Posted by & filed under Buying, For Sale or Rent, Selling.

21 Hillside 21 Hillside Ave in Westwood New Jersey is my newest listing for sale.   This is a 3 bedroom split level home offered at $479,000.  You can see it this Sunday at the open house from 1 to 4 pm.  It’s on the market for sale because the seller moved near their daughter.

21 Hillside Ave

21 Hillside Ave is a traditional split level home.  This means that the living room, dining room and kitchen all on one level.  You’ll find all 3 bedrooms upstairs.  There is a private half bath in the Master Bedroom and a full bath off the hallway on this level as well.

Since he garage is a full sized 2 car garage, you have plenty of room for storage.  It’s also truly attached since you can go directly inside from the garage.  You’ll find a generous basement one level below.  One side is the rec room and the other has the laundry/storage/utility areas.  Because this is a traditional layout, it has the the benefits of this style.

Traditional splits were really the first homes to give people an open feeling of space.  Later on bi-levels came in but the open space layout really began with split levels beginning mainly in the 1950’s here in Bergen County.  Additionally, because it faces west, voluminous light pours into the first floor.

21 Hillside Ave in WestwoodBackyard

Lot size is approximately 75 x 129.  It’s easy to appreciate how deep this lot is when you look at the rear yard.  With a gentle up slope, the rear yard is nothing short of huge.  Add in a patio across the back of the house for an ideal summer, fall and spring outdoor setup.  Imagine family parties, barbecues, touch football or just playing catch with baseball mitts.  There is more than enough room here.

It may surprise you to see that there’s no separation from your neighbor’s yard.  People here are friendly.  Unless someone has a pool or wants more privacy, walls aren’t built between houses.

Westwood

What do people want today in a house and community?  Westwood has it all.  Because this is a decidedly small town, Westwood defines small town suburbia.  This is a quiet neighborly town with a great school system, terrific business district and a 1 hour commute to work in Manhattan.  Let me say a word about commuting.

21 Hillside Ave in Westwood NJWe are in a Covid 19 world.  As a result, commuting everywhere has changed.  Westwood is no exception.  The bus that ran on Washington Ave is temporarily not running.  While you have both a bus and train commute, schedules have dramatically changed.  To get to either bus or train means you have to walk only 15-16 minutes to Broadway.  Once the Washington Ave bus line returns, then the bus is only steps away.

Schools are regionalized with The Township of Washington forming a powerful district.  For such a large District, having SAT average scores in the high 500’s is impressive indeed.  All the families I’ve sold homes to in this District have told me that they are very happy with their children’s school.

Westwood’s business district is one of the largest in Bergen County.  There is a wide variety of stores and restaurants here.  The town is renown for it’s many fine restaurants.  P.J. Finnegan’s, The Iron Horse and The Melting Pot have been around for generations. There are too many others to mention.

My favorite store here is Bergen County Camera.  Owned by 2 brothers who love photography, this is the best camera store you’ll find in the entire Bergen County area.  Nothing else even comes close.

21 Hillside Ave offers you a great house with a terrific yard.  All this in a quiet suburban town with great schools, a good commute and excellent downtown.  As they say, it’s the whole enchilada!

Posted by & filed under Buying, For Sale or Rent, Selling.

7 Rockwood Place in Edgewater is back on the market for the silliest of reasons.  I believe that this was an impulse purchase.  When you buy a house on impulse, it’s often the case that you regret the purchase.

How The Offer Came About

Because 7 Rockwood Place was listed for sale on July 7th, the first open house was Sunday, the 12th.  As a result, I had the time to do extensive marketing,  In spite of extremely hot and humid weather, the open house was a success.  Many buyers came including the couple who made the winning offer.

They were working with an agent I know.  He was a bit surprised to learn they’d come but told me he’d contact them and get back to me.  When we spoke again he explained that he was sending in an offer.  We negotiated to a place where both sides were happy and went on to finalize things through the attorneys.  Sounds pretty normal, doesn’t it?

