A Thought for Thanksgiving

Selling a home is, if nothing else, an incredibly personal and intimate experience.  This is often a transference of real property, but also a passing of the torch in a manner of speaking.  Every house carries with it an energy and history – the pencil marks on the doorframe that mark the passing of years as a child grows and matures….the counter where grandma mashed potatoes for every Thanksgiving over the past 15 years…the corner of the hall where the baby took a magic marker to your freshly painted wall.  Years of memory, both good and bad, all imbued with love and hope into these 4 walls.

That being said, the selling of a home is also a transaction – an exchange of money for goods – in this case, 4 physical walls and all the pieces and parts in between.  Often, this is the most important purchase in the life of a young family.  On the other hand, a successful sale could mean the difference between a safe retirement for a homeowner, or the looming fear of financial struggle for years to come.  Both of these circumstances are too important to both parties, financial and emotionally, to be taken lightly.

Given this precarious balance of practical housing need and the emotional desire for the transference of a HOME in the true sense of the word, I would encourage all those who buy and sell to find the most human approach to the experience – to walk a mile in another’s proverbial shoes, so to speak.  Offers to purchase made in generosity, negotiations in good faith and a little understanding of the predicaments of the other side.  Transactions born of positive beginnings result in the strongest sense of belonging – and karma likes to see to it that we get what we give in this world.

Happy Thanksgiving, everyone – to all my friends, clients and their families, from this very grateful NJ Realtor.  Looking forward to our continued relationship and all the success in the world to you.

Affordable homes lagging behind in recovery – what does than mean for you?

I don’t always like to do reposts, but this one I found very interesting – mainly because I have noticed it to be somewhat true in Northern NJ.  I’ve noticed that houses under 300K in towns with a NJ Transit train to NYC (Montclair, Glen Ridge, Maplewood, South Orange, Bloomfield, Summit, Millburn, Short Hills, Westfield, Cranford, Chatham, Madison, New Providence, Berkeley Heights, to name a few…even West Orange, who lives and dies by the jitney to the train) have either all but disappeared….(ok some of these towns don’t even have houses that low)…or they are lingering in a state of limbo: sitting in the cold, often in disrepair and unloved by any first time home buyer and too small for serious consideration from investors.  Some of these houses have amazing potential, and it seems a shame for them not to be loved.  My point is, if you can’t compete for a turn-key home because multiple offers keep shutting you out, then find the smaller house that needs love and get your self a good deal on a fixer upper – you’ll spend less money and end up with a house that has all the features you want because you put them in.  Enjoy the article:

Black Knight: Affordable homes lagging behind in home price recovery

Lower price homes appreciated more, faster in the bubble

In the 10 states where prices are still furthest from their pre-crisis peaks, homes in the bottom 20% value tier are lagging – sometimes considerably – in recovery as compared to the highest valued properties, according to Black Knight’s November Mortgage Monitor.

In California, for example, properties in the top 20% price tier are now just over 3% behind their pre-crisis peaks; the lowest 20% are still 32% off those peaks.
In many cases, these disparities boil down to the fact that during the bubble, lower-tier properties appreciated at much higher rates than higher-valued properties, then fell harder and further when the bubble broke.

According to Trey Barnes, Black Knight’s senior vice president of Loan Data Products, home price recovery for the lowest 20% of property values has lagged behind those at the top in America’s hardest hit states.

“We looked at HPI appreciation from pre-crisis peaks to today in the 10 states currently trailing the furthest behind their pre-crisis housing maximums,” said Barnes. “The data showed a clear difference in the levels of recovery among home price tiers. The Black Knight HPI separates home values for every geographical division into five equal tiers; those in the lowest 20% of home values have been lagging behind their higher-valued counterparts in recovery to pre-crisis peaks, sometimes considerably.

“For example, in Nevada – overall, still more than 39% off its pre-crisis peak – properties in the lowest tier are nearly 47% off their peaks, as compared to 36% for those in the highest tier. In California, an even starker contrast emerges: properties in the highest tier have now come within just over 3% of their pre-crisis peak, while those in the lowest 20% are still almost 32% down. In many cases, these disparities between price tiers can be attributed to the fact that during the bubble, lower-tier properties appreciated at much higher rates than higher-valued properties and likewise fell harder and further when the bubble broke.”

Black Knight also looked into the current state of play with regard to loan modifications and found overall activity was down in 2014.

