As I have written many times before, all real estate is local.  So, when a central New Jersey newspaper, The Courier News, ran an article on the front page (below the fold, alas) entitled "With the market down, it's the right time to buy," it appears that even the local media have gotten the word. 

A notoriously pessimistic appraiser and New Jersey market guru was quoted to the effect that five years from now people will look back and say that 2008 was the year to buy.  Interest rates (though starting to climb) were low and prices were at the bottom before they started their climb in 2009.  The New Jersey market has not suffered as much as other areas, and central New Jersey, especially Somerset County, has been spared the worst.

New Jersey has remained a relatively strong market not so much for its strong economy, some point out, but because with high population density there is not that much land to build on, and many restrictions make it difficult to do so.  Consequently, New Jersey did not experience the overbuilding during the boom of 2000-2005 that we saw in California, Nevada and Florida, areas now going through a difficult real estate market.  There is considerable pent-up demand for housing in New Jersey, and as the word appears on media front pages that prices will start to increase soon, buyers will take a deep breath and move off the sidelines, or they can wait and think five years from now - "we could've been a homeowner."

The New Jersey Association of Realtors® (NJAR) sent to every New Jersey legislator and Governor Corzine a "Housing Resource Kit," a house-shaped box of information about the real estate transfer tax.  You may recall that there was a movement last year to allow municipalities to levy their own transfer tax.  Fortunately, it did not come to pass, but it is possible that it will be brought up again.

In the information packet sent to the legislators there is a form they can fill out that states in part "I ... pledge to protect homeowners' equity and oppose legislation that increases or expands the realty transfer fee."  Any legislator who signs it and faxes it back to NJAR will be listed on NJAR's website www.NJHomeTax.com.

Do you want to know if your legislator took the pledge?  Look here: http://www.njhometax.com/legislators.html. If your legislator is not on the list, check for your wallet....

Every few months someone asks me about the "New Jersey Exit Tax." Now, NJ has many, often exorbitant taxes, but for most people, there is no "exit tax." Homeowners who live in NJ and are selling their primary residence to move out of state are not obligated to pay a special fee to do so. 

There are cases where an out-of-state NJ property owner may have money escrowed at closing to cover any state taxes they might have incurred when they sell their NJ investment property. They need to talk with their tax adviser.

March 25, 2008 Update - Since I first published this report, it has become apparent that the State of New Jersey is becoming a bit aggressive on this issue, to the point that people who close on the sale of their home in NJ and no longer have a NJ address may be liable for the withholding noted above.  However, attorneys in NJ are saying that if the gain in value of the property is within the Federal limits of $250,000 for a single person or $500,000 for a married couple, they would not be obligated to withhold funds for payment.  No Federal gain, no New Jersey gain, they tell me.

But, be sure to check with your tax adviser on this point.