Buying a house in NJ, how much to spend?

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JHU ALmuni
Posts: 255
Joined: Tue Jan 20, 2015 12:40 pm

Buying a house in NJ, how much to spend?

Post by JHU ALmuni »

Hello,

I just started looking to buy a house in NJ and wondering how much to spend, below some information that might help:

1. Married with two young kids.
2. Household income: $220K
3. Total retirement savings: $300K
4. Age: 37 and 33 (kids 9 and 11)
5. Current rent: $2,600

Ideally I'd like to stay under $500K not sure yet what kind of house to expect for this budget. I'm only concerned because retirement savings is not where I want it to be (we just started making 220K a year just recently) so I would like to increase it to $700K+.

Property Taxe is high in NJ, that's another discouraging factor.

Reasons why I want to buy:
1. Build equity
2. Take advantage of lower mortgage rates
3. Have extra room since kids doing school remote and we both working from home at the moment.

Not rushing to buy but at the same time I feel my rent is high (NYC area).

Your thoughts?
njdealguy
Posts: 172
Joined: Wed Jul 26, 2017 8:15 am

Re: Buying a house in NJ, how much to spend?

Post by njdealguy »

Your point #3, "3. Have extra room since kids doing school remote and we both working from home at the moment." is temporary and will probably go away in the next 6 months to a year or so, and I would think a priority for you would also to have a good school district. Assuming after an eventual reopening of your offices would also probably not want the commute to be too much either.

500k in most areas with decent school districts and proximity to NYC (still talking 1 hour to 90 minute commutes each way) will get you a townhome or older single family home with 3 bedrooms and at most 1600 square feet. Property taxes and homeowners insurance (which in my town goes up by 4% every year) would likely cost between 10k and 12k per year so with a 15 year loan assuming 20% down payment would likely have a $3500 to $3800 per month escrowed mortgage payment which is about 20% of your gross pay (I think thats reasonable). With savings and retirement goals I would try to find the best home possible while not exceeding your budget.
KlangFool
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Joined: Sat Oct 11, 2008 12:35 pm

Re: Buying a house in NJ, how much to spend?

Post by KlangFool »

OP,


Do you plan to pay for the kids' college educations?


KlangFool
eugenem
Posts: 29
Joined: Mon Nov 30, 2015 10:54 am
Location: NJ

Re: Buying a house in NJ, how much to spend?

Post by eugenem »

Since you mention NYC rent in your post, I assume you are referring to northern NJ. Do you have NYC commutes to consider? What's the max length commute you are willing to make?

If you are considering Morris, Somerset, Hunterdon counties, your real estate browsing will be competing against other NYC folks looking at homes in the Jersey suburbs. Houses in my area (Morristown, Morris Plains, Morris Township) are selling within a week with multiple offers. Under $500K would mean 3 bedroom starter single family/townhouse, maybe 1500-1800 square feet. Plan on some renovations being needed at this price range. Depending on the town, $6K-$10K annual property tax.

Morristown area means a 60-90 minute commute into midtown NYC on a good day (when NJ Transit cooperates). Home prices drop (and houses get larger) as you go west and away from NYC, but after a certain point, residents aren't commuting to NYC.
lakpr
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Re: Buying a house in NJ, how much to spend?

Post by lakpr »

I live in Princeton area, which has a direct NJ Transit train to NYC. Express trains in the morning will take you, give or take a couple of minutes, 1 hour to NYC during peak travel times (6 am to 8:30 am in the morning, 4:30 pm through 6:30 pm at NYC for return trains). For $500k it is possible to buy a decent 3 bedroom home in our town, although it would be a 40 to 60 year old home.

Not a bad place to live, schools are excellent, and relatively speaking, great commute time to NYC.

https://www.zillow.com/princeton-nj/hou ... 7%7D%7D%7D
KlangFool
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Re: Buying a house in NJ, how much to spend?

Post by KlangFool »

JHU ALmuni wrote: Mon Nov 23, 2020 4:30 pm
Property Taxe is high in NJ, that's another discouraging factor.

Reasons why I want to buy:
1. Build equity
JHU ALmuni,

In general, folks buy a house to reduce or stabilize their housing expense. How does this work in a state like NJ with a high property tax? Even if the house is paid off, you are still on the hook for the high property tax.


KlangFool
njdealguy
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Re: Buying a house in NJ, how much to spend?

Post by njdealguy »

KlangFool wrote: Mon Nov 23, 2020 5:59 pm
JHU ALmuni wrote: Mon Nov 23, 2020 4:30 pm
Property Taxe is high in NJ, that's another discouraging factor.

Reasons why I want to buy:
1. Build equity
JHU ALmuni,

In general, folks buy a house to reduce or stabilize their housing expense. How does this work in a state like NJ with a high property tax? Even if the house is paid off, you are still on the hook for the high property tax.


KlangFool
Because even when renting your still implicitly paying the property taxes and it is still always going to be "cheaper" then renting a equivalent place even if there is no loan. Same principal everywhere I'd think even when property taxes are low.

And tradeoffs are necessary just to live in this high cost state, only other option if able to is to leave for elsewhere with lower cost of living.
retiringwhen
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Location: New Jersey, USA

Re: Buying a house in NJ, how much to spend?

Post by retiringwhen »

JHU ALmuni wrote: Mon Nov 23, 2020 4:30 pm Property Taxe is high in NJ, that's another discouraging factor.

Reasons why I want to buy:
1. Build equity
2. Take advantage of lower mortgage rates
3. Have extra room since kids doing school remote and we both working from home at the moment.

Not rushing to buy but at the same time I feel my rent is high (NYC area).

Your thoughts?
Where do you plan on buying? Counties/municipalities? $500K buys very different houses based on the locale.

Rent of $2,600 is actually pretty attractive considering that property taxes alone can run nearly $1,000/mo. for a $500K house. You probably will get little or no Federal tax benefit from those payments due to the SALT limitations.

I am not bullish on long-term equity improvement for housing in NJ outside of the very close commuter zip codes. In my personal experience, the nominal value of my home is only above water again this year after purchasing in 2001! I calculate a 40% real loss on my house in the last 19 years. I would have been much better off putting my monthly "equity" contribution in a nominal interest bearing savings account! I live in Hunterdon County with a commutable train line, but somewhat remote (on the border of Somerset County)

The reasons for that value loss are two-fold. One prices were very high and the tax carrying costs for homes in NJ is nearly unbearable. I would suspect that we are at a high water mark for prices again and there is no tax relief in sight.

Next, lower interest rates = higher house prices. If you lock in a low rate, you will not see much housing appreciation if rates increase. The only win is if you buy a house with a low price due HIGH interest rates and then refinance as rates go down. That is an unlikely scenario in the next decade. (My first home purchase in the 1990s did see that happen and we got a 50% return in 9 years as rates went from 10% to 6% on mortgages!)

I don't see buy for equity or low interest rates as a plus in NJ these days.

On a purely financial perspective it may not pay for you buy, even long-term. #3 is really only reason to buy if you are willing to pay for the benefit...

Just to put things in perspective. I own a $500-$550K valued home and pay $14K in property taxes a year. I carry a $200K 15 years mortgage and my monthly payment (escrow for taxes and insurance) is $2,700. I would expect that my additional monthly costs for my home that are not normally born by a renter to be between $300-500 and that does not include the occasional major project like my current $10K project to refurbish a dangerously dilapidated deck.