HAMP mods accounted for over half of all modifications performed last year, with the majority of HAMP activity shifting overwhelmingly to FHA/VA mortgages (close to 70% of 2014 HAMP mods, as compared to just 13% of the same in 2013).

HAMP mods re-default at much lower rates than proprietary mods, but 2014 HAMP mods are re-defaulting at higher rate than either of the prior two years.

Finally, Black Knight performed a deeper analysis on this month’s 11.8% spike in the national delinquency rate.

While seasonality suggests that such increases can be expected each November, this was the largest such jump in six years; in fact, it was the largest month-over-month increase for any month since November 2008. However, the size of the increase can be largely attributed to a reduced number of payment processing days for the month (given two federal holidays and the month ending on a Sunday).

Trey Garrison is the Senior Financial Reporter for HousingWire.com. Trey has served as real estate editor for the Dallas Business Journal, and was one of the founding editors of D CEO Magazine. He has been an editor for D Magazine — considered among the best city magazines in the United States — and a contributor for Reason magazine.

2014 strong for NJ Real Estate Market…What Does the Future Hold?

NJ realtors have a vital resource for the somewhat tricky business of projecting what the real estate market will be like over the next few years – information provided for by statistical guru Jeffrey Otteau of the Otteau Valuation Group is a key.  Like the Nate Silver of Real Estate! 

His most recent spring assessment has some enlightening and somewhat sobering news about how the numbers will likely move, and below is a highlight reel of information that buyers and sellers might find really useful. 

Prices in NJ will likely rise an average of about 6% this year, then by 2015, there will be a plateauing – a move sideways.  Not a major bust but a combination of rising interest rates and an assault on entry level job growth are going to be a factor.  What is that?  An “assault” on job growth?  Well, example…the food chain Applebees is doing away with their wait staff and moving their order system to a self-serve tablet system – see link here: http://www.dailyfinance.com/on/applebees-tablets-tables-customers-order-pay-automation/.  Businesses that have the ability to automate are already doing so, and it will affect the buying power of the first time home buyer, without a doubt, which in turns affects sellers looking to sell their entry level home into a more “move up” sized home.

On the other end of the age spectrum, baby boomers who are a huge part of the ebb and flow of money in this country will be stepping back from the previously ubiquitous role they took in the marketplace.  They will pull back, prep for retirement, move onto fixed incomes and spend less.  This, coupled with the fact that many industries are actually relocating into areas closer to the future talent pool of workers, will affect the real estate market.  Where is this talent pool of the future you ask?  Proximity to urban centers – such as the City, boroughs…oh and lovely towns with easy access to NYC in 45 minutes or less…(Montclair, Glen Ridge, Bloomfield, West Orange, South Orange, Ridgewood, Summit, Millburn, Livingston, Maplewood, Clifton, Caldwells, Verona, Cedar Grove, New Providence, Short Hills, Chatham, Madison to name a few…)

The upshot?  The market is strong right now – a good time to buy or sell.  The interest rates are low enough to maximize your buying power and prices are still reasonable.  For sellers, the market is healthy enough for 2014, and a little harder to predict for 2015.  If you are on the fence about a move, ask me more about the process and I will be happy to review some facts and figures for you.  Education is your best tool to help you navigate the changing real estate market of our times.

Home Buying Myths Concerning MORTGAGES

So you’ve made up your mind – you’re moving to Montclair, Glen Ridge, Maplewood, South Orange, Millburn, Summit, West Orange – or one of the many amazing north Jersey towns…you’ve picked the house and you have your mortgage pre-approval in hand.   Have a look at some issues to consider in relation to your mortgage

As you continue your home search, many insiders, pros and even well-meaning friends and relatives will typically offer up some advice. Here are some common myths we hear regularly, along with the inside scoop on what will impact your buying experience and what’s just chatter.

