In central New Jersey the market appears to be adjusting for last year’s sellers market where it was not uncommon to see 15 - 20% increases in property selling prices. The selling pace for 2006 is slower. Sellers must adjust their expectations to accommodate the longer time their home may spend in the Multiple Listing Service (MLS) before it actually sells. While buyers are looking for properties, the asking price and the selling price is generally less than similar properties that sold as recently as just December 2005.
"The real estate markets today across the country are very strong but there are pockets where we are beginning to see signs of trouble that are emerging," Federal Reserve Governor Susan Bies told a bankers group in Coronado, California. (Reuters)
The New Jersey market is steady. Area houses sell– just not as quickly as in 2005. The seller who wants to use the proceeds from the sale of one house to purchase another must compensate for the delay. It is a tricky maneuver to time the sale and purchase so that the funds become available at the time they are needed.
While many people purchased homes simply as a place to house families in the past, today’s buyer is looking for a safe place to invest their money. (Realtor.org Magazine) Housing is still a good investment and has raised the general wealth of Americans in the first quarter of 2006. (Reuters) With the increases in the interest rates over the past two years the housing market is naturally the first area to show the effects. For example a buyer may qualify for a $200,000 loan with a lower interest rate but as the interest rate climbs the amount of house, i.e. the amount of loan the same buyer can afford with the higher interest rate is less. Both the buyer and the seller will have to adjust to the changes various factors have on the real estate market of 2006. Still the outlook is good.
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