Barbara's Blog

Looking To Buy A Home In Essex County New Jersey?

“The Housing Crisis Is Over”, according to The Wall Street Journal this month! Finally, we have some positive news about the real estate market. While some parts of New Jersey have seen as much as a 30% decline since the spring of ’05, I’m happy to report that the Essex Country rail towns of Maplewood, South Orange, Millburn/Short Hills Montclair, Glenridge and parts of West Orange have only experienced about a 10% reduction, due in large part to train accessibility into Manhattan.

What's The Mood Of Buyer's Right Now? We’ve seen a lot of hesitation over the past year, with many Buyers waiting for the market to bottom out, particularly those who don’t have to buy – first time home buyers. Hopefully this news will boost their confidence. The irony is that now really is a great time to purchase a home. We have not seen both price and interest rate combination this low in many years.

How's The Essex County Spring Market Doing? There’s a dichotomy in the market right now. We have a lot of inventory accumulated from Sellers holding on to old prices. As a result there’s more competition between homes. That being said, we’re still seeing multiple bids in some areas, especially Montclair, Millburn/Short Hills and Maplewood Real Estate. Areas in West Orange that don’t have easy Midtown direct access into Manhattan are taking longer to sell, however the Gregory and St. Cloud sections offering Jitney service to the Midtown Direct train line are more desirable, and thus selling faster.

Sellers Are More Realistic In Their Pricing Right Now. This explains why some homes are selling right away and others are lingering on the market. Homes that are priced right and show well are selling within one month, the average number of days on market for Maplewood, South Orange, Montclair, Millburn and Short Hills' homes. Houses that are priced attractively and are upgraded are selling faster than the ones in need of work. While this has always been true, a few years ago, everything sold quickly, whether it was in need of repair or not.  While the well priced homes may be selling faster, it still is a Buyers' market and they're very much in control. We’re seeing that control exercised frequently in home inspection issues. Buyers are asking sellers to address more home inspection items now, and often sellers are giving in, hoping to keep the sale going.  Most Sellers now understand more than ever the importance of standing out amongst the competition, and are paying more attention to home repairs, staging and upgrades before they put their homes on the market. When I bought my house in ’02, there were 12 offers on it and a hole in the garage roof! We never asked for it to be repaired because it seemed minor. Today the seller, would in all likelihood be repairing that hole or offering a credit.

Have We Reached The Bottom Yet?   With homes now priced more in line with current values, the inventory will start to recede. For all you Buyers out there still sitting on the fence don’t wait any longer. And for the ones who are ready to buy, congratulations, you’re purchasing in one of the best Buying markets in our history! 

Selling Your New Jersey Home?   See what homes have recently sold for in Essex County New Jersey Rail Towns.  

I attended Jeffrey Otteau's Spring Workshop this past week.  If you know anything about Jeff Otteau, you know that he's the immient authority on New Jersey Real Estate Market Trends.  Having studied the Real estate market in New Jersey  for the past 40 years, his knowledge is extensive and well supported.  The good news for our "Rail Towns" - Maplewood, South Orange, Millburn, Short Hills, Montclair, Glenridge and West Orange and other Essex County Midtown Direct towns is that we haven't felt the 'sting' of price drops nearly as much as other parts of New Jersy, let alone the rest of the country!  While his calculations put the market down 30% overall in Essex County, the Midtown Direct Towns have only experienced a 10% decline since Spring of '05.  This is largely attributed to easy access into Manhattan.   The bad news is that this decline will continue through '08 and into '09, where it will then level out and remain steady for another 3-5 years. 

So for all you Buyers who think I'll just wait till the end '09, when prices hit rock bottom, you may miss the boat, because historically this is the first time when interest rates and houses prices are low.  The interest rates are going to go up this year so the same investment will end up cost you more a year from now than today.   Additionally, the Economic Stimulus package that President Bush put into effect recently is short lived.  For Essex County the new jumbo rate is $729,750, good through this year.  After December,  it will revert back to the former rate of $417,000.  So for buyer's who's loan amount is above $417,000 but below $729750, they are now in a position to carry only one mortgage at a lower rate instead of having to split into two. 