MYTH: Bigger is better when down payments are concerned…It makes sense—put more down now and you’ll borrow less, be able to forego a PMI policy and have lower monthly mortgage payments, not to mention all the interest saved. That’s great if you’ve got access to 20% down which, in this area, can easily top $200,000 or more. But if you don’t have that kind of cash on reserve, there are plenty of perks to putting down less. Borrowers with mortgage insurance may be able to secure lower interest rates than those who make larger down payments, as the policy covers any potential defaults. What’s more, with rates relatively low right now, waiting to save tens of thousands of dollars could mean ultimately securing a less advantageous mortgage down the road, eliminating any potential savings.
MYTH: A 30-year fixed mortgage is the best choice If you plan to stay in your home for 30 years or more than, yes, this is typically the right plan of action. But if you’re looking for a “starter home” or plan to upgrade in 5-7 years, a shorter fixed rate term could be a better option. The longer your fixed rate, the higher your interest rate will be—if you’re planning to sell your home you’ll have paid a higher rate for nothing. In that case, consider a hybrid ARM that combines both adjustable and fixed rate mortgage aspects—these can have 3, 5, 7 or 10-year fixed interest rate periods. 
MYTH: If your total debt payments are less than 36%, your mortgage will be manageable Only you know what your personal finances look like, and what impact taking on a mortgage will have. The 36% rule is common among banks and lenders, but true affordability is another story. Track your spending for 90 days and see how much more you have to allocate to housing, maintenance, property taxes and other homeowner inevitabilities. If it winds up being 36% of your income, great! If not, readjust your percentages accordingly—and be prepared to make a case to your financial institution if you plan to go above that threshold.
MYTH: Mortgage interest is tax deductible Most homeowners can write off the interest they pay on their mortgage as a tax deduction—however, that deduction is calculated based on the amount it exceeds your standard deduction which, in 2013, was $12,200 for married couples filing jointly. For a larger loan balance—say $850,000 at 4.5%—the value would exceed the standard deduction by more than $26,000. As the balance drops, though, the tax deduction does as well. In the U.S. the average home loan balance is under $150,000—at a 4.5% rate, the interest is well below the standard deduction level.
Posted by The Suburban Jungle Realty Group

How will the Government Shutdown Affect the Housing Market?

So the news makes it look like the end of the world is upon us – and we’re all worried about the Post Office getting checks out on time to pay the bills, renewing our passports for the trip to Italy this summer or whether Grandma is going to get her social security check this month.  And since this is a real estate driven blog, let’s take a minute and find out how the shutdown is changing the value of our homes.  A big piece of our home value is based on buyers finding loans, and more than 90% of all loans are insured, underwritten or owned by our government, and one would be correct to think the shutdown will bring changes to this process.  But maybe less than you’d think.

Morgan Brennan has written a piece for Forbes describing the situation:

Initially at least, the mortgage market is likely to be only minimally impacted. New loans will continue to push through most government agency pipelines. What will change is how long the process takes, as many agencies expect to experience delays.

The culprit? Mainly, getting qualified.

[I]f the government shutdown of 1995-1996 is any indicator, the process will take longer than usual. “Loan Guaranty certificates of eligibility and certificates of reasonable value were delayed,” the VA warned in its September 25th contingency plan.

Rumors of an FHA shutdown are unfounded, but have an unusual source:

Where there has been mounting concern is the Federal Housing Administration, which currently endorses about 15% of the entire single-family mortgage market. Several media outlets recently reported that the FHA would be unable to endorse any single-family loans and that no staff would be available underwrite and approve new loans.

That prospect would be somewhat worrisome – if it were actually true. The FHA’s Office of Single Family Housing will indeed remain open for business, albeit with a smaller staff. “FHA will be able to endorse single family loans during the shutdown. A limited number of FHA staff will be available to underwrite and approve new loans,” the report now states. In other words, other lenders’ loans will continue to be insured and some in-house lending will continue to take place at a reduced rate.

The reason for that mix-up: the initial draft of the U.S. Department of Housing and Urban Development’s contingency plan mistakenly stated that single-family loan operations would cease. The report was amended over the weekend.

Apparently, the FHA’s single family home unit is funded with through the next fiscal year, but this is not the case for the Multifamily Housing Office, so expect delays getting a loan for that condo.

Our New Powerful Home Search Tool!

Our team website has added some powerful new search tools! Stop by for a look, and visit often as we frequently change to bring you the latest in search technologies.
Please use the link below to search for houses.  The link will send you to our team’s website, njdreamhouses.com, which has many powerful tools for buying and selling your home.

Click here to search for homes!

How Much Is Your Home Worth?

I’ve added a fantastic home valuation tool to my website!

Just click the link, fill out the form, and I will send you a report on the house market in your neighborhood!

Can’t wait to hear from you!

Click here to find out how much your home is worth!


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