Be realistic, home ownership never saves money, but it can buy peace of mind in different ways. I would not trade the enjoyment my kids had with their freedom and my wife's freedom to paint/decorate and update that house to her tastes for cash in the bank. It was a good investment.
njdealguy
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Re: Buying a house in NJ, how much to spend?

Post by njdealguy »

retiringwhen wrote: Mon Nov 23, 2020 6:16 pm
JHU ALmuni wrote: Mon Nov 23, 2020 4:30 pm Property Taxe is high in NJ, that's another discouraging factor.

Reasons why I want to buy:
1. Build equity
2. Take advantage of lower mortgage rates
3. Have extra room since kids doing school remote and we both working from home at the moment.

Not rushing to buy but at the same time I feel my rent is high (NYC area).

Your thoughts?
Where do you plan on buying? Counties/municipalities? $500K buys very different houses based on the locale.

Rent of $2,600 is actually pretty attractive considering that property taxes alone can run nearly $1,000/mo. for a $500K house. You probably will get little or no Federal tax benefit from those payments due to the SALT limitations.

I am not bullish on long-term equity improvement for housing in NJ outside of the very close commuter zip codes. In my personal experience, the nominal value of my home is only above water again this year after purchasing in 2001! I calculate a 40% real loss on my house in the last 19 years. I would have been much better off putting my monthly "equity" contribution in a nominal interest bearing savings account! I live in Hunterdon County with a commutable train line, but somewhat remote (on the border of Somerset County)

The reasons for that value loss are two-fold. One prices were very high and the tax carrying costs for homes in NJ is nearly unbearable. I would suspect that we are at a high water mark for prices again and there is no tax relief in sight.

Next, lower interest rates = higher house prices. If you lock in a low rate, you will not see much housing appreciation if rates increase. The only win is if you buy a house with a low price due HIGH interest rates and then refinance as rates go down. That is an unlikely scenario in the next decade. (My first home purchase in the 1990s did see that happen and we got a 50% return in 9 years as rates went from 10% to 6% on mortgages!)

I don't see buy for equity or low interest rates as a plus in NJ these days.

On a purely financial perspective it may not pay for you buy, even long-term. #3 is really only reason to buy if you are willing to pay for the benefit...

Just to put things in perspective. I own a $500-$550K valued home and pay $14K in property taxes a year. I carry a $200K 15 years mortgage and my monthly payment (escrow for taxes and insurance) is $2,700. I would expect that my additional monthly costs for my home that are not normally born by a renter to be between $300-500 and that does not include the occasional major project like my current $10K project to refurbish a dangerously dilapidated deck.

Be realistic, home ownership never saves money, but it can buy peace of mind in different ways. I would not trade the enjoyment my kids had with their freedom and my wife's freedom to paint/decorate and update that house to her tastes for cash in the bank. It was a good investment.
Except the current $2600 rent for OP might not be for a home worth 500k since as stated is missing "extra room since kids doing school remote and we both working from home at the moment" so is looking for an upgrade in space. I do agree that home appreciation in many parts of this state hasn't been great. My home purchased 12 years ago in the Edison area for 650k is only worth maybe 750 or 770k max now which is just an absymal sub 2% annual appreciation rate.
retiringwhen
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Re: Buying a house in NJ, how much to spend?

Post by retiringwhen »

njdealguy wrote: Mon Nov 23, 2020 6:30 pm Except the current $2600 rent for OP might not be for a home worth 500k since as stated is missing "extra room since kids doing school remote and we both working from home at the moment" so is looking for an upgrade in space. I do agree that home appreciation in many parts of this state hasn't been great. My home purchased 12 years ago in the Edison area for 650k is only worth maybe 750 or 770k max now which is just an absymal sub 2% annual appreciation rate.
I agree, about apples vs. oranges. But, with an already low savings for retirement adding as much $2,000/mo. to their home expenses needs to be considered if they can afford it.

As I said, I valued that investment for my family, but not from an investment perspective. I would have been much better of staying in my 1st 1,800 sq. foot house or a rental townhouse if it was about the money.
humblecoder
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Re: Buying a house in NJ, how much to spend?

Post by humblecoder »

I am making the assumption that you are looking at buying in North/Central NJ since you mention NYC. I lived in that part of the country for many years until I eventually got fed up and moved to a lower cost of living area (more on that later :happy).

Anyway, housing prices vary from town to town, but they are basically correlated with two things:
1. Quality of the schools
2. Commuting proximity to New York City

We lived in a town that had better than average schools and a commute to NYC of about an hour door to door (we were on a major train line and several bus routes). In our town, $500K would get you either a starter home or a step-up from starter but requiring repairs/updates. Either way, you are probably getting an older home (at least 40 years old). If you were to move further away from NYC, you might be able to stretch your real estate dollar further, but your NYC commute would be longer.

As you probably know, property taxes are a huge factor. A $500K in our town comes with a property tax bill of around $12K-$15K. Surrounding towns are even higher. With recent tax changes, much of that is no longer deductible, which is an even bigger financial hit.

Believe me, I love the NYC/NJ area. I grew up there and have many friends and family who live there. However, living there held us back financially due to all of the money that we had to spend on housing. We finally made the decision to move to a lower cost of living area (suburban Baltimore MD) and, honestly, it was the best decision we could have made. Our mortgage payment (which includes principal, interest, property taxes, and insurance) is about 30% less now, even factoring in the fact that we went from a 30 year to 15 year mortgage. That alone has allowed us to turbo charge our savings quite a bit. Like you, our retirement savings was lagging behind before we moved. Now we are pretty much on track to meet our retirement "number".

We did have concerns because we had two children (13 and 11 at the time that we moved), so you always worry about how they will adapt. Fortunately, they made the transition very well - better than I expected to be quite honest.

I know that this isn't quite what you were asking. However, I wanted to throw this more radical idea out there as an option for your to consider.
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geerhardusvos
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Re: Buying a house in NJ, how much to spend?

Post by geerhardusvos »

JHU ALmuni wrote: Mon Nov 23, 2020 4:30 pm Hello,

I just started looking to buy a house in NJ and wondering how much to spend, below some information that might help:

1. Married with two young kids.
2. Household income: $220K
3. Total retirement savings: $300K
4. Age: 37 and 33 (kids 9 and 11)
5. Current rent: $2,600

Ideally I'd like to stay under $500K not sure yet what kind of house to expect for this budget. I'm only concerned because retirement savings is not where I want it to be (we just started making 220K a year just recently) so I would like to increase it to $700K+.

Property Taxe is high in NJ, that's another discouraging factor.

Reasons why I want to buy:
1. Build equity
2. Take advantage of lower mortgage rates
3. Have extra room since kids doing school remote and we both working from home at the moment.

Not rushing to buy but at the same time I feel my rent is high (NYC area).

Your thoughts?
For your income and location, your rent is low. I agree that your retirement savings need some work. Are you new to your income level? I like your idea of staying under $500K, but good luck. I would recommend continuing to rent in your scenario. I make 200,000 a year and we spend around $3100 a month on rent, which is a great deal in my area. Are you working remote? How much do you spend per year?

When considering buying: Check this out for starters
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musicmom
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Re: Buying a house in NJ, how much to spend?

Post by musicmom »

We lived in Morristown for >30 years. Great town, good schools. Old time safe neighborhood with really nice older homes.
We bought way back for $92T, taxes were $3000.
Sold for $420T, taxes up to $11,000.
Midtown direct makes commute possible if not great.

Most of commutable northern NJ real estate is insane.
We found a great retirement home 10 miles further out with taxes half of Motown house.
Kids still live close by.