Edgewater, Garages & Driveways

If you don’t know Edgewater, it’s all about location.  Edgewater is on the edge of the water – the Hudson River to be exact.  It’s also immediately south of the George Washington Bridge to Manhattan.  A ferry to Manhattan takes 10 minutes.  Part of what’s known as the Gold Coast, this former factory town is now filled with luxury condominium complexes.  Builders routinely construct modern homes and duplexes that fetch $1-2+ million.

Because Edgewater was a factory town, there is a good number of small single family homes.  We think of these as charming and quaint today.  Since many do not have a driveway let alone a garage, 7 Rockwood Place is uniquely valuable with both.  There is a full sized 2 car garage and wide driveway.  Apparently this feature is what drove the buyers to my listing.

7 Rockwood Place is Back on the Market

While they bought a feature, they didn’t buy a home.  As a result, I believe that they regretted the purchase and used the home inspection contingency to cancel the contract.  After all as long term and frequent Edgewater homeowners, they know the market very well so there should be no surprises.

This is unfortunate for everyone.  Imagine spending time on a purchase that you really don’t want.  It’s an expensive mistake too.  There’s the cost of the home inspection and your attorney.  This is also very unfair to the seller.

The Lesson For Home Buyers

I know that many home buyers go to open houses on Sundays.  It’s a great idea when you are just beginning.  However it can backfire on you when you are serious.  In this case it did.

Seeing a home with your Realtor is much better than going out on your own.  I point out so many things that my buyers miss when I show a house.  It’s one thing to read about how to inspect a home you’re viewing.  It’s completely different when I tell you which company went out of business because their panel boxes failed.  Or why termites really do come into a house (it’s not because of wood).

I feel that had these buyers asked their agent to meet them at 7 Rockwood Place, 1 of 2 things would have happened.  They would not have made an offer or if they did, it would be based on more than a driveway and a garage.

Find a great real estate agent who has your best interests at heart.  Let their experience and training help to guide you to the house that will be your home.  Use the web but never dismiss the value of what a great agent brings to you.

Posted by & filed under Buying, For Sale or Rent, Selling.

new jersey realtorsJune sales showed a strong recovery according to data just released tonight by New Jersey Realtors.  I’ve been using their housing data for years and June’s real estate market report is very encouraging.

Monthly Indicator Report

Published every month, the Monthly Indicator Report is an excellent snapshot of how the housing market is doing.  Figures are for 1 year back (Monthly Snapshot) and a comparison to the month before (Indicator Report).  Because both views are important, let’s take a look at them now.

Monthly Snapshot

To compare from 1 year ago we have the following:

  • Closed Sales are down 21%
  • Inventory is down 41%
  • Median Sales Price is up 5.3%

This shows the effect of a tremendous drop in inventory.  While inventory is down 41% demand is so strong that sales are down roughly by half.  That’s quite an accomplish.

Monthly Indicator

Let’s look at how June compares to May by looking at the closed sales:

  • Single Family sales are down by 17.3%
  • Condo/Townhouse sales are down 32.5%
  • Adult Communities are down by 34.5%

Because this is only half of the story, it’s easy to think the market is tumbling.  Not at all.  Here are median sales price figures:

  • Single Family sales are up 1.7%
  • Condo/Townhouse sales are up 2.6%
  • Adult Communities sales are up 4.5%

The Bottom Line  June sales

I love sales data because it so clearly demonstrates what’s going on.  In the face of fewer homes for sale we have a strong, rising market.  Higher median prices are a result of more high end sales and fewer low end sales.  To put it in plain English, the market is appreciating.  Additionally this strength runs deep from single family houses through adult communities.

It is quite obvious that June sales showed a strong recovery is underway.  While it’s true that our historically low mortgage rates substantially contributed to this recovery, the lack of inventory is a near equal factor in my view.  I bet when I crunch Bergen County figures on August 1st, the figures will be just as strong if not stronger.  Bergen County is one of the primary locations where NYC residents are fleeing to due to Covid 19 fears and the civil unrest there.

