TRENTON – Citing data that shows the inventory of unsold homes in New Jersey rising since the expiration of the federal homebuyers’ tax credit, Senate Budget and Appropriations Committee Chairman Paul Sarlo today said lawmakers need to begin the process of overriding Governor Christie’s veto of bipartisan legislation he sponsored to enact a new state credit.
According to data compiled by real estate trend-watcher Otteau Valuation Group and reported in the New York Times, New Jersey home contract signings dropped to their lowest point in six years after the federal tax credit program ended at the end of April. The state’s existing inventory of homes priced under $400,000 has jumped 48 percent – to 13.4 months’ worth from 9 months – and the stock for homes priced between $400,000 to $600,000 has increased 22 percent to 11.6 months.
However, Otteau’s reported inventory for houses priced from $600,000 to $2.5 million actually fell, and was only slightly higher for houses priced at more than $2.5 million.
“The buyers who stand to gain the most from a tax credit are the middle-class families who are looking to gain a foothold in New Jersey and raise their families here,” said Sarlo (D-Bergen). “With no other incentives out there, middle-class homebuyers are giving up. The Governor’s veto of this tax credit sends a message to middle-class buyers and sellers that they really aren’t his concern.”
The Sarlo legislation (A-1678/S-692) would have established a one-year window for home buyers to claim a maximum $15,000 tax credit from their purchase; 75-percent of the credit would be directed to new home purchases to stimulate the moribund construction industry with the remainder dedicated to sales of existing homes.
Sarlo noted that even though the US Department of Commerce released figures yesterday that showed a national increase in new home sales, the 330,000 purchases still marked the second-weakest month on record and a nearly 75-percent drop from five years ago.
“Getting buyers back into the market will have ripple effects up and down the entire economy,” said Sarlo. “Putting a home into someone’s price range impacts everyone from builders to hardware and home improvement stores to the kid down the street who mows lawns. If we really want to spur the economy, we need to override this veto.”
Sarlo said he will discuss with Senate President Sweeney the possibility of the Senate taking up a veto-override vote. The bill had passed the Legislature by veto-proof tallies of 38-0 in the Senate and 67-8 in the Assembly.