OP, I wish you luck. You might find the place that works for your family.
Thegame14
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Re: Buying a house in NJ, how much to spend?

Post by Thegame14 »

JHU ALmuni wrote: Mon Nov 23, 2020 4:30 pm Hello,

I just started looking to buy a house in NJ and wondering how much to spend, below some information that might help:

1. Married with two young kids.
2. Household income: $220K
3. Total retirement savings: $300K
4. Age: 37 and 33 (kids 9 and 11)
5. Current rent: $2,600

Ideally I'd like to stay under $500K not sure yet what kind of house to expect for this budget. I'm only concerned because retirement savings is not where I want it to be (we just started making 220K a year just recently) so I would like to increase it to $700K+.

Property Taxe is high in NJ, that's another discouraging factor.

Reasons why I want to buy:
1. Build equity
2. Take advantage of lower mortgage rates
3. Have extra room since kids doing school remote and we both working from home at the moment.

Not rushing to buy but at the same time I feel my rent is high (NYC area).

Your thoughts?
HIGHLY Dependent on WHERE you are looking in NJ. TAxes are among the highest in the country AND the deduction was capped at 10K now. In any decent area, you are looking over $500K or you are in a bad area or a fixer upper, and taxes will generally be $15K and up. But I am talking north East NJ. You can go north west NJ which will be a long commute to most jobs but going towards PA you can get cheap houses and taxes. Also go south, central and especially south NJ you can get much cheaper, homes in the 300-400K range that are 3K sq feet with half an acre of land, and south jersey even better. BUT if you are talking like Montclair NJ, then you need to be $700K and up and $20K and up in taxes... NJ is heavily location oriented, and of course the places close to jobs and the city are the most expensive if you want a "nice" town.
retiringwhen
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Re: Buying a house in NJ, how much to spend?

Post by retiringwhen »

Thegame14 wrote: Mon Nov 23, 2020 9:27 pm You can go north west NJ which will be a long commute to most jobs but going towards PA you can get cheap houses and taxes.
Houses are cheaper, but the tax rates are higher. You pay more per assessed $ of home in Hunterdon County than anywhere in the USA.

NJ's entire problem is taxes. High income taxes, confiscatory property taxes, middling sales tax, rising gas taxes. There is no relief anywhere for a family making median or above income.

Remember, NJ income tax rates are not indexed to inflation, so annual tax increases there too.

Recent changes in gas taxes see them go up every year. The property tax relief programs all failed. And this year the COVID relief bill passed by the state allows for repayment of those bonds by a surcharge state property tax! It is only going to get worse.

My serious bottom line advice is don't buy a house in NJ, move somewhere that has a better economic future for the average schmo and $220K in NJ makes you surprisingly average...
Thegame14
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Re: Buying a house in NJ, how much to spend?

Post by Thegame14 »

retiringwhen wrote: Mon Nov 23, 2020 9:42 pm
Thegame14 wrote: Mon Nov 23, 2020 9:27 pm You can go north west NJ which will be a long commute to most jobs but going towards PA you can get cheap houses and taxes.
Houses are cheaper, but the tax rates are higher. You pay more per assessed $ of home in Hunterdon County than anywhere in the USA.

NJ's entire problem is taxes. High income taxes, confiscatory property taxes, middling sales tax, rising gas taxes. There is no relief anywhere for a family making median or above income.

Remember, NJ income tax rates are not indexed to inflation, so annual tax increases there too.

Recent changes in gas taxes see them go up every year. The property tax relief programs all failed. And this year the COVID relief bill passed by the state allows for repayment of those bonds by a surcharge state property tax! It is only going to get worse.

My serious bottom line advice is don't buy a house in NJ, move somewhere that has a better economic future for the average schmo and $220K in NJ makes you surprisingly average...
our gax tax has gone up about 55 cents in the last few years, we used to have one of the cheapest gas in the country, not anymore. we bought in 2010 in a "nice area" in NNJ, paid $425 and the entire first floor had to be gutted with asbestos tiles on the floors. House built in the 60's, so 60 years old. have already also had to replace the roof.
Thegame14
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Re: Buying a house in NJ, how much to spend?

Post by Thegame14 »

but NJ also has high paying jobs and access to even higher paying jobs in NYC so most people get high paying jobs, pay for a expensive house and insane taxes, I mean INSANE taxes, my parents own three houses one in NNJ, one Jersey shore and one on Cape Cod. House in NNJ value 600K taxes, 17K, condo jersey shore value 350K, taxes $8K, house in cape cod with a boat slip value $550-$600K, taxes $3K
retiringwhen
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Re: Buying a house in NJ, how much to spend?

Post by retiringwhen »

Thegame14 wrote: Mon Nov 23, 2020 10:05 pm but NJ also has high paying jobs and access to even higher paying jobs in NYC so most people get high paying jobs, pay for a expensive house and insane taxes, I mean INSANE taxes, my parents own three houses one in NNJ, one Jersey shore and one on Cape Cod. House in NNJ value 600K taxes, 17K, condo jersey shore value 350K, taxes $8K, house in cape cod with a boat slip value $550-$600K, taxes $3K
$600K house in PA, $7500 taxes and that is high for the area.

You have to have a job that requires you to live in NYC metro area to justify NJ costs, otherwise there is no financial argument for staying.

Even a 20% pay cut in portable jobs can easily be justified for taxes alone. I have done the math it makes sense.

Just moving to an only slightly better state like PA, income taxes are almost half for income around $200K, property taxes are half and $/sq. ft. of home is always better when doing reasonable comparisons. Remember a 20% paycut also reduces net federal income taxes too!
keith6014
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Re: Buying a house in NJ, how much to spend?

Post by keith6014 »

retiringwhen wrote: Mon Nov 23, 2020 9:42 pm
Thegame14 wrote: Mon Nov 23, 2020 9:27 pm You can go north west NJ which will be a long commute to most jobs but going towards PA you can get cheap houses and taxes.
Houses are cheaper, but the tax rates are higher. You pay more per assessed $ of home in Hunterdon County than anywhere in the USA.

NJ's entire problem is taxes. High income taxes, confiscatory property taxes, middling sales tax, rising gas taxes. There is no relief anywhere for a family making median or above income.

Remember, NJ income tax rates are not indexed to inflation, so annual tax increases there too.

Recent changes in gas taxes see them go up every year. The property tax relief programs all failed. And this year the COVID relief bill passed by the state allows for repayment of those bonds by a surcharge state property tax! It is only going to get worse.

My serious bottom line advice is don't buy a house in NJ, move somewhere that has a better economic future for the average schmo and $220K in NJ makes you surprisingly average...
As a person who lives in NNJ, I 100% echo this. We make 2x the op and we feel the pinch.
Thegame14
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Re: Buying a house in NJ, how much to spend?

Post by Thegame14 »

when I was working we made $160K but with two kids in daycare we were paycheck to paycheck if not negative with $3K in daycare costs...
Grt2bOutdoors
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Re: Buying a house in NJ, how much to spend?

Post by Grt2bOutdoors »

KlangFool wrote: Mon Nov 23, 2020 5:59 pm
JHU ALmuni wrote: Mon Nov 23, 2020 4:30 pm
Property Taxe is high in NJ, that's another discouraging factor.

Reasons why I want to buy:
1. Build equity
JHU ALmuni,

In general, folks buy a house to reduce or stabilize their housing expense. How does this work in a state like NJ with a high property tax? Even if the house is paid off, you are still on the hook for the high property tax.


