When Did The Northern NJ Housing Bubble Begin?

[theflight]

Forgive me for my rant, but this is my main argument for leaving the state that i loved and was born and raised in. I may sound like a pessimist now, but understand that I have recently been awakened to the reality of living in NJ.

Coming from a working class family who saw their American dream realized, I am probably the first in my family to NOT do better than the last generation. Why? I made the dubious mistake by not leaving this state after college. In fact, just yesterday in The Record (front page) an article about the manufacturing vs. service industry in NJ. They compared 1969 to present and it is sad, but manufacturing has pretty much disappeared. Why? Corruption in govt....resulting High taxes just to give some reasons. Also, there are no incentives for business owners, which is why many, if not all, left the state to more reasonable overhead costs. Blue Collar has been replaced by white collar and there is no going back. This happed in the 70s as well...they called it the "the white flight", but it was really the middle class that left...NJ is on its way to being not only the first state to be Completely developed, but also being the first "banana republic" in the U.S. NJ is housing the privileged wealthy and the unfortunately poor. The middle class, (someone asking what is middle class is evidence of the trend) is squeezed out because you need to make 150,000 a year to be able to survive and not go into debt in nj. Our insurance rates are double; our health insurance is double, cost of living...electric...gas...etc... Just multiply it. you can't afford to live in NJ as a blue collar making 50K a year when your taxes on your small 3br, 2ba cape is about 9,000 a year and escalating-as every nj-ean knows...they never go down. If you are paying less than 7k a year in nj, you have a postage stamp.

So, do i think it can be restored? No. Unless we can 1. get rid of present reps and senators replacing them with people who care about giving tax money back. 2. give incentives to business owners to restore manufacturing and industry back to nj and 3. Reduce property taxes by illuminating duplication of services in municipalities and state employees who get paid too well and retire with ridiculous pensions that we simply cannot afford, yet continue to promise. In NJ you can hardly drive down a road w/out paying for it and if you aren’t paying a toll and your taxes are manageable, don’t worry, because there is almost a guarantee that a cop will pull you over ticketing you for speeding or talking on a cell phone and that should make up for any loss revenue—being that you can’t drive ten minutes w/out passing a cop shooting radar. All of these “necessary evils” that the state has convinced us that they are, will never seize to exist, so if you want blue collar, you have to go to a red state. It will be interesting to hear the feedback on this one.

[theflight]

Home prices were escalating before 9/11 and if you look at the maps refered to in the Record, Manufacturing increasingly left every year since the late 60s...ford motor plant etc. Teacher and cops are only part of the reason why our taxes are high. The reason there was a bubble was the same as the reason there was a tech bubble and there will be a bond bubble as well. Wall Street was trading sub-prim mortgage as AAA Bonds bundled so people who bought, didn't truly understand what they were buying. All nothing to do with the devastating tragedy, but all to do with back door deals that caught up with us and now we are paying for it.

Originally Posted by CuCullin

I can't believe noone pointed out that stevemorse is right.

Because its true.

Sure, housing was on the rise in the late 90's... the reason was the internet stocks bubble. People made massive chunks of change investing in an unfounded business model, with startups throwing money around left and right, with VC's selling off their peaking shares with a grin. The bubble bursts... and....

Whats the safest place to put your money? Well, the rest of the stock market was still doing ok, after a short downturn it was realized that them thar intarwebs don't manufacture money like some magical pig pooping it out. So while some invested in real estate, many continued banking on the long term benefits of stocks.

Then comes 9/11/01. The market was in a frenzy, people were afraid, fear motivated sale of stocks, which then drove prices down further, and again, the value of the stock market was in question - this time, the entire market. Once again, people looked elsewhere for investment opportunities, and they looked to real estate. A rare combination of a fairly low interest rate and a driven real estate buyer looking for investment opportunities caused the market to flare up, contractors turned into builders, day trading folks turned into professional home flippers. It was seen that perception could drive up value, and bathrooms and kitchens made for some of the best ROI in a home remodel - the millwork, tile, big box home supply stores, etc businesses soared with people paying for or performing their own upgrades, and everyone who made a small chunk went for a larger chunk of change, a bigger fixer upper, a larger piece of property.

Soon it was realized that new homes were easily built, and could cost drastically less. Moving in on a fearful market, where potential buyers firmly believe they need to get in now or lose out forever, builders found it far cheaper to build entire communities in one shot, one gigantic job site, progressively building homes to maximize the potential of their work force. Others realized NYC's market will never really go down, and young professionals needed a place to go... and suburban communities didn't fit their fast-paced lifestyle. In Hoboken, Jersey City, etc., reno's were the name of the game, and apartments turning into condos.

Its easy to see how all the mess got started, and pretty worrying at the same time. Trends like this happen all the time, the most unique part of this is how everything worked together to create our current state, no single market is 100% at fault here.