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Robert Abbott of Abbott & Caserta Realtors Answers The Million Dollar Question
Author: Robert Abbott
Written On: Tue, 02 Dec 2008
Robert Abbott of Abbott & Caserta Realtors Answers
The Million Dollar Question
What will happen to the real estate market in 2009? Some will say it is doom and gloom with no hope in sight, while others, more realistic and level-headed, have high hopes for the Northern NJ real estate market in the coming year.
First, we have to understand that all markets are not alike and react differently at different times. Northern NJ is one of the strongest real estate markets in the country. The seven year appreciation rate for New Jersey homeowners is 80.4%, more than double the national rate of 37.8%! Source: NATIONAL ASSOCIATION OF REALTORS®. A diversified economic community, top schools, one of the highest per capita income levels and the highest property values, all mean that this is a “blue chip” area. “Blue chip” areas hold their values with less fluctuation than other areas. According to the National Association of Realtors®, the Northern NJ median sale price of homes ($450,700), are the highest in New Jersey. (See chart) Bergen County did not have the over development and speculation like Florida, Nevada, and California which will take much longer to recover.
Secondly, history has shown that the cycle of a down market is approximately three to four years. The Bergen county market has been down cycle in the number of units sold for the past three and a half years. Therefore the timing is right for a balancing of the market! Don’t assume when you hear that the market is down the prices are plummeting rather it is a function of the number of units sold. According to the 2007 New Jersey Home Buyer and Seller Profile, the typical seller has lived in their home for seven years. A June 2008 report issued by the NATIONAL ASSOCIATION OF REALTORS® found that within those seven years the typical New Jersey homeowner will have accumulated nearly $156,300 in housing equity.
Thirdly, buying today is the smart investor’s choice. Price adjustments have already been made in the marketplace and a number of financial factors make buying attractive: a lowered interest rate, a first time home buyer tax credit, and the increased Federal Housing Administration (FHA) loan limit. Contrary to public belief, mortgage money is available through your local public banking institution. All of these measures will encourage Garden State residents to enter the housing market. The timing is right to buy for the first time buyer as well as to buy up for a larger home. The phrase “TIMING IS EVERYTHING” cannot be truer than it is today!
