Bergen County real estate has stabilized. This was my projection last year and I am very happy to say that I was right on target. What I’d said and written was that by the end of 2009 the market would stabilize. It has done exactly that.
Our housing market is improving. New Jersey MLS data, bank appraisers and housing reports all say the same thing: We have clearly bottomed out and are in a period of stabilization. Because so many different points of view agree, this must be the case.
Today’s ratio of homes for sale to under contract is 4 to 1; early in the year it was in double digits. This is quite a recovery. Appraisers and market analysts teach us that when the ratio is less than 5 to 1, we are in positive territory. Because of this ratio it is clear that we have turned the corner and the market is moving forward.
Last spring Bergen County was classified by the mortgage industry as an “area in decline” meaning that values were falling. Appraisers were deducting 1% per month of value; if a home appraised at $200,000 and was closing 2 months later, the appraisal was fixed at $196,000. Bergen County’s housing market is no longer classified as “in decline” and a Valley National Bank appraiser on Monday told me that price depreciation has ended.
Jeff Otteau in his latest real estate newsletter termed the NJ real estate market’s performance “remarkable” and forecast continued improvement. The monthly Credit Suisse agent survey said that for the first time in a long time a majority of agents reported positive home buyer traffic and houses selling quicker.
With all time low interest rates, prices no longer dropping and falling inventory levels, there should be no surprise to find that Bergen County real estate has stabilized. We are moving toward a positive market after quite a rough ride.
If you are a home buyer and qualify for the first time home buyer tax credit, listen up. Time is running out for you to find a home. You must buy a home by November 30th. Because getting a mortgage these days often takes 45 days, many buyers feel pressured to make a decision now. As a result, first time buyers who qualify for the $8000 Tax Credit are scrambling to get into contract now.
I am, however, wondering if some of you aren’t making a mistake. Rushing into things is never the best strategy. So I ask you to consider another option. Is the $8,000 tax credit causing you to overlook even better short sale opportunities?
$8000 is nothing to sneeze at but a buyer may be missing out on a home value that far exceeds it. Short sale opportunities are still available. There are many homes for sale with steep discounts because they are a short sale. You may find a house that is a better “fit” for you in a short sale than trying to buy a home that you really don’t love just because of the tax credit.
In the New Jersey MLS this morning, I found that of the 3,796 single family homes for sale, 352 are a short sale. There are also many that are described as potential short sales. For our purposes, let’s say that a bit more than 10% of the Bergen County housing market is a short sale. This figure has been pretty constant this year. The bottom line is that there are other opportunities out there.
Even if you can’t find a home that works in time for the tax credit, you shouldn’t go into contract on something that isn’t the right home for you and your family. Opportunities come in many ways. Call me at 201-741-8490 if you’d like to discuss this or just have a question.
Bergen County has a primary and a secondary utility company for electric and gas service. Public Service Electric and Gas is our primary. I love this company. I have lived in Bergen County for most of my life and they have never disappointed me. Orange and Rockland provides just electrical service to northern Bergen County.
One of the special advantages of living in Bergen County, at least from my point of view, is Public Service Electric and Gas. Go to their website at http://www.pseg.com where you’ll find excellent information and their terrific Worry Free Contract system.
PSE&G has very reasonably priced maintenance contracts on your gas and electric heating, air conditioning and appliances. I have always recommend this to my clients for at least their gas furnace.
This is one of the best values you can find in Bergen County. You can sign up for this in advance. As a result, it starts the day you buy you home. Worry Free Contracts is especially great for your gas furnace. This furnace maintenance program costs $5.90 per month for parts and labor. It includes a furnace check and cleaning every year.
Go to their Residential Worry Free Contract Enrollment and scroll down the page toward the bottom. This is where you find the a la carte menu if you don’t need the bundled options at the top of the page. The cost is billed monthly on your utility bill which makes this affordable service even easier to handle.