Where we stalled in March and April, began to run in May and are galloping in June.  I’ll be back to you soon after the 31st with Bergen County’s figures.

 

Posted by & filed under Buying, For Sale or Rent.

How to get that house in 2020How do you win in this real estate market?  It takes more than learning about homes and how to write up an offer.  What’s required is a full preparation.  This is because when you find the house you want, you must act forcefully and immediately.

If you read what I wrote in June, you’ll understand why this market is tough for you.  Since then it’s gotten tougher.

Large scale NYC rioting has created a near panic to get out.  Mortgage rates dropping to historic lows propelled renters off the fence and into home buying.    As a result, there are more home buyers while the number of homes has stayed the same.  Ouch!

How do you win in this real estate market?  You think and act strategically:

  • Think like a seller
  • Be a solution
  • Get Ready
  • Move fast

Think Like A Seller  how to win in this real estate market

Thinking like a seller determines your strategy.  Figuring out what a homeowner is looking for tells you how to approach a seller.  So what is a home seller looking for?

  1. Highest price
  2. Best terms
  3. Certainty

Highest Price

Use an escalation clause in multiple offer situations.  Actually, use it anyway in case another, higher offer does come in.  Escalation clauses protect you from being automatically kicked out when you would have gone anyway.  You offer, for example, $100 on a $100 house.  Someone comes in at $103 and you lose.  With an escalation clause, you’ll go up to $110 (because the house is worth that much to you) in $2 increments.  Here you’d get the house for $104.  (The seller must show you the other too.)  You’re telling the seller that you’ll give them $2 more than anyone else.  That’s how a seller sees it.

Best Terms

Some agents advise eliminating inspection and mortgage contingencies.  I don’t because this is too dangerous for you.  It’s still possible to let a seller feel they have the upper hand while protecting yourself.

Tell them you won’t ask for the first $1,000 in repairs found by the home inspector (structural/environmental issues excepted).  My experience is that home buyers don’t ask for minor repairs figuring they can fix it themselves for a lot less.  Additionally giving up $1,000 (or more depending on the home) is less than having to go up $3-5,000+ in price.

You can also protect yourself with a home warranty (around $650 for 1 year after closing).

On the mortgage, get fully pre-approved by not 1 but 2 different legitimate banks.  Don’t worry.  This won’t crash your FICO score.  Click this link to learn why.  Send in 2 pre-approvals not 1 like everyone else.

Certainty

Send the homeowner the following with your offer:  the name and contact information of your seller, title company and mover.  1st time home buyerBecause listing agents aren’t fond of certain inspectors, don’t name them.  Say you have 3 selected and will use the one who’s available on the date needed.

Give the seller a range of moving dates.  Let them know you’re ready to move when they are.

Send in a generous initial deposit by check. – use a PDF copy of it – with the rest coming 3 days after acceptance.  Prove these funds are on deposit with a PDF of the bank account (account # crossed out).  If the transaction falls apart, you get it back so why not?  NJ trust account law is extremely strict after all.

How Do You Win In This Real Estate Market?

You win by giving a seller more than everyone else backed up by documented proof.  You are reliable, verified peace of mind.

Let’s not forget the value of a buyer’s letter to the seller.  Make yourself more than a number on a contract.  Get the seller to bond with you emotionally.  Letters from buyers can be a determining factor.

Imagine you’re selling your house.  You get several offers.  One comes in completely prepared with the full down payment upfront, confirming documentation and a beautiful letter from the buyers.  Which one would you pick?

 

 

 

 

Posted by & filed under For Sale or Rent.

55 N BrowningCome to my open house at 55 N Browning Ave in Tenafly this Sunday from 1-4 pm.  This home has been expanded a bit upstairs.  As a result, you have 3 bedrooms on the 2nd floor and 1 on the first floor.  There’s also a full bath on each floor so this is a 4 bedroom 2 bath cape cod style house.  Asking price is $495,000.