KlangFool
Wrong, people buy for a good quality of living including stable housing expenses. When NYC rent is $5k in 15 years, the OPs may be $2.5k or less. The school system will be better, the crime level may be better. Or not but chances are good that it will be better than what’s in NYC right now.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Grt2bOutdoors
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Re: Buying a house in NJ, how much to spend?

Post by Grt2bOutdoors »

keith6014 wrote: Mon Nov 23, 2020 10:51 pm
retiringwhen wrote: Mon Nov 23, 2020 9:42 pm
Thegame14 wrote: Mon Nov 23, 2020 9:27 pm You can go north west NJ which will be a long commute to most jobs but going towards PA you can get cheap houses and taxes.
Houses are cheaper, but the tax rates are higher. You pay more per assessed $ of home in Hunterdon County than anywhere in the USA.

NJ's entire problem is taxes. High income taxes, confiscatory property taxes, middling sales tax, rising gas taxes. There is no relief anywhere for a family making median or above income.

Remember, NJ income tax rates are not indexed to inflation, so annual tax increases there too.

Recent changes in gas taxes see them go up every year. The property tax relief programs all failed. And this year the COVID relief bill passed by the state allows for repayment of those bonds by a surcharge state property tax! It is only going to get worse.

My serious bottom line advice is don't buy a house in NJ, move somewhere that has a better economic future for the average schmo and $220K in NJ makes you surprisingly average...
As a person who lives in NNJ, I 100% echo this. We make 2x the op and we feel the pinch.
And where is such a fantasyland? Westchester will gouge you in taxes, in the boroughs you need $900k for a house in need of gut overhaul, in Long Island you will be also taxed to death, Connecticut is no tax dream either, PA has a long commute.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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stickman731
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Re: Buying a house in NJ, how much to spend?

Post by stickman731 »

I do not know if this is your first home but here is a good guide for home buying in NJ

https://www.njhousing.gov/dca/hmfa/medi ... _guide.pdf

For my first, saved 25% used 20% on the down payment and remainder to fix up and furnishings.

Develop criteria that you must have and secondary list of what you would like but not critical

For me they were as follows:

Price ($400K)
No major fix up as I am handy but not skilled enough to do it myself
Good school district - easier to sell as you will resell it
No double yellow-line - indicates high traffic area, tougher to resell
No corner property
No sump pump or drainage issue
No HOA


Good luck and find a good buyer agent and good inspector.
Last edited by stickman731 on Tue Nov 24, 2020 7:34 am, edited 1 time in total.
retiringwhen
Posts: 1978
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Re: Buying a house in NJ, how much to spend?

Post by retiringwhen »

Grt2bOutdoors wrote: Tue Nov 24, 2020 2:13 am
keith6014 wrote: Mon Nov 23, 2020 10:51 pm
retiringwhen wrote: Mon Nov 23, 2020 9:42 pm
Thegame14 wrote: Mon Nov 23, 2020 9:27 pm You can go north west NJ which will be a long commute to most jobs but going towards PA you can get cheap houses and taxes.
Houses are cheaper, but the tax rates are higher. You pay more per assessed $ of home in Hunterdon County than anywhere in the USA.

NJ's entire problem is taxes. High income taxes, confiscatory property taxes, middling sales tax, rising gas taxes. There is no relief anywhere for a family making median or above income.

Remember, NJ income tax rates are not indexed to inflation, so annual tax increases there too.

Recent changes in gas taxes see them go up every year. The property tax relief programs all failed. And this year the COVID relief bill passed by the state allows for repayment of those bonds by a surcharge state property tax! It is only going to get worse.

My serious bottom line advice is don't buy a house in NJ, move somewhere that has a better economic future for the average schmo and $220K in NJ makes you surprisingly average...
As a person who lives in NNJ, I 100% echo this. We make 2x the op and we feel the pinch.
And where is such a fantasyland? Westchester will gouge you in taxes, in the boroughs you need $900k for a house in need of gut overhaul, in Long Island you will be also taxed to death, Connecticut is no tax dream either, PA has a long commute.
NYC metro area encompasses less than 1% of the geography of the USA, and about 5% of the population. It is still a land of opportunity. Most of the moving trucks leaving NYC haven't been stopping in NJ.
keith6014
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Re: Buying a house in NJ, how much to spend?

Post by keith6014 »

Grt2bOutdoors wrote: Tue Nov 24, 2020 2:13 am
keith6014 wrote: Mon Nov 23, 2020 10:51 pm
retiringwhen wrote: Mon Nov 23, 2020 9:42 pm
Thegame14 wrote: Mon Nov 23, 2020 9:27 pm You can go north west NJ which will be a long commute to most jobs but going towards PA you can get cheap houses and taxes.
Houses are cheaper, but the tax rates are higher. You pay more per assessed $ of home in Hunterdon County than anywhere in the USA.

NJ's entire problem is taxes. High income taxes, confiscatory property taxes, middling sales tax, rising gas taxes. There is no relief anywhere for a family making median or above income.

Remember, NJ income tax rates are not indexed to inflation, so annual tax increases there too.

Recent changes in gas taxes see them go up every year. The property tax relief programs all failed. And this year the COVID relief bill passed by the state allows for repayment of those bonds by a surcharge state property tax! It is only going to get worse.

My serious bottom line advice is don't buy a house in NJ, move somewhere that has a better economic future for the average schmo and $220K in NJ makes you surprisingly average...
As a person who lives in NNJ, I 100% echo this. We make 2x the op and we feel the pinch.
And where is such a fantasyland? Westchester will gouge you in taxes, in the boroughs you need $900k for a house in need of gut overhaul, in Long Island you will be also taxed to death, Connecticut is no tax dream either, PA has a long commute.
The closest thing I can think of is Connecticut (Darrien/New Caanan/Greenwich). Good: Schools and approximate to NYC (1 hour metro north). Lower property taxes than NJ and NY. Bad: Metro north is expensive. 2 people commuting to NYC will be close to $10k year. Very high property values. Lack of diversity.
retiringwhen
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Re: Buying a house in NJ, how much to spend?

Post by retiringwhen »

For some context on the overall housing market, Ben Carlson has a nice summary today. It supports the idea that demand for housing is on a long-term upward trend, but he hints the market may be a bit ahead of itself right now.

As always, he provides data driven analysis with a strong millennial bias (good counter to my fuddy old late boomer attitude :annoyed )

OP, I may be one of those boomers who would like to cash in my equity, if you are interested in excellent schools, semi-rural, but with a long NYC commute, make me an offer my wife can't refuse :wink:

The Youths Are Coming For The Housing Market
humblecoder
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Re: Buying a house in NJ, how much to spend?

Post by humblecoder »

retiringwhen wrote: Mon Nov 23, 2020 9:42 pm
Thegame14 wrote: Mon Nov 23, 2020 9:27 pm You can go north west NJ which will be a long commute to most jobs but going towards PA you can get cheap houses and taxes.
Houses are cheaper, but the tax rates are higher. You pay more per assessed $ of home in Hunterdon County than anywhere in the USA.

NJ's entire problem is taxes. High income taxes, confiscatory property taxes, middling sales tax, rising gas taxes. There is no relief anywhere for a family making median or above income.

Remember, NJ income tax rates are not indexed to inflation, so annual tax increases there too.

Recent changes in gas taxes see them go up every year. The property tax relief programs all failed. And this year the COVID relief bill passed by the state allows for repayment of those bonds by a surcharge state property tax! It is only going to get worse.

