ask what exactly you do for a living to be able to afford a 500k house.Maybe i will get into that field

Self employed contractor : ) Seems to be the career choice out in my neck of the woods. But then again..same homes out here would be double to triple the cost if they were in the northeast portion of Jersey.

[ez2do4now]

From my observations, and I fall into category (2), these are the categories of people who can afford 500k+ homes:
(1) High income earners, ie: self contractors, business owners, highly compensated Wall St employees
(2) Appreciation of existing home and subsequent trade up to more expensive home
(3) Excessive debt financing

Two years ago I purchased a new construction at a price of $700k with yearly taxes of $13k. I was fortunate to have purchased a house in NYC many years ago and benefited from the price increase to afford my new house. Primary drivers for my move were: bigger home (for those who know, NYC housing is small), better schools, more space. My neighbors are either highly compensated Wall St types (traders, investment bankers), business owners (import/export and the like), and some but not many modest income earners who moved up the housing ladder.

A friend of mine and his wife (Wall St $$) live in Bergen where homes go for $1mil + and all his neighbors are business owners. Other friends live in homes valued at $500k+ because they purchased many years ago. Another friend recently purchased a house in Manalapan for almost $600k but he saved for at least 12 yrs.

It is doable but one has to be very fortunate - whether it be in timing, work, etc. I totally agree with a prior post that kids have to start early in saving for their future. With the high cost in real estate and college tuition, it is very difficult to afford a house.

[Scott99999]

I've actually had this same question as the OP.

My wife and I have been looking for a house in the $500-$600k range as working professionals in our 30s. After speaking with a loan officer, we'd be looking at $3500-$4500 in monthly housing payments (the lower number is after income tax adjustments). That's NOT considering heating oil, maintenance, etc...

Our down payment is coming from steady savings for a few years and wedding money.

That $4500 would take up most of one income after taxes, so we'd both have to keep working to pay all of our other expenses. We'd still be able to save money, BUT it's pretty scary to consider what might happen if one of us loses a job, has to take a pay cut, or gets sick. We both have good incomes for our age and have multiple income sources, so I have no idea how "most" people are doing it.

Obviously, from foreclosures, they're not.

In terms of down payments - many of our friends either lived home for a few years, or took jobs in which their housing was subsidized (allowing them to save), or went into finance, law, etc... Others had family help in buying their first house, then rolled over the profit into their subsequent houses. Still others moved out of the area. One or two hit the market at exactly the right time (buying an apartment in Manhattan for $150k in 2000). Some actually got "bought out" by the landlord when their apartment turned condo. One or two others used an inheritance.


I also agree with kng863 on the overall thrust of his post. I think that the real estate market turned into a gold rush / pyramid scheme for the last 10 years.

- Sellers have an incentive to keep prices high
- Real estate agents and loan officers work on commission
- Banks sell debt and charge higher rates to risky consumers
- The "price" of a home isn't based on the buyers ability to pay - it's a combination of what buyers can borrow and risk.

Obviously, banks engaged in risky loans, allowing buyers to achieve ownership of homes they couldn't afford. Everybody took the money and ran, but now it's collapsing. No one on the selling side wants to allow the value of their product to slide, but with all of these financial upsets and corrections, prices will be forced to move downwards.

[FromDaSack]

HAH thats why NJ is one of the leading states of ppl who rent.