Since this is summer, you’ll love the central air conditioning.  Winter is not forgotten however because the living room has a fire place.  Outside you’ll find a generous patio in the back yard plus the basement has been finished.  This is truly a home that fits every season of the year.

Like so many homes built in the 1950’s and 1960’s, the heat is fueled by natural gas and the system is forced hot air.  Additionally homes of this time were built with beautiful oak hardwood floors.  55 N Browning does as well and they are in great condition.  You’ll find that the kitchen has been updated with wood cabinets, granite counter tops and stainless steel appliances.

Quiet Street & Great Commuting

55 N Browning Ave is located in a quiet neighborhood.  The street is slightly narrow making it inconvenient for motorists to use as a pass through between W Clinton Ave and Riveredge Road.  It’s also terrific for commuting to New York City too.

NYC express buses coming down Knickerbocker Road must turn onto Riveredge Road.  This is a 5-6 minute walk away.  Buses stop at this intersection which is literally 2.5 blocks from your front door.  Both NJ Transit and Coach USA express buses run through this intersection on their way to the 41st Street Port Authority Bus Terminal in Manhattan.  Commuting couldn’t be easier.

Tenafly

Tenafly is among he most in demand locations in the entire New York City metropolitan area.  It has one of the most prized school districts in New Jersey.  Tenafly High School students achieve the highest SAT scores in Bergen County and almost all of them go on to 4 year colleges.  This is one of Bergen County’s jewels because it has both a high scoring school district and excellent commute to work in NYC,

Tenafly has a large business district with everything you’d expect.  Have fun going to our many outstanding restaurants offering a variety of cuisines or a quick meal at the diner.  We have both a big chain supermarket and Kosher grocery store.  Fast food includes pizza, Greek and sushi.  There’s also a superb cheese and gourmet food store.  You can pretty much get everything you need right in town.  Tenafly was my home over 25 years.  I loved living in Tenafly and you will too.

Sunday Open House

Come to 55 N Browning Ave this Sunday to my open house from 1 to 4.  Laura Latrenta will be there with me.  We will use safety protocols of course too.  This is truly an opportunity to get into a nice home in a great town with an excellent commute.

Posted by & filed under Buying, For Sale or Rent, Uncategorized.

your home is your retirementYour home is your retirement because it does several things for you all of which are good.  I’m going to show you just how important a home is to your retirement.

Slow and Steady Wins the Race

Remember learning about Aesop’s fables when you were young?  Every fable was a lesson in life.  One of the most well known is a race between a tortoise and a hare.  The proverb of slow and steady wins the race comes from this fable.  The moral of the story is that inconsistent behavior never wins against purposeful, steady action.

A house represents slow and steady and a race well won.  This is because after 30 years of paying your mortgage every month, you own your house free and clear.  Almost all of us will never be able to save as much as a house is worth any other way.  Because we see the value in owning our own home, we pay our mortgage and win the race by the time we retire.  As a result, this is one of the ways your home is your retirement.

Homes Grow In Value

Homes do grow in value over the years.  While I realize not every house has fully recovered from the Great Recession, that was just over 10 years ago.  Real estate is a cyclical industry that moves with the economy.  It’s never up or down all the time.  As we cycle through the years, the long term pattern is positive.

According to the US Bureau of Labor Statistics, a home bought in 2000 costs 59.49% more today.  If you paid $250,000 for a house in 2000, it would be worth $398,717.63 in 2020.  Think about that for a moment.  Have you saved up $149,717.63 in your piggy bank since 2000?  Hmmm…..I didn’t think so because I sure haven’t.

Additionally, your home give you this gain without sacrificing your lifestyle.  It just happens while you’re living in it.  This is another way your home is your retirement.  In the example above, anyone who bought an average family home in 2000 would have a nearly $150,000 gain by just living in the house.