It just makes sense, especially now that the heating season is almost here, to get yourself protected. I always recommend to my clients who have gas furnaces in their home that they at least get this coverage. It’s simply the best deal around at an annual cost of $70.80 for parts and labor with no deductibles.
When you buy a home the last thing you need is an unexpected bill for a furnace repair. $5.90 per month gives you peace of mind. Trust me – it can happen any time. Years ago I had a 3 year old furnace that stopped working because the circulator pump broke. PSEG came in a few hours and replaced it. No problems after that and it was well worth the $5.90 bill that month!
Bergen County, like most other locations, is not an easy place to be a tenant if you have a dog or cat. Unfortunately, too many irresponsible pet owners have made landlords leary of allowing any dogs or cats to be part of their tenant’s family. With the increasing popularity of small dogs and the perception that they are less of a problem, such as a designer dog, you can find that some buildings will allow a dog if it’s less than 30 pounds. However, more and more buildings will not allow any pets at all.
If you are considering a rental in a condominium or co-op building, it is imperative to verify what the regulations allow. You should never assume that just because you see a dog or cat in the condo or co-op when you’re looking at that it means pets are allowed. Associations change rules and if they forbid pets they often grandfather in those that exist at the time.
What I suggest to my rental clients in situations where there are no iron clad rules forbidding pets is to offer an additional security deposit for their animals. I call it a pet security deposit and often this allows a pet owner to secure the rental unit they want. Sometimes a landlord welcomes dogs and cats.
Here’s a new rental listing by Alexis Schmid of my office with a landlord who allows cats and dogs. It’s a 2 bedroom 1 bath rental apartment in this neat two family home. At $1,300 per month in the town of Westwood, NJ, it won’t last long. Welcoming pets is a smart idea – the landlord will get his apartment rented quicker and probably won’t have any vacancy cost. If you are in the area, have a dog or cat and are looking for a 2 bedroom apartment, call Alexis at 551-265-5929 before it’s gone.
While national foreclosure rates rose 15% during the first half of 2009, in New Jersey foreclosures are dropping. NJ foreclosures are down by 30% for the first six months of 2009 compared to the same period in 2008 according to Realty Trac. In May, the New Jersey Judiciary announced foreclosure activity for the first 4 months of 2009 was down by 20%. These figures certainly point to an improving housing market in New Jersey.
A lot of credit is being given to the programs New Jersey brought out in January to help homeowners avoid foreclosure. A special foreclosure mediation website was put up just to help owners avoid foreclosure by the State with a toll free hotline. The Star Ledger reported that although few homeowners were helped, public awareness occurred. Because the public has been made aware of this issue by these programs, many homeowners took stock of their situation. The impact was significant. Many homeowners too action to avoid foreclosure.
Another aid has been historically low interest rates. Low rates have allowed people to refinance their mortgage into a more affordable loan. Supporting this is the fact that the New Jersey housing market hasn’t depreciated as badly as elsewhere. Our house values have performed better than national averages.
According to Jeff Otteau, the renowned analyst of New Jersey’s housing market, this makes quite a difference. “The reason that borrowers walk away and mail in the keys is because not only are they having a hard time making their payments, but their houses are worth less than their mortgage balance,” Otteau said.
Bergen County foreclosure rate, as reported in The Record on July 16th, are 1/206. The foreclosure rate for New Jersey is 1/146 and for the US it is 1/84. As usual, Bergen County outperforms the general real estate market.
We can’t predict the future but it’s safe to say that the future will be brighter. it’s also true that a 30% drop in foreclosures will certainly stimulate consumer confidence in NJ housing and that is huge. Any time foreclosure rates are down the impact on real estate will be positive. For Bergen County homes, with it’s consistently superior performance, this is even more the case.
Real estate appraisal rules have changed in major ways. The changes are a response to the financial crisis. It’s an effort to avoid issues in the future that created havoc.