My serious bottom line advice is don't buy a house in NJ, move somewhere that has a better economic future for the average schmo and $220K in NJ makes you surprisingly average...
See my post above. As a former NJ homeowner who moved out of the state, I agree.

My observation is that the biggest problem in NJ is "home rule". Every borough, village, town, and city is run as its own independent entity. Each has its own police department, fire department, school district, zoning board, municipal courts etc. That's a lot of overhead that could be trimmed through the sharing of services. And of course all of that overhead is paid for through property taxes since that's how they are funded. I know that there have been efforts to combine services among towns. However, they have not been terribly successful. Where I live now, most services are provided at a county level, which seems much more efficient.
Jags4186
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Re: Buying a house in NJ, how much to spend?

Post by Jags4186 »

humblecoder wrote: Tue Nov 24, 2020 8:49 am
retiringwhen wrote: Mon Nov 23, 2020 9:42 pm
Thegame14 wrote: Mon Nov 23, 2020 9:27 pm You can go north west NJ which will be a long commute to most jobs but going towards PA you can get cheap houses and taxes.
Houses are cheaper, but the tax rates are higher. You pay more per assessed $ of home in Hunterdon County than anywhere in the USA.

NJ's entire problem is taxes. High income taxes, confiscatory property taxes, middling sales tax, rising gas taxes. There is no relief anywhere for a family making median or above income.

Remember, NJ income tax rates are not indexed to inflation, so annual tax increases there too.

Recent changes in gas taxes see them go up every year. The property tax relief programs all failed. And this year the COVID relief bill passed by the state allows for repayment of those bonds by a surcharge state property tax! It is only going to get worse.

My serious bottom line advice is don't buy a house in NJ, move somewhere that has a better economic future for the average schmo and $220K in NJ makes you surprisingly average...
See my post above. As a former NJ homeowner who moved out of the state, I agree.

My observation is that the biggest problem in NJ is "home rule". Every borough, village, town, and city is run as its own independent entity. Each has its own police department, fire department, school district, zoning board, municipal courts etc. That's a lot of overhead that could be trimmed through the sharing of services. And of course all of that overhead is paid for through property taxes since that's how they are funded. I know that there have been efforts to combine services among towns. However, they have not been terribly successful. Where I live now, most services are provided at a county level, which seems much more efficient.
Yea...NJ doesn’t need 535 police chiefs, 535 fire chiefs, 1000 Captains, 4000 lieutenants, 535 Superintendents, 535 Assistant Superintendents, 5000 Principals, 20000 Vice Principals...
Dontwasteit
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Re: Buying a house in NJ, how much to spend?

Post by Dontwasteit »

KlangFool wrote: Mon Nov 23, 2020 5:59 pm
JHU ALmuni wrote: Mon Nov 23, 2020 4:30 pm
Property Taxe is high in NJ, that's another discouraging factor.

Reasons why I want to buy:
1. Build equity
JHU ALmuni,

In general, folks buy a house to reduce or stabilize their housing expense. How does this work in a state like NJ with a high property tax? Even if the house is paid off, you are still on the hook for the high property tax.

Taxes in Jersey are insane and constantly going higher.
KlangFool
London
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Re: Buying a house in NJ, how much to spend?

Post by London »

Jags4186 wrote: Tue Nov 24, 2020 8:57 am
humblecoder wrote: Tue Nov 24, 2020 8:49 am
retiringwhen wrote: Mon Nov 23, 2020 9:42 pm
Thegame14 wrote: Mon Nov 23, 2020 9:27 pm You can go north west NJ which will be a long commute to most jobs but going towards PA you can get cheap houses and taxes.
Houses are cheaper, but the tax rates are higher. You pay more per assessed $ of home in Hunterdon County than anywhere in the USA.

NJ's entire problem is taxes. High income taxes, confiscatory property taxes, middling sales tax, rising gas taxes. There is no relief anywhere for a family making median or above income.

Remember, NJ income tax rates are not indexed to inflation, so annual tax increases there too.

Recent changes in gas taxes see them go up every year. The property tax relief programs all failed. And this year the COVID relief bill passed by the state allows for repayment of those bonds by a surcharge state property tax! It is only going to get worse.

My serious bottom line advice is don't buy a house in NJ, move somewhere that has a better economic future for the average schmo and $220K in NJ makes you surprisingly average...
See my post above. As a former NJ homeowner who moved out of the state, I agree.

My observation is that the biggest problem in NJ is "home rule". Every borough, village, town, and city is run as its own independent entity. Each has its own police department, fire department, school district, zoning board, municipal courts etc. That's a lot of overhead that could be trimmed through the sharing of services. And of course all of that overhead is paid for through property taxes since that's how they are funded. I know that there have been efforts to combine services among towns. However, they have not been terribly successful. Where I live now, most services are provided at a county level, which seems much more efficient.
Yea...NJ doesn’t need 535 police chiefs, 535 fire chiefs, 1000 Captains, 4000 lieutenants, 535 Superintendents, 535 Assistant Superintendents, 5000 Principals, 20000 Vice Principals...
The towns can pay for those things if they want them. The problem is that towns are forced to subsidize Newark’s schools on top of their own. That’s a costly proposition.

My town gets zero state aid and keeps their budget flat if you normalize out the ever increasing burden of the Abbott districts.
Jags4186
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Re: Buying a house in NJ, how much to spend?

Post by Jags4186 »

London wrote: Tue Nov 24, 2020 9:42 am The towns can pay for those things if they want them. The problem is that towns are forced to subsidize Newark’s schools on top of their own. That’s a costly proposition.

My town gets zero state aid and keeps their budget flat if you normalize out the ever increasing burden of the Abbott districts.
I know this is going to get flagged for off topic, but come on. NJ has poor areas just like every other state. It’s society’s responsibility to try and help folks who are underprivileged. You can’t just build a wall around underprivileged neighborhoods and let them fend for themselves “Escape from NY” style. Just like we can’t build a wall around Kentucky or South Carolina and let them fend for themselves. There’s plenty of things that should be improved in NJ, but “to hell with the poor people” is not how it should be done.

Back to the topic, OP, the crux of the matter in NJ is if you want to live in one of the “really nice” NY suburbs you either need to work in the city and make a boatload or have some sort of business or profession in NJ and make a boatload. As much as everyone would want to live in Montclair the reality is you’re competing against folks who make a ton of money and can drive up the prices. $500k is going to get you a house that is old, small, and without a ton of curb appeal. Believe me, I know. While my house has some curb appeal, it is small, old, with a sloped backyard that isn’t super usable. I don’t live in a town with a direct train to NYC, although we have DeCamp that stops down the block from me. It cost $469k 2 years ago. I probably overpaid then and it’s likely worth the same now. But it is a fair amount bigger than the tiny apartment my wife and I lived in prior to moving here.

If I could have done it over I probably would have spent more money and bought a newer, bigger house. My old house has lots of repairs on things that are simply not value add, just value maintain. Not including QOL improvements, I’ve spent over $20k just on “maintenance” in the two years I’ve been here.

On the flip side, my wife lost her job due to the pandemic, is still unemployed, and I can easily make our $2200 monthly payment.
Last edited by Jags4186 on Tue Nov 24, 2020 10:02 am, edited 1 time in total.
crefwatch
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Re: Buying a house in NJ, how much to spend?