For Sellers who decide to wait till the market turns around before selling their homes, will be waiting a long time.   According to Otteau, we are going to experience a short burst of activity this Spring between April 15th-May 31st.  This is fairly typical of the Spring market, which tends to dip after May when summer approaches and people tend to go on vacation.    The next hot Spring market may not come till at least 2012.  If you're thinking of selling, this is your window to do it because the market will continue to go down afer Memorial Day.  For anyone who's been in their homes since 2000, you shoud be happy!  Home values in Maplewood, South Orange, Montclair, Glenridge, Millburn, Short Hills and the other rail towns  have increased in value 87% cummulatively since 2000 up until Spring of '05. We've seen about a 10% drop since then.  That leaves a 77% increase over 8 years.  That's an average of over 9%.   

house before 2002, you will still see

As part of President Bush's efforts to stimulate the economy, the recent signing of a bill to temporarily raise the loan amount on Conforming Loans is great news for Buyers who are seeking to purchase a home and Homeowners who want to re-finance. 

Buyers who were financing over the current jumbo limit of $417,000 have had to do a "piggy back" loan - a 1st and 2nd mortage; the 2nd being a home equity line of credit at a much higher rate.  The new law will raise the 2008 limit for loans that Freddie Mac (FRE) and Fannie Mae (FNM) can buy or guarantee to $729,500 based on the median sales price in a specific area.  These types of loans are considered safer investments because they are backed by government-sponsored companies and consequently have lower interest rates.  What does this mean for buyers purchasing in Maplewood, South Orange, Millburn, Montclair, and West Orange?  Though the limit amount in these towns haven't been determined yet, it will be well above the current limit.  I have several clients currently who are very excited about this new bill, which will become effective sometime in April.  It will now enable them to purchase a more expensive home at a much better rate. 

It's also great news for owners who want to refinance and eliminate their 2nd mortgages into one lower payment.  According to National Association of Realtors (NAR) research, it will also allow nearly 200,000 homeowners to refinance and potentially keep their home.  An impact study conducted by NAR recently estimated that the increase in conforming loans would result in as many as 500,000 refinanced loans and could help reduce foreclosures by 210,000. The study also confirmed that over 300,000 home sales would by strenthened by two or three percentage points.  This is also great news for sellers, because it will widen the current buyer pool by enabling buyers to purchase with one mortgage at a lower rate and potentially increase the sale amount of their home.

Selling Your Home - 11 Tips for Proper Preparation

Selling a home an be a daunting experience, especially if it's your first time. But with the right preparation, you can easily increase the likelihood of a sale -- and possibly increase your net proceeds as well.

Here then are 11 low-cost tactics that will enhance your home, inside and out.

1. Make the entrance inviting.
A home’s entrance carries significant meaning, both symbolically and structurally. It’s where the homeowner leaves the outside world behind and enters the comfort and sanctuary of home. Treat it accordingly.

2. Remove clutter.
Clutter (too many appliances in the kitchen, too many pictures and knickknacks on the tables, etc.) makes a home seem smaller than it is. It can also put too much of a personal touch on the house. Clear away everything but a few, well-placed design elements.

3. Clean, clean and clean some more.
As a general rule, you can never clean too much before showing your house. This goes hand in hand with the clutter concept above -- the cleaner a house, the easier it is for buyers to see themselves in it. It makes the house mentally "transferable" from owner to buyer. And it just plain looks nice!

4. Freshen up the rooms.
Sunlight, fresh paint and a well-placed vase of flowers can do wonders for any room -- and for minimal cost.

5. Arrange for space.
Arrange furniture in a way that maximizes space and creates a smooth traffic flow. It might take some trial-and-error, but the spaciousness you create will be worth it.