When the Home Valuation Code of Conduct went into effect by Fannie Mae and Freddie Mac on May 1st, appraisal protocols for mortgage loans changed. To protect consumers, loan officers, mortgage brokers and real estate agents can no longer choose appraisers.
Why is this so important? Because the mortgage bank and the home buyer rely on an appraiser’s determination of value; a lot of abuse and fraud has been uncovered. If, for example, an appraiser sets a home value to fit the sales price, that’s obviously wrong.
I just had a short sale listing close; the bank took nearly a 50% loss on a $1.8 million loan. The homeowner had been building a new home for himself. When he gave me his loan amount, I was stunned. There was no way to justify that mortgage loan and yet it happened.
To comply, banks no longer have their own appraisers; they use real estate appraisal services with pools of appraisers from which appraisers are randomly selected. This creates an added expense for the mortgage process and increasingly results in appraisers valuing homes who’ve never been to the area before and aren’t members of the local MLS. Recently my office experienced this.
An office listing had an appraisal that was ridiculously low. Both buyer and seller knew this but the bank, which had to use the appraisal, could no longer justify the mortgage. The appraiser had never been to the area before and used the wrong MLS. Bergen County homes are listed in the New Jersey MLS; the appraiser used the Garden State MLS which has only a few Bergen County listings. Without expert knowledge of the local inventory and no access to all the data, he wasn’t able to do a correct valuation.
Eventually things will straighten out but until it does, there will be higher costs to obtaining a mortgage for home buyers and for both buyers and sellers, there will be appraisals that unfairly cancel mortgages. We did need a change in appraisal rules but I feel it could have been better done.
Bergen County homes have done better than most housing markets in the US. They may have done better but they have not escaped the economic collapse. As a result our home values have depreciated over the past few years. For many homeowners this has created a horrible situation. Their home is not worth what they paid for it.
For homeowners who need to sell their home, many find it impossible to do so. For others no longer can afford the mortgage payment they don’t have enough equity to refinance or sell. Depreciation has made their home worth less than the current market value. Because of this they are faced with foreclosure or a short sale.
To solve this problem with home values the Federal Government has created a solution for some homeowners. This applies to owners who have not dramatically lost value.
On July 1st HUD Secretary Shaun Donovan announced that Fannie Mae and Freddie Mac will begin refinancing mortgages with loan-to-value ratios as much as 125%. This means you can be 25% negative in the value of your house and still refinance. The idea is to try to match the loss of equity to avoid a distress sale. This will work for homeowners who’ve been paying their mortgages and have good credit. The objective is to keep them in their homes.
Keeping people in their homes has a major social impact. It helps to maintain neighborhoods and to stabilize the local real estate market.
While this is just part of the Bergen County housing market, it allows many people to keep their home and helps stabilize real estate values by avoiding foreclosures and short sale transactions.
If this works for you or someone you know, get in touch with a licensed mortgage banker. You need a top level loan officer’s help to qualify for this program; if you need a recommendation, just let me know. With falling home values it’s best to act now before it’s too late for you. Call me at 201-741-8490.
Affordable Dumont rocks! It truly is a Bergen County value for buyers. I’ll explain why.
Crunching numbers to analyze the real estate market has taught me a lot. Over the years, I’ve found that the relationship between the number of homes for sale and under contract is a great indicator of how the housing market is doing. When that ratio is 2:1, the housing market is strong.
Ok, I know, it’s 2009 and the sky is supposed to be falling but it sure isn’t in Dumont. Right now Dumont has 50 homes for sale and 31 under contract which is way better than 2:1. Plus the time it takes to sell a home has improved dramatically – 72 days for under contract and 93 days for the 25 sales we’ve had over the past 4 months. No matter how you look at it, Dumont homes are rocking! There are several reasons for this.
Dumont is affordable. Property sizes are not too big and not too small which results in a moderate sized house. Dumont typically has what most of us would call a normal sized yard with a normal sized house. This means Dumont real estate works for most of us.