Enforced Savings and Appreciation

Because buying a home is a long term proposition, you get the benefit of enforced savings and appreciation.  Paying off your mortgage bit by bit every month is like putting money into a savings account.  You are literally paying yourself.  This is because once the mortgage is paid off, you have a large sum of money you would never have any other way for your retirement.

Additionally home values rise.  As we saw with the $250,000 house bought in 2000, there was a nearly 60% gain by 2020.  While there may be better investments, for almost all of us we’d never win this big any other way.  While you build equity by paying off the mortgage you’re also gaining appreciation.  This is why for almost all of us, your home is your retirement.

Posted by & filed under Buying, For Sale or Rent, Selling.

7 Rockwood PlI have just listed an Edgewater home for sale at 7 Rockwood Place.  It’s going into 3 MLS systems tomorrow so I can give you an early notice as a coming soon listing.

The reason for the sale is simple.  Edgewater homes are almost always small.  The owner expanded her family so she needed a larger residence.  Because she didn’t want the hassle of getting a house ready for showing, she moved and then put this home up for sale.  As a result, showings can easily be tailored to your schedule.

 

7 Rockwood Place

7 Rockwood Place is a single family home on a small dead end street.  Edgewater home for saleEdgewater homes are typically small with little or no parking.  This home has the luxury of a 2 car garage which is huge here.

Another plus are the updates.  Both the kitchen and 2nd floor bath have been modernized plus the windows are all vinyl  replacements.  The 1st floor has an office space at the back with windows looking out onto the Hudson River.  It’s really a nice sunny space for working remotely.

The living room is quite large and there’s a full bath on the 1st floor as well.  All you need is a sleeper sofa and you’re set up for overnight guests.  Upstairs is a front Master Bedroom and 2 nice tandem bedrooms plus the redone main bath.  This bath has a whirlpool tub for melting your cares away.

Edgewater home for saleThe basement is unfinished and provides excellent storage.  There’s also a laundry room and access to the rear deck.  The dining room is an open space to the custom designed kitchen where you’ll find a center island and plenty of cabinets.

You’ll also find a SubZero refrigerator, dishwasher and microwave.  The working triangle is ideal making this a great kitchen for both a serious cook and for hanging out at the breakfast bar center island.

Edgewater

Edgewater is always so popular because it’s on top of the George Washington Bridge and has a ferry to Manhattan.  This is a Edgewater home for salewonderful commuting location and schools are great too.  While it was a factory town in the early 20th century, Edgewater has become a mecca of development with new construction happening constantly and sophisticated shopping malls.  Whole Foods, Starbucks, Barnes & Noble are just some of the stores you’ll find along with many of Bergen County’s best restaurants.

Rockwood Place is a small, 1 block long street so it’s a very private location.  Because it’s 1 block from River Road, location is also great for so many other things too.

Commuting to Work in New York City

You can walk to the ferry in 15 minutes and once aboard, it’s only 10 minutes to Manhattan.  If you don’t want to walk, there’s a free shuttle service for you..  If you’d rather just take the bus to the Port Authority Bus Terminal, New Jersey Transit has this option too.  Take NJ Transit Bus # 158.

NY Waterway FerryWhether you’re driving across the George Washington Bridge, taking the mid town ferry to 39th Street or the bus to the 41st Street Port Authority Bus Terminal, Edgewater is an easy commute.  Add in all the wonderful restaurants and stores for an unbeatable combination.  No wonder Edgewater is in high demand.

Come take a look at this quaint colonial home that offers you a wonderful, peaceful location in a dynamite town.

 

 

 

Posted by & filed under For Sale or Rent, Renting.

I have a 2 bedroom apartment for rent in Englewood NJ for $1,875 per month.  It’s located at 373 Knickerbocker Road in between Ivy Lane and Hudson Avenue.  This is the Manor Area of Englewood – the most prized location on the west side of town.  Let’s take a look at this apartment:

373 Knickerbocker 373 Knickerbocker Road

373 Knickerbocker Road is a top/bottom 2 family house.  This is a 2nd floor apartment with 3 very special features.  You have a pull down staircase to attic storage, a wonderful 3 season porch and central air.