Post by crefwatch »

Schools and roads have to be paid for somehow. When you talk about property taxes, for example, you have to compare how schools are paid for in the area you are comparing with NJ. And you have to consider the quality of the schools. Many American states have mediocre or poor school systems. During the reign of the last governor (of NJ) to refuse to raise gas taxes, road and bridge infrastructure suffered greatly. This is an exaggeration, but it seems like most bridges over the Hackensack and Passaic Rivers only have half their lanes in use, because of deteriorated structures. Gas taxes are a form of "user fee". People who hate taxes ought to love user fees.

You only asked about home cost, but you also need to consider how different it is to own a home versus renting. Many first-time homeowners underestimate the ongoing and maintenance costs of owning a home (let alone the deferred repairs they have to pay for because the previous owner didn't keep things up!) When your commute is over an hour, you have less energy for your chores when you get home. And, as you already know, employment no longer stops at 5PM anymore. (My wife regularly had teleconferences including Asia from home, at very odd times of day.)

Edit: Here is the distribution of my $12,500 annual property tax:
46% Local (K-8) School Tax
25% Regional High Schools (there are two, with joint admissions.)
14% Town and Open Space funding tax
13% County and Open Space funding tax
2% Public LIbrary funding

That does not look like out-of-control paving, garbage, fire, and police costs in my town! By the way, the vast majority of Bergen County NJ towns have volunteer fire departments. But they are not "free".
Last edited by crefwatch on Tue Nov 24, 2020 4:14 pm, edited 1 time in total.
retiringwhen
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Re: Buying a house in NJ, how much to spend?

Post by retiringwhen »

The real problem with NJ property taxes (and state taxes too) is the unspoken but complete and total corruption by unions both private and public as well as double dealing among officials that include incredible pensions that get added onto via various schemes across township and school boundaries.

A single data point can help understand the cost. The average cost per mile in the USA to refurbish a road is under $200,000, but for NJ it is $2M. There is no excuse outside of corruption that can create a 10X cost differential. See $2 million a mile: Why roads cost so much in N.J.
retire2022
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Re: Buying a house in NJ, how much to spend?

Post by retire2022 »

op

https://money.com/best-places-to-retire-2020/

8. Bridgewater, New Jersey
Dawn Wilde, The Breeze

Population: 45,000
Population 50-plus: 43.7%
Days of sunshine a year: 205
Median home price: $390,000

Bridgewater Township in New Jersey has changed plenty since the stars-and-stripes flew above it for the very first time in 1777. From a small farming community as recently as the fifties, the township has evolved into one of the hottest suburbs of New York City because of its proximity to the Big Apple alongside affordable real estate and lower crime rates.

Located just 40 minutes from Newark and 90 minutes by train from Penn Station in Manhattan, Bridgewater has median home prices of $390,000. Compare that with half a million dollars for the New York–Newark–Jersey City metro area.

One of Bridgewater’s major draws is the Washington Valley Park, where visitors can enjoy 720 acres of pine and hemlock forests, as well as a 21-acre reservoir open to fishing. A network of trails allows for hiking and mountain biking, while the Hawk Watch Area is popular with birdwatchers, as it provides a spot to view the August to November migration of raptor birds (including hawks, ospreys, and bald eagles) down south.

Back in town, golf enthusiasts will enjoy hitting the links at the Green Knoll Golf Course, one of the many publicly maintained courses in Somerset County. Green Knoll offers challenges for golfers of all levels, while aspiring golfers can take courses at the Learning Center in the Neshanic Valley Golf Course in nearby Neshanic Station.

For a taste of MLB-level talent without the price tag, you can catch the Somerset Patriots, the New York Yankees’ Double-A affiliate team, at TD Bank Ballpark. Premium field box tickets go for as low as $15 (though games with crowds are currently on hold due to the coronavirus pandemic.)
knowledge
Posts: 302
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Re: Buying a house in NJ, how much to spend?

Post by knowledge »

I have a friend who lives in NYC who claims that "every person from NJ complains about property taxes. It's all they talk about." She was joking, but it's feels true.

Here's the thing, every single person in the NYC orbit is looking for the same thing: low price, good schools, safe neighborhood, easy commute. And the market reflects that. I'm in Bergen County, but I could easily be in Essex, or Nassau or Westchester. If there was a mispriced hidden gem, I'd move there quickly - so would others.

So long as NYC is a magnet for high paying jobs, you're going to have this dynamic.
retiringwhen
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Re: Buying a house in NJ, how much to spend?

Post by retiringwhen »

knowledge wrote: Tue Nov 24, 2020 11:13 am I have a friend who lives in NYC who claims that "every person from NJ complains about property taxes. It's all they talk about." She was joking, but it's feels true.
The only times the rest of my family (none live in NJ) talk about taxes is to make fun of how much I pay.
Grt2bOutdoors
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Re: Buying a house in NJ, how much to spend?

Post by Grt2bOutdoors »

retiringwhen wrote: Tue Nov 24, 2020 5:59 am
Grt2bOutdoors wrote: Tue Nov 24, 2020 2:13 am
keith6014 wrote: Mon Nov 23, 2020 10:51 pm
retiringwhen wrote: Mon Nov 23, 2020 9:42 pm
Thegame14 wrote: Mon Nov 23, 2020 9:27 pm You can go north west NJ which will be a long commute to most jobs but going towards PA you can get cheap houses and taxes.
Houses are cheaper, but the tax rates are higher. You pay more per assessed $ of home in Hunterdon County than anywhere in the USA.

NJ's entire problem is taxes. High income taxes, confiscatory property taxes, middling sales tax, rising gas taxes. There is no relief anywhere for a family making median or above income.

Remember, NJ income tax rates are not indexed to inflation, so annual tax increases there too.

Recent changes in gas taxes see them go up every year. The property tax relief programs all failed. And this year the COVID relief bill passed by the state allows for repayment of those bonds by a surcharge state property tax! It is only going to get worse.

My serious bottom line advice is don't buy a house in NJ, move somewhere that has a better economic future for the average schmo and $220K in NJ makes you surprisingly average...
As a person who lives in NNJ, I 100% echo this. We make 2x the op and we feel the pinch.
And where is such a fantasyland? Westchester will gouge you in taxes, in the boroughs you need $900k for a house in need of gut overhaul, in Long Island you will be also taxed to death, Connecticut is no tax dream either, PA has a long commute.
NYC metro area encompasses less than 1% of the geography of the USA, and about 5% of the population. It is still a land of opportunity. Most of the moving trucks leaving NYC haven't been stopping in NJ.
And what value is that if the OP is clearly not willing, able or wanting to move south or west or north of NJ or NY?
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
Grt2bOutdoors
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Re: Buying a house in NJ, how much to spend?

Post by Grt2bOutdoors »

retiringwhen wrote: Tue Nov 24, 2020 11:22 am
knowledge wrote: Tue Nov 24, 2020 11:13 am I have a friend who lives in NYC who claims that "every person from NJ complains about property taxes. It's all they talk about." She was joking, but it's feels true.
The only times the rest of my family (none live in NJ) talk about taxes is to make fun of how much I pay.
And you can make fun of how much driving they need to do for a gallon of milk or any other service.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
retiringwhen
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Re: Buying a house in NJ, how much to spend?

Post by retiringwhen »

Grt2bOutdoors wrote: Tue Nov 24, 2020 11:24 am
retiringwhen wrote: Tue Nov 24, 2020 11:22 am
knowledge wrote: Tue Nov 24, 2020 11:13 am I have a friend who lives in NYC who claims that "every person from NJ complains about property taxes. It's all they talk about." She was joking, but it's feels true.
The only times the rest of my family (none live in NJ) talk about taxes is to make fun of how much I pay.
And you can make fun of how much driving they need to do for a gallon of milk or any other service.
I loose on that front too. Every single person is closer to a large super market than me (one of them probably doesn't even have to go outside for gallon of milk!). (well, probably I am tied with my parents.)