6. Perform minor repairs as needed.
No how matter how trivial it may seem to you, an item needing repair will send a mental message to buyers. "Gosh, if they didn’t even care to fix that before showing the house, what else have they let go?"

7. Replace outdated fixtures (lights, knobs, etc.).
This falls into the "easy fixes with major impact" department. New lighting and fixtures can make an entire room seem new, even if it’s not.

8. Have the carpets professionally cleaned.
It’s quick, it doesn’t cost much, and it can give much-needed life to carpet. Even if you think your carpet is fine, give it a try. You’ll see the difference afterward!

9. Empty closets and attics to showcase their space.
Remember, prospective buyers are trying to see themselves in each house they look at. It’s a key determinant on whether they make an offer or scratch the house of their list.

Tip: Put half your clothes in a storage unit or in a friend’s house (temporarily). Your closets will seem larger with some emptiness to them.

10. Tidy up the landscaping.
Trim the bushes. Mow and water the lawn. Sweep the driveway and walkway. Plant fresh flowers. Most of these things cost you nothing but time, yet they’ll significantly enhance your overall "curb appeal."

11. "Neutralize" your paint scheme.
Colors and color preference are subjective things. One person’s favorite color can make another person gasp. To avoid putting off buyers with dominant colors, play it safe with beige, taupe and other neutrals. Remember, the goal is to help people see themselves in the home.

Don't overdo it!
It’s important not to take on too much at once. You don’t want so many projects that they postpone your ability to show your house. Start small. Develop a checklist of the projects you want to do, and prioritize them by level of importance. That way, if you run out of time or money, you’ll at least have the biggest projects out of the way first.

Learn More
Want more tips and strategies for selling your home? You'll find 20 pages of them in the author's "Home Selling Workshop." See below for website address.

Home Buying Process - Choosing Your Dream Home

Choosing a home can be one of the most important, fun, exciting and nerve-wracking steps in the home buying process. Being such a big decision, you'll want to keep certain things in mind when choosing a home.

Consider Your Home Buying Budget
First and foremost, when choosing a home, start searching only after you know your realistic budget. It would be terrible to fall in love with one or more homes that are outside of your economic means.

Often, home buyers who first look at homes outside their budget range are later dissatisfied when they look at home within their price range. Therefore, you should start your home search within your budget range.

Consider Current and Future Needs
When looking for a house you should consider your current needs and your future needs. For example, consider whether or not you are going to start a family, or whether someone from your family will likely be moving out of the home into their own house or apartment. Consider your commute to work or school, and decide whether or not the commute is something you'll be able to handle on a daily basis.

Conduct Neighborhood Reconnaissance
It's always a good idea to visit a potential home at different times of the day and night to get a feel for the neighborhood. You'll want to see if your potential new home serves as the backstop for a daily stickball or baseball game, or whether or not your home is next door to where the local high school band practices each afternoon.

Walk around the neighborhood to get a good feel for it. Home buyers often find they can learn more from walking around the neighborhood than they would by driving around.

Look for notices of construction or variance requests and try to get an understanding of what, if any, future development will be around your potential new home. Are they expanding the highway so the HOV lane is 10 feet from your backyard?

Talk to the Neighbors
If possible, speak with local residents and find out the inside information on schools, shopping, public services and other factors that you consider important. When it comes to buying a home, information is vital.

Some information can be obtained at the local library. However, information from local residents is likely to be more accurate and current. Of course, you'll need to gather several opinions in order to get a balanced "consensus." Never trust the opinion of just one person.

If you have children, you may want to have them assist you in the information gathering. Have them talk to some kids at the local playground or park to find out about the area. Generally speaking, children are less prone to self-censoring or being "politically correct," so they may provide you with important information.

Conclusion
At the end of the day, you -- as the home buyer -- have to trust your gut instincts and choose a home that gives you a good feeling the moment you pull up to it. Trust your instinct and emotions during the home buying process, and you'll soon know whether you are viewing "just a house," or viewing your new home.

* Copyright 2006, Brandon Cornett.