You can enjoy this room most of the year since the windows are double pane replacements.  It’s an extension to the back of the house.  As a result, it’s like your own adult tree house.  Imagine how peaceful this room is.  You are literally high off the ground surrounded by large tree branches.

 

Great Interior Space  2 bedroom apartment in Englewood

The living room is 20 feet long and just over 11 feet wide.  Because it’s so big, there is room for a combination dining and living room.  You have a kitchen that’s truly eat in sized as well.  Bedrooms are Queen sized and the ceiling height is fine.  Because there are a lot of windows, this is a very bright and airy apartment.  Sunlight sparkles on the beautifully polished hardwood floors.  Simply put – this is a great apartment to call home.

Eat In Kitchen

Kitchens are important rooms.  Most apartments in this price range have small aisle kitchens.  That’s not the case in this 2 bedroom apartment for rent.  You get a full sized kitchen with enough room for a table and chairs.  Included is a dishwasher and a refrigerator.  Cabinets are plenty plus counter space is terrific.

You get to the kitchen through the living room so it’s ideal for a dining/living room configuration.  The 3 season porch is right off the kitchen which is great.  Make yourself a cup of tea and relax in the porch.

Englewood NJ apartment for rentLocation

This is a very convenient location in the prestigious Manor Area of Englewood.  If you’re not familiar with this part of town, I wrote an article recently about a home here that I sold recently.  In the article I write about this district.

You are no more than a 1 mile walk to so many things – houses of worship, local shopping where there’s a Walgreens, elementary, middle and high schools plus commuter buses to NYC.

This is a very sweet 2 bedroom apartment for rent in a prestigious location.  The only reason tenants have left is because they had to.  Everyone has loved living here and you will too.

Call or text me at 201-741-8490 to see this great apartment.

Posted by & filed under Buying, For Sale or Rent.

mortgage denialHow do you handle a mortgage denial?  What happens next?  Do I get my deposit back?  Why did this happen?

Mortgages are denied for a variety of reasons.  Is this a common occurrence for home buyers?  Not at all.

There are exceptions.  For example, a buyer lost their job.  You can’t get a mortgage if you have no income.  This is a rare occurrence because home buyers commit to a house when they are financially secure almost always.

A mortgage denial is a disaster.  This just happened.  Let’s start at the beginning so you can learn from this.

The Buyers

The home buyers are both doctors.  They are early in their careers because one is on a fellowship and the other is a hospital resident.  Credit scores are excellent plus they have a good down payment.  Since they came to the US from overseas, they both have visas are planning to become US citizens.

Doesn’t this sound great?  Solid verifiable income, excellent credit and a great down payment.  What could go wrong?

Shopping For A Mortgage

Although I sent them my article on why mortgage rates don’t count, they went rate shopping.  Read this article and you’ll understand why this is a mistake.

Shopping for a mortgage should involve more than the rate of the day.  There can be a huge disconnect between the banker and loan processing.  Problems found that can be easily handled early on become last minute emergencies.  Bankers I recommend are on top of their loans and work directly with processing.

Some folks dismiss the value of a banker relationship.  They shop online exclusively.  Often that online “bank” is really a  referral service.  Did you know that Weichert Financial is one of the real banks behind that online portal?  Think Lending Tree, Rocket Mortgage etc.  Your fees might be higher because referrals have referral fees.  Oops!

A Mortgage Denial in the Making

My couple went with Chase because the man they spoke to quoted them the lowest rate that particular day.

One of their visas is not accepted by Chase.  If they had focused on finding a great professional, this issue would have been identified 1-2 days after formally applying for their mortgage.  Because the man they chose was basically an order taker, he had no idea for nearly 1 month that there was a problem.

During that time the buyers spent about $3,000.  They hired an attorney who spent hours working for them.  Additionally there was $1,000 on home inspections, $750 for a survey and around $350 for a title search.