I will say, I most likely have better medical care available than all but one, but I have to drive a ways for it too. Rural Central NJ is, well rural, you know.

Schools probably 1st or 2nd out of 5 sample data points.
JackoC
Posts: 1952
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Re: Buying a house in NJ, how much to spend?

Post by JackoC »

Thegame14 wrote: Mon Nov 23, 2020 9:27 pm
JHU ALmuni wrote: Mon Nov 23, 2020 4:30 pm Hello,

I just started looking to buy a house in NJ and wondering how much to spend, below some information that might help:
Not rushing to buy but at the same time I feel my rent is high (NYC area).
HIGHLY Dependent on WHERE you are looking in NJ. TAxes are among the highest in the country AND the deduction was capped at 10K now. In any decent area, you are looking over $500K or you are in a bad area or a fixer upper, and taxes will generally be $15K and up. But I am talking north East NJ. You can go north west NJ which will be a long commute to most jobs but going towards PA you can get cheap houses and taxes. Also go south, central and especially south NJ you can get much cheaper, homes in the 300-400K range that are 3K sq feet with half an acre of land, and south jersey even better. BUT if you are talking like Montclair NJ, then you need to be $700K and up and $20K and up in taxes... NJ is heavily location oriented, and of course the places close to jobs and the city are the most expensive if you want a "nice" town.
I basically agree. NJ is a small state, but prices vary a lot and average commuting speed is low. And while generalized facts and opinions about NJ might be valid, you presumably already know these so I don't see how they help much. I think you need to specify what town(s) you work in, not what general part of the state, or if you actually work in the City which many are assuming but you didn't say, that I saw. It's going to be tough to make the equation work at your price point v perceived social desirability of particular places (codename 'good schools') and tolerance for long commuting. I think you need to get more specific to get practically useful advice.

My other two general comments are first one you probably already know if indeed you work in the City or very close: the standard 'commute times' bandied around tend to understate the ordeal. I live in NJ 1 air mile west of 12th Avenue and it used to take me around 45 minutes, realistic average not best ever, door to desk at my actual office in Manhattan. Take generic estimates from the far NJ suburbs or PA to Manhattan with a big chunk of salt. Though again I missed it if you actually said you work in the City.

Also the overall average prop tax rate in NJ is 2.4% of market pa v 1.1% US national average. So it's high but may sometimes get a bit exaggerated in discussions. Although, the places it's most onerous %-wise tend to be relatively moderate price areas fairly close to the City. Prop taxes here are around US national average by value, OTOH $500k is a small, less than first rate condo.
retiringwhen
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Re: Buying a house in NJ, how much to spend?

Post by retiringwhen »

JackoC wrote: Tue Nov 24, 2020 11:37 am Also the overall average prop tax rate in NJ is 2.4% of market pa v 1.1% US national average. So it's high but may sometimes get a bit exaggerated in discussions. Although, the places it's most onerous %-wise tend to be relatively moderate price areas fairly close to the City. Prop taxes here are around US national average by value, OTOH $500k is a small, less than first rate condo.
Using your own statistic, NJ property taxes are 220% the national average on the same priced house (that fits my own anecdotal data). It is not an exaggeration to conclude they are out of control and onerous.

Even CA has better property tax rates than that. Texas and Illinois do their best to do their own NJ imitations, but at least TX doesn't have an income tax!

PA, DE and even MD to an extent have much lower property taxes (MD has high income tax), NY, CT are on the high end but still not like NJ.
Jags4186
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Re: Buying a house in NJ, how much to spend?

Post by Jags4186 »

retiringwhen wrote: Tue Nov 24, 2020 11:46 am
JackoC wrote: Tue Nov 24, 2020 11:37 am Also the overall average prop tax rate in NJ is 2.4% of market pa v 1.1% US national average. So it's high but may sometimes get a bit exaggerated in discussions. Although, the places it's most onerous %-wise tend to be relatively moderate price areas fairly close to the City. Prop taxes here are around US national average by value, OTOH $500k is a small, less than first rate condo.
Using your own statistic, NJ property taxes are 220% the national average on the same priced house (that fits my own anecdotal data). It is not an exaggeration to conclude they are out of control and onerous.

Even CA has better property tax rates than that. Texas and Illinois do their best to do their own NJ imitations, but at least TX doesn't have an income tax!

PA, DE and even MD to an extent have much lower property taxes (MD has high income tax), NY, CT are on the high end but still not like NJ.
The other thing to consider is the price of the house. A $500k house in say, South Carolina that has $3,000 property taxes might be a 3000+ sqft home on at least half an acre. $3,000 property taxes doesn’t feel so bad. A $500k house in Rutherford, NJ that is on a 50x100 lot, is 1500 sqft, and hasn’t been updated since 1982 with $11,000 property taxes doesn’t feel so good.
IngognitoUSA
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Re: Buying a house in NJ, how much to spend?

Post by IngognitoUSA »

NJ property taxes while high are comparable to Westchester and Long Island. You can’t compare average NYS property tax vs average NJ property tax. Upstate NY skews the average.

No one moves to NJ anymore, it’s too crowded. 😀
Last edited by IngognitoUSA on Tue Nov 24, 2020 12:00 pm, edited 1 time in total.
JackoC
Posts: 1952
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Re: Buying a house in NJ, how much to spend?

Post by JackoC »

retiringwhen wrote: Tue Nov 24, 2020 11:46 am
JackoC wrote: Tue Nov 24, 2020 11:37 am Also the overall average prop tax rate in NJ is 2.4% of market pa v 1.1% US national average. So it's high but may sometimes get a bit exaggerated in discussions. Although, the places it's most onerous %-wise tend to be relatively moderate price areas fairly close to the City. Prop taxes here are around US national average by value, OTOH $500k is a small, less than first rate condo.
Using your own statistic, NJ property taxes are 220% the national average on the same priced house (that fits my own anecdotal data). It is not an exaggeration to conclude they are out of control and onerous.

Even CA has better property tax rates than that. Texas and Illinois do their best to do their own NJ imitations, but at least TX doesn't have an income tax!

PA, DE and even MD to an extent have much lower property taxes (MD has high income tax), NY, CT are on the high end but still not like NJ.
I didn't say a given number was characterized as 'out of control and onerous' that I didn't think was 'out of control and onerous' which seems like a political opinion to me. I have my opinions but try to keep them out of my posts here. I was simply giving a real number. Posts including on this thread said or implied a higher ratio than that. I'm just giving a benchmark for what it actually is. Besides which % of value isn't the only relevant measure, again it's low 1%'s of value where I live in NJ but the absolute $ numbers are very high because the values are.

But I'd again I'd stick mainly with my theme that a person trying to get useful advice, not start a generalized rant-fest, needs to say where they work in NJ or if actually in the City. Then others might give useful advice to try to find desirable housing at $500k depending on tolerance for commuting, 'good schools' etc. It's even less focused to start pointing at living costs in other states expect maybe PA. OP said nothing about considering getting a job in another state.
RTF
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Re: Buying a house in NJ, how much to spend?

