We’ve been through a rough few years and another big change is underway. Because I‘ve had so many calls about the Bergen County real estate market, I wanted to reach out to you today.
Since moat of you you bought your home, you’ve had a truly amazing growth in value. Buying your own home has been the best decision you made for yourself. It’s given you a tremendous amount of wealth because your home is worth so much more than it cost you.
Will you lose some value over the next few years? Yes, but should you panic over this? No, absolutely not. Why? Because you’re so far ahead that any loss will be a fraction of your gain. The Bergen County real estate market has always been resillient.
Real estate is a cyclical market. It mirrors the economy pretty much of the time. It goes up and it goes down but over the long haul, you’re ahead.
How bad will this be? Not as bad as you’d think because of 3 key factors:
- This time around buyers had to qualify for a mortgage.
- Most homeowners have positive equity
- The inventory shortage isn’t going away quickly
The last crash was caused by truly irresponsible lending practices. So many people who wouldn’t qualify for a mortgage today got one. When a job was lost for a while or hours cut back, they couldn’t pay their loan.
For most people now, it will be very different. They’ll be able to sell their home and walk away with cash. This was rarely the case before. Remember all those short sales and foreclosures?
Additionally, the inventory shortage will moderate slowly. Real estate is, after all, very much a function of the law of supply and demand. Right now, homes are still selling briskly and pricing is strong. I know this will change but we’re not going off a cliff.
What does this mean for you? Depending on how bad the coming recession is, you’ll be fine if you stay in your house for the next 5-7 years. The market will come back. No doubt about it.
I am projecting a correction, not a crash with a 7-12% loss of value and very possibly less over the next 2-3 years. Beforehand, Bergen County went down overall 23% with some towns as much as 30%.
Rest easy if you have no plans to move. The mortgage rate you have is no longer possible too. Stay put – keep enjoying your home and ignore the hysteria you’ll see in the news.
If, however, you plan to retire and want to move to a more manageable rental or purchase, I’d advise that you get your home on the market much sooner than later. Delaying will cost you a lot.
Have questions? Want to discuss this further? Would you like market updates periodically? Call me at 201-741-8490. It’s always nice to hear from you too. Also, please contact me if you know anyone who wants to move. Have A Great Thanksgiving!