Worst of all is what this did to the buyers.  Imagine how upset they were!  Think about the seller too with their house in moving boxes ready to close.

There is nothing you can do when your mortgage is denied.  All of your expenses are lost.  You do get your deposit back once you send the bank denial letter to the seller.  While this is a relief, it doesn’t make you feel better.

Why Did This Happen?

This didn’t happen because Chase doesn’t accept a type of visa.  This happened because my buyers chose a mortgage rate, not an experienced banking professional.

Weichert Financial Services is working hard right now to fix this mess.  They were supposed to close soon.  That won’t happen but Weichert Financial has found a way to fund their mortgage at a normal competitive rate in a few weeks.

Whether you’re buying a house or finding a landscaper, always make sure the person you hire is an experienced, capable professional. Buying a home is emotional.  I’m sure my customers were advised by their family or friends to go to the local branch office.  That’s not how you find the best mortgage banker.  Ask me; I know several. 

Posted by & filed under Buying, For Sale or Rent, Selling.

why the future of housing is positiveThe future of housing is positive because of several fundamental reasons.  While the US economy is officially in a recession, this recession is very different.

This Recession is Different

How do you define a recession?  When you have 2 consecutive quarters of negative economic growth you’re in a recession. This one, however, is different.

Begin with the fact that it’s man made.  There was no structural economic reason for this; it was a reaction to Covid 19.  The best economy ever was shut down.  This never happened before.

During the Great Recession unemployment went from 5% to 10%.  In a matter of weeks we went from 3.6% to 13%.  TARP cost $475 million in the Great Recession.  So far this year stimulus packages are at $2 trillion.

While unemployment is improving, it won’t be 3.6% again this year.  Additionally, we don’t know how much more the economy will need.

Interest Rates Will Stay Low

Today the Fed will issue a report as it closes it’s 2 day meeting.  Don’t expect much to change.  We’ve just had our biggest drop why the future of housing is positive in inflation since 1947 according to CPI data.  Bond yields remain anemic and the Fed is at zero.  I bet it stays there.

Mortgage rates are correspondingly low and forecasts are for this to continue throughout next year.  CNBC’s Steve Liesman as well as guests on Squawk Box this morning all say that rates will remain low until 2022.

You don’t have to be an economist to know that low mortgage rates are a stimulus for housing.  Every 1% drop in rates = 9% more buying power (a $600,000 buyer becomes a $654,000 buyer).  We are more than 1% lower than in January.

The Inventory Crisis is Real

The inventory crisis is real.  The New Jersey MLS just crossed the 2,000 mark with 2,034 homes for sale.  This is half of what you’d expect at this time of year.  I believe there are 2 reasons for this:

  1. Baby Boomers
  2. Covid 19

Baby BoomersBaby boomers are not moving out of their homes as quickly as generations before them.  People in their 70’s and 80’s without a major illness happily stay in their homes.  Their mortgages are paid off and with the high cost of rentals, it’s usually cheaper to stay put.  Since Boomers are 2nd only to Milennials in size, this has a major impact on available inventory.

Covid 19 panic caused many sellers  to withdraw their homes from the market.  People have calmed down since mid March and houses are coming back on the market.  However there’s still a good number waiting for next spring.

This is Why The Future of Housing is Positive

MilennialsCovid 19 only made worse an ongoing inventory crisis fueled by Boomers staying in their homes longer.  When Covid 19 concerns no longer exist, we’ll still have low inventory.

Consider the facts.  Milennials are the biggest demographic and they are 24-39 years old.  As they start families, they naturally move out of their city apartments to Bergen County and other suburbs where they have space, a yard and good public schools.  Boomers, the 2nd biggest demographic at 56-76, are not quick to move.

What do you have?  Increasing numbers of buyers (Milennials) with decreasing numbers of sellers (Boomers).  This will last for the next 15 years at least.

Not fun for buyers but great for sellers.  Even when mortgage rates go up in the future, there will still be more buyers than available homes.  This is why the future of housing is positive. This is no bubble.  This is reality.