Post by RTF »

My wife and I are kind of in a similar situation as well and have a similar income as the OP. We’re currently renting in Morris county and feel somewhat priced out of the nice neighborhoods when we factor in everything. My wife works in Morristown and I drive in to JFK once possibly twice a week, so we do have a little flexibility on location. If we can’t transfer to a another area we are considering starting to look in East Stroudsburg and just dealing with the commute.
JackoC
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Re: Buying a house in NJ, how much to spend?

Post by JackoC »

IngognitoUSA wrote: Tue Nov 24, 2020 11:58 am NJ property taxes while high are comparable to Westchester and Long Island. You can’t compare average NYS property tax vs average NJ property tax. Upstate NY skews the average.
Yeah, back to considering a specific person's request for specific advice about home buying without changing their job, not 'where in world should I live''. Assuming, though again OP never said that I saw, OP works in Manhattan you could live in the City where prop taxes vary widely as % of value but as a rule are significantly lower than in NJ, but pay City income tax you don't pay as commuter. Or, you could live in the NYS suburbs of the City where prop taxes aren't necessarily much lower than in NJ. Moving to SC or SD is an entirely different discussion.
London
Posts: 184
Joined: Sun Dec 11, 2016 11:50 am

Re: Buying a house in NJ, how much to spend?

Post by London »

Jags4186 wrote: Tue Nov 24, 2020 10:00 am
London wrote: Tue Nov 24, 2020 9:42 am The towns can pay for those things if they want them. The problem is that towns are forced to subsidize Newark’s schools on top of their own. That’s a costly proposition.

My town gets zero state aid and keeps their budget flat if you normalize out the ever increasing burden of the Abbott districts.
I know this is going to get flagged for off topic, but come on. NJ has poor areas just like every other state. It’s society’s responsibility to try and help folks who are underprivileged. You can’t just build a wall around underprivileged neighborhoods and let them fend for themselves “Escape from NY” style. Just like we can’t build a wall around Kentucky or South Carolina and let them fend for themselves. There’s plenty of things that should be improved in NJ, but “to hell with the poor people” is not how it should be done.
I lazily said Newark when I should have just said Abbott districts. The list of towns receiving aid hasn’t changed in 35 years and includes Hoboken, a very wealthy town. My frustration isn’t about shirking responsibility. It’s that the state made up its mind and never relooked at the issue.

To make this actionable, OP should buy in Hoboken. That would make tax burden low in relation to services received.

Sincerely, a NJ resident paying $30k a year in property tax.
NJdad6
Posts: 276
Joined: Thu Mar 23, 2017 8:51 am

Re: Buying a house in NJ, how much to spend?

Post by NJdad6 »

retire2022 wrote: Tue Nov 24, 2020 11:06 am op

https://money.com/best-places-to-retire-2020/

8. Bridgewater, New Jersey
Dawn Wilde, The Breeze

Population: 45,000
Population 50-plus: 43.7%
Days of sunshine a year: 205
Median home price: $390,000

Bridgewater Township in New Jersey has changed plenty since the stars-and-stripes flew above it for the very first time in 1777. From a small farming community as recently as the fifties, the township has evolved into one of the hottest suburbs of New York City because of its proximity to the Big Apple alongside affordable real estate and lower crime rates.

Located just 40 minutes from Newark and 90 minutes by train from Penn Station in Manhattan, Bridgewater has median home prices of $390,000. Compare that with half a million dollars for the New York–Newark–Jersey City metro area.

One of Bridgewater’s major draws is the Washington Valley Park, where visitors can enjoy 720 acres of pine and hemlock forests, as well as a 21-acre reservoir open to fishing. A network of trails allows for hiking and mountain biking, while the Hawk Watch Area is popular with birdwatchers, as it provides a spot to view the August to November migration of raptor birds (including hawks, ospreys, and bald eagles) down south.

Back in town, golf enthusiasts will enjoy hitting the links at the Green Knoll Golf Course, one of the many publicly maintained courses in Somerset County. Green Knoll offers challenges for golfers of all levels, while aspiring golfers can take courses at the Learning Center in the Neshanic Valley Golf Course in nearby Neshanic Station.

For a taste of MLB-level talent without the price tag, you can catch the Somerset Patriots, the New York Yankees’ Double-A affiliate team, at TD Bank Ballpark. Premium field box tickets go for as low as $15 (though games with crowds are currently on hold due to the coronavirus pandemic.)
Good luck finding a nice single family home for $390k in Bridgewater. Can get a townhouse or condo for that price.
NJdad6
Posts: 276
Joined: Thu Mar 23, 2017 8:51 am

Re: Buying a house in NJ, how much to spend?

Post by NJdad6 »

London wrote: Tue Nov 24, 2020 12:24 pm
Jags4186 wrote: Tue Nov 24, 2020 10:00 am
London wrote: Tue Nov 24, 2020 9:42 am The towns can pay for those things if they want them. The problem is that towns are forced to subsidize Newark’s schools on top of their own. That’s a costly proposition.

My town gets zero state aid and keeps their budget flat if you normalize out the ever increasing burden of the Abbott districts.
I know this is going to get flagged for off topic, but come on. NJ has poor areas just like every other state. It’s society’s responsibility to try and help folks who are underprivileged. You can’t just build a wall around underprivileged neighborhoods and let them fend for themselves “Escape from NY” style. Just like we can’t build a wall around Kentucky or South Carolina and let them fend for themselves. There’s plenty of things that should be improved in NJ, but “to hell with the poor people” is not how it should be done.
I lazily said Newark when I should have just said Abbott districts. The list of towns receiving aid hasn’t changed in 35 years and includes Hoboken, a very wealthy town. My frustration isn’t about shirking responsibility. It’s that the state made up its mind and never relooked at the issue.

To make this actionable, OP should buy in Hoboken. That would make tax burden low in relation to services received.

Sincerely, a NJ resident paying $30k a year in property tax.
The issue is not that people don’t want to help those less fortunate it is corruption on a massive scale. Millions going every year with declining performance.
Grt2bOutdoors
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Joined: Thu Apr 05, 2007 8:20 pm
Location: New York

Re: Buying a house in NJ, how much to spend?

Post by Grt2bOutdoors »

London wrote: Tue Nov 24, 2020 12:24 pm
Jags4186 wrote: Tue Nov 24, 2020 10:00 am
London wrote: Tue Nov 24, 2020 9:42 am The towns can pay for those things if they want them. The problem is that towns are forced to subsidize Newark’s schools on top of their own. That’s a costly proposition.

My town gets zero state aid and keeps their budget flat if you normalize out the ever increasing burden of the Abbott districts.
I know this is going to get flagged for off topic, but come on. NJ has poor areas just like every other state. It’s society’s responsibility to try and help folks who are underprivileged. You can’t just build a wall around underprivileged neighborhoods and let them fend for themselves “Escape from NY” style. Just like we can’t build a wall around Kentucky or South Carolina and let them fend for themselves. There’s plenty of things that should be improved in NJ, but “to hell with the poor people” is not how it should be done.
I lazily said Newark when I should have just said Abbott districts. The list of towns receiving aid hasn’t changed in 35 years and includes Hoboken, a very wealthy town. My frustration isn’t about shirking responsibility. It’s that the state made up its mind and never relooked at the issue.

To make this actionable, OP should buy in Hoboken. That would make tax burden low in relation to services received.

Sincerely, a NJ resident paying $30k a year in property tax.
And practically none of those “wealthy Hobokonites” send their kids to the local schools. Instead they will shell out $25-50k a year for private schools in or around the town. It’s insane.
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions
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