I don't own a home at the moment, in JC, NYC, or anywhere else. I got out in the nick of time thanks to some spendy neighbors (the down side of condo owning is other people get to outvote you on how you spend your money). That's because I've been 1) too busy to look for a new place 2) too comfortable where I live 3) too lazy to seriously hunt down an investment property (possibly a foreclosure) and 4) worried that the "other shoe will drop" on property taxes.
The JC council has recently cast a resounding boom as that other shoe crashed down. And I am watching carefully as their actions will directly affect whether I buy here, continue as-is, or head back to Manhattan. Or (gasp) even Brooklyn or Astoria.
They will revalue properties citywide.
What does that mean?
It means that the economy has crashed, state budgets have been gutted, and local budgets are anemic. And the money has to come from somewhere. And I cannot deny that I benefited greatly from the last revaluation having been in the prehistoric era of 1988. My last condo had taxes of something like a dollar and a carton of orange juice a month. I was lucky to get out of that before it was reassessed after some capital improvements went on record.
So what's going to happen after properties are all revalued at today's market value?
Some people will likely come out ahead. If their properties are valued at 2005 levels, their taxes might go down. Some people will see no change, including those with abated properties. For some, rates will skyrocket and that's gonna hurt. I expect it will be passed on to renters, at which point a lot of folks (maybe me) will head back to the City since there will not be any financial benefit to being here.
Then there's the old-timers and the people barely making it.
In 1988, I clearly remember things getting really really bad. I didn't understand it at the time. What I understood was that my landlady was freaking out and eventually was foreclosed on. And I remember For Sale signs across what seemed like half the city.
And property then became VERY VERY cheap. If the Other Marie and I had understood what we were doing, we'd probably have bought the 3-family brick house on Mercer Street that we lived in for a mere $170,000. (Though it all worked out as we both went and bought cheap on Avenue B and learned pretty quickly what we were doing.) This is when I learned that this nonsense about "real estate never goes down" was a sign that someone was either very foolish or trying to snow you into buying something at an inflated price. Real estate goes down. And up. And all over the damn place.
I'm too tired to chase real estate seriously at the moment, so it doesn't really affect my actions all that much. But real estate can also be a spectator sport, so I am watching closely to see if history repeats itself or not.