Dumont’s school district is very good with a lot of parent participation and a broad range of programs. The town has excellent community services as well. The Borough of Dumont’s Official Website is worth a look – it has a lot of information and shows you the strong community spirit that’s here.
The business district is very active with a good mix of retail stores, services and offices. Major retailers have invested in Dumont such as a CVS drug store, Wachovia Bank and Stop N Shop supermarket.
NYC transportation is great – there are plenty of express buses at rush hour and you don’t have to make any changes. Just grab a seat and read the newspaper on the way to work.
Dumont has everything that most people want, is affordable for first time buyers, can handle the more affluent move up market and is a great place to live. No wonder the real estate market is doing well. This does not, however, mean that prices are going up. They aren’t but they’re not sliding down either. If you’re thinking of making a move into Dumont, as a home buyer you’d be smart to do it sooner than later. Things here have turned positive.
Home Inspections in New Jersey
Buying a home should always include a home inspection. Even if the home is new construction, it’s best to have the guidance of a professional home inspector. In New Jersey, home inspectors are licensed by the State but there’s also another resource for you – the American Society of Home Inspectors known as ASHI.
ASHI was started in 1976 by a group of home inspectors who wanted to set standards of practice and create a learning center for inspectors, buyers, sellers and real estate professionals. Every member of ASHI must take a Standards and Practices training module and agree to abide by their Code of Ethics. Today ASHI is the largest trade organization of home inspectors in the US. I consider ASHI to be a wonderful organization and only recommend home inspectors who are both licensed in New Jersey to perform home inspectors and members of ASHI.
BTW, when you’re on the ASHI website at www.ashi.org, be sure to check out the Virtual Home Inspection
You should always attend your home inspection. It’s one of the most important parts of buying a house plus you’ll learn a lot about your new home. The average inspection takes around 3 hours but this varies on the size and condition of a home. Be sure to bring a pen and pad so that you can take notes during the inspection. The inspector will tell you about the home’s condition and teach you how to maintain various aspects of it.
Home Inspections for Sellers
If you are selling, it’s a good idea to inspect your home before it’s for sale. Pre listing home inspections uncover problems you never knew existed. It gives you an idea of what a buyer will hear too. This is very important for a seller. A major cause of failed contracts is the home inspection. Issues found can frighten a buyer and sellers it personally insulting. This is not the best environment to negotiate to a place that’s fair for both sides. As a result, contracts fail.
Because of this it’s smart for a sellers to use pre list home inspections to fix issues first. Then market your home for sale. Let me know if you need help or have questions.
You need Bergen County homes sales data from the New Jersey MLS so you’re on top of the market.
The New Jersey MLS is the primary multiple listing service for all of Bergen County. They do a simply outstanding job in so many ways. There is comprehensive information on homes for sale as well as statistics on all aspects of the market.
The sales data shows an improving market for homes in Bergen County. The number of days it takes to sell a home has been decreasing since March. If you take a look at the NJMLS Average Days on the Market Graph you’ll see this very clearly. While it’s still taking more than 100 days to get a home sold, we’re closing in on this number. I bet we’ll be under 100 days to get a home sold very shortly.
Take a look at the Average Sold Prices Graph. It shows a definite move up although this time it begins in April. However, this makes sense because almost all first quarter sales come from contracts written during the prior year. What this graph shows it that we’re moving toward an average home sale of $500,000 and that’s positive.
I’m not saying that house prices are going up – prices for homes are not going up. They will actually continue to go down for a while yet but you can only get a rise in the average sales price for a home when more expensive homes are selling. That happens when the real estate market is getting better throughout all price ranges.
First time home buyers have been kept in the market by such things as the First Time Home Buyer $8,000 Tax Credit which, one week ago, was added to FHA backed loans and low mortgage rates. As everyone knows, it takes the first time home buyer to get things moving and it sure looks like this is happening. At least that’s what the New Jersey MLS data shows.**
**These graphs are time sensitive and so the links are no longer active.