Title Wise
The New Jersey Real Estate News You Can Use
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Greetings!
The COVID-19 pandemic has not only exacted a cost in lives, in businesses closings, and in overall mobility, it is now going to cost taxpayers in the amount that they pay in real estate taxes. Monmouth County, as I am sure other counties in New Jersey, are suffering from revenue shortfalls, which will have to be made up in the usual way: tax increases. Other rising costs affecting housing prices are being felt in the construction industry, where prices have hit all-time highs, translating into home costs jumping by $16,000 on average.
Please feel free to email me at ralph@counsellorstitle.com if you have any questions or would like to follow up on any of this edition's articles.
Ralph Aponte
732.914.1400
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Monmouth County Taxes to Increase
Monmouth County has taken a bit of a hit with respect to the revenues it was projecting to receive during 2020. That will have to be made up somewhere, and somewhere is into the pocketbooks of taxpayers. Surprise, surprise?
What exactly happened in 2020?
Well, the shortfall is estimated to be approximately $16.5 million.
Some of the increases will include the addition of $2.1 million for employees’ cost-of-living raises, which were required under employment contracts.
In addition, Monmouth County suffered a decrease of about $2.2 million in its total revenues due to the halt in the sale of foreclosures, which have been stalled due to the pandemic.
The area where the county exercised some self-control was in the freeze on hiring for positions except for those positions that were health emergency related.
The county attempted to act judiciously, anticipating there would be just such a shortfall. But the problem is that New Jersey currently is in the nation’s number one spot for property taxes. This could be problematic moving forward, as residents take into consideration the cost-of-living factor of living in New York City. In addition, New York City’s pandemic paranoia has closed many of those attractions that were once considered to be assets to local New Jersey residents.
According to some sources, Monmouth County property owners face a $6.1 million tax increase due to directly COVID-related troubles.
The problem with the tax increases is that they are based upon property values, most of which throughout the state have climbed 25% from 2019. The problem with the statistic is that the property appreciation values do not translate into hard dollars and cents into the residents' pockets unless they decide to sell their homes. And that very well may prove to be a trigger or incentive for residents to take the appreciation in their properties and move to areas that have a lower cost-of-living. Time will tell what taxes are due.
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The Squeeze: Lumber, Inventory & Rates
Over the last few years lumber prices have skyrocketed as much as 300%. Dating back to January 2017, housing starts for single-family homes were up strongly by 7%. Then all of a sudden COVID-19 hit and between May and July of 2020, housing starts increased by 17% nationwide.
The cost of housing is rising not only because of the historic shortage of inventory, but also due to the record low mortgage rates compounded by pent-up buyer demand, especially from first-time buyers.
Typically in the winter, lumber prices don't increase, but as of February 12th, 2021, lumber prices had increased to a new all-time high of $979 per thousand board feet.
Compare these prices to the prices back in March of 2018, when lumber jumped to another new high of over $520 per thousand board feet. This was considered new territory since they had climbed from $420 and $460 per thousand board feet back in January of 2018.
So what is the bottom-line impact on the market? The increase in prices for lumber, compounded by the shortage of inventory, have contributed to the price increase in a single-family home by $16,000. In addition to that, the shortage of skilled labor and other materials has produced, as of the summer of 2020, an increase in new construction jobs by up 24,000.
A survey conducted by the National Multifamily Housing Council found that 82% of those surveyed experienced a shortage of materials and price increases, which were creating more expensive housing.
The pandemic continues to create havoc throughout the construction industry, as reported by the National Association of Homebuilders, which reported that since mid-April of 2020 lumber prices have increased by 130%.
So what else is producing the increase in prices?
1. Dramatically increased demand
2. Restricted supply
3. Growth in the gross domestic product of all major economic sectors
4. Housing shortages
In addition to the higher lumber costs, contractors are also having to pass on the increase in costs to ship the lumber, which is now up over 24% year-over-year.
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New Jersey Sees Surge in the Number of First-Time Buyers
First-time home buyers represent a growing share of the home buying population, which is a trend that only accelerated in 2020. According to CoreLogic Fraud Consortium Loan Application data, the percentage of first-time buyers surged to 39% in 2020, up from 30% in 2016.
Homeowners, and by extension real estate agents, are facing incredible acceleration in finding the dream home. Coupled with rising home prices across the United States and a newly virtualized homebuying experience, prospective homeowners and their agents are grappling with new challenges.
Obviously, the COVID-19 Pandemic produced a demand for agents to invest heavily in the virtual platforms, which played right into the Millennial Culture's proclivity for digital.
The CoreLogic blog stated, "Interestingly, 10 out of the 20 counties with the highest share of first-time buyers are in the New York Metropolitan area. In fact, the top 4 counties are in New York metro area and each has at least two-thirds of mortgage applicants being first time buyers."
What is even more interesting, is that this is the first time I remember CoreLogic recognizing the New York Metro region. Something is up.
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Get This Month's Free Rental Planner Spreadsheet |
Rental Income Planner in Excel Spreadsheet
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A.S.A.P. Attorney Settlement Assistance Program
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Our real estate secretarial services are able to assist you in every aspect of the sale, purchase, refinance or loan closing process. We will directly communicate with all the parties involved in the transaction and coordinate and obtain all the items necessary to bring the matter to closing.
Our ASAP services can be individually customized to fit your needs. These services include:
- Documentation Preparation
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Our Commitment to Excellence |
Counsellors Title Agency wants to thank you for the opportunity to work with you and your clients to grow your business. Please feel free to click the link above or here to leave us a review on Google. We appreciate your business. |
Sales: Leading NJ title insurance agency seeks experienced licensed salespersons to help expand its market share throughout the entire state. Benefits include health insurance, 401k with an employer match, flexible spending account, expense account, & marketing support. Send resumes by fax: 732-914-8898 or ralph@counsellorstitle.com
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Free Online Title Insurance Calculator |
Counsellors Title Agency announced its updated Title Calculator for New Jersey home purchases & refinances at: Title Calculator
Loan officers, real estate agents and home buyers can find out how much title insurance will cost for purchases made in New Jersey.
Easy-To-Use Functionality
This online tool includes many of the endorsements involved in calculating the cost of a title policy in New Jersey. CTA's Title Calculator is a great tool for real estate salespersons, loan officers, attorneys and those who are buying or refinancing their home.
It calculates the cost of title insurance based upon the purchase price of the home, the loan amount, and the various endorsements that can accompany the loan. The calculator provides the user the scalability of selecting the various endorsements involved in the transaction.
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Handy Guide to Real Estate Sources |
Here are some of the most widely used governmental websites for the real estate industry.
I look forward to being of service to you, providing you with outstanding real-time information and some humor to make doing business a pleasure.
Sincerely,
Ralph
Ralph Aponte
Counsellors Title
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Counsellors Title Agency, Inc. specializes in providing title insurance, title search services and loan closing services serving attorneys, Realtors, banks and various mortgage companies throughout the State of New Jersey. CTA offers full search and insurance capabilities within all 21 counties of New Jersey for commercial, residential and new construction purchases in our Toms River, Freehold, Chatham, and Union locations.
CTA is equipped with the latest digital technologies to ensure a complete and timely transaction.
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Mr. Ralph Aponte
Our Office: 504 Hooper Avenue,
Toms River, NJ 08753
Phone Number: (732) 914-1400
Fax: 732-914-8898
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