Great Interest Rate Makes Home Buying Easier

As the softening of the housing market continues to affect more industries the Fed continues to hold the interest rate steady. To give the Central Bank its due, they did take notice of the softening of the housing market at their October meeting. By holding the interest rate steady for the last four months, they have helped create a housing marketplace that is great for buyers. The steady lowered rate has meant lower mortgage rates. Sweetening the scene for buyers are builder incentives and giveaways which mean those looking to move into a spankin' brand new homes have some honeypot finds out there. Inventories of existing homes remain high so the marketplace has the potential of fulfilling a variety of homeownership dreams.

Read the Trenton Times Article

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Interest Rate, Housing

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New Jersey Tax Lies?

Oh good grief! It was bad enough when I read that NJ property taxes where the highest in the country and that NJ’s lacked sufficient affordable housing throughout its counties but now it looks like NJ raised its taxes in 2006 to the tune of $1.84 billion while the rest of the states cut taxes by $2.1 billion.
While on the one hand I want to yell at Governor Corzine and the legislature to get us off the number one list in these negative areas but the reality is the state has a $4.5 billion budget deficit. The money to pay it has to come from somewhere.
How can there be a property tax credit for anybody, much less for households making less than $250,000 a year, when there is a projected budget deficit for 2007 of $2 billion. Helloooo!! Is that tax credit going to add to the deficit or is it included in the $2 billion already. Where did the idea of the state running up so much debt come from in the first place? Five million maybe but, two billion no.
How does the government manage cash flow with that kind of deficit? Are there any reserved funds for unexpected disasters or is that what they want to dole out to taxpayers? It makes sense legislators want at the pension and healthcare benefits of unionized state workers. It’s a wonder they don’t want at Medicaid and other programs that help low to moderate income people. They are certainly not going to look at their own and their colleagues’ abuse of the pension and health care system by double dipping.
Still here it is January 2, 2007 and there have been exactly zero of the promised legislation passed or otherwise made ready for Governor Corzine’s pen. The legislature had no problem going home without passing one piece of tax reform legislation. I suppose one year’s tax credit is supposed to take the taxpayer’s mind off the fact that the legislature is looking for another way into your wallet.
Still as I sitting here looking over my computer out the French doors at the tree where my hammock allows me to recover after riding the mower over the grass during the summer, I would not want to live any place else.
Read the article

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Housing Market Looking Up

Well it is official, existing home sales were up 6% in the Northeast and .8% in the West, remained unchanged in the Midwest, and fell 1.6% in the South, according to the National Association of Realtors(NAR). While I’ve heard the words bubble burst, recession, and crash referred to the events of 2006, softening is probably the best explanation of what happened in the real estate marketplace and now things may just be stabilizing.
The Fed said new home sales in November rose (3.4% with the median price $251.700). That means builder inventories are decreasing and buyers are trickling back into the marketplace. Looks like the word has spread sufficiently that we are in a buyer’s market and properties must be priced for this market rather than 2005’s market.
NAR also said median price of existing home sales was $218,000 in November meaning half the homes sold cost more and half cost less. Also NAR reports existing-home inventories are decreasing too. We need both this section to recover to start 2007 right.

May each of you have a Happy and Prosperous Year!

Read the NorthNJ.com report
Read the NAR report
Read NJ.com report

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Doing the Utility Company Shuffle

New Jersey is offering assistance to residents who are struggling to pay gas or electric bills this winter. Guess where they are getting the $1.3 million to help seniors, jobless, and ill -- the utility companies themselves. Mind boggling, right? The next question is: did the utility companies just up and decide to donate the $1.3 million? If you believe that, well … naiveté is cute in children, buddy. No, you have to follow the money and in this case it seems some customers left without collecting their deposits. The money was just sitting there tempting the poor helpless utility companies. Now the utility companies can access that money by donating it to other customers for service. Maybe I am being cynical here -- well yes, I am being cynical, but while the companies may help seniors, the jobless, and the disabled through the winter with the money, and mind you I agree that the cause is worthy, it sure looks like the utility companies wanted access to the abandoned deposit money and this was a way to get it. My hat is off to whoever came up with the positive spin on the shuffling of inaccessible money to company coffers.

Tip of the Day:
Before you move up collect or transfer all deposits on the old home to the new one. Utility companies happily transfer service and deposits if you notify them prior to moving day.

Read the AP NewsFlash.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Current Events, Homeowners, Politics

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Locked Out and No Place to Go

It’s a sad day when a legend dies, it is even sadder when a five-year old child gets locked out of his home during Christmas. Now don’t get me wrong, I respect the music of the “God Father of Soul” James Brown. (Audio link here) I respect what his work did for music. I have some really, really good memories of the beats and riffs in some James Brown standards likeThe Payback, I Got the Feelin’ and Say it Loud, I’m Black and I’m Proud. I hear it sampled everywhere.
It is a shame that according to AP reporter Harry R. Weber, Tomi Rae Hynie and James Brown II have to live in hotel and may not even have access to their clothing or his toys until the legal shenanigans are completed. James Brown has taught one final lesson that has nothing to do with music: homeowner partners need to make sure all property is shared jointly legally, whether its with a partnership agreement or by placing both names on the deed , tax records, etc. Just make sure what ever you do, it is done legally and the original and copies of the proof is outside of the residence like a safety deposit box and a lawyer's office.
Image Courtesy of James Brown Website

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Tip of the Day: When a Feelin’ Won’t Do It

While I am tempted to say if you live in central NJ and your house isn’t selling you should call me especially if you, like James Brown, "Got the Feelin'" and went the For Sale by Owner (FSBO) route, but there are still some things FSBO’s can do.
This article makes some good suggestions the first being to video tape the exterior of the home. The exterior is the first things a visitor or potential buyer will see. Looking at the exterior on video will give you distance and oftentimes clarity the condition of your home. If what the visitor sees is crap grass, over-grown trees, yard debris, trash receptacles, broken fixtures, peeling paint etc. your home will show negatively on the outside – which will have an impact on the price a buyer will offer.
Assuming you have packed away all your personal items for the new house, consider having a consultation on staging your home. Often there is too much furniture in homes making rooms appear smaller which could make your asking price appear inflated.
Finally make sure you have had a comparative market analysis done. The market changes as houses come on and are sold or withdrawn from the market. I offer this service for free with no obligation to sellers and I am others do also.
Read the article for more tips.

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Widen Your Territory or Die

Luxury suburban mini-mansion maker, Toll Brothers of Horsham PA, must have been privy to the proverbial message on the wall. It sure seems like Robert Toll heard it and has heeded the message expanding his luxury home building business to include high-density housing in the form of luxury condominiums in Manhattan, Queens, Brooklyn, and Hoboken, NJ. Toll Bros primarily built luxury single family suburban homes so the change to urban dwellings is notable.

Read Michael Corkery's report.
Image:2002 THE NEW YORK TIMES

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Another Builder Posts Q3 Losses

Hovnanian Enterprises of Red Bank, New Jersey reported a quarterly loss of $117.9 million or $1.88 per share down from $165.4 million or $2.53 in profits during the same period a year ago.

"We did not anticipate suddenness or magnitude of the fall in pricing that occurred this year in many of our communities," Chief Executive Ara Hovnanian said in a statement. "Our profitability and the pace of new home sales in our markets continues to be adver sely impacted by high contract cancellation rates, increases in the number of resale listings and increases in the number of new homes available for sale."

Shares fell 16 cents on the New York Stock Exchange and in after hours trading it fell another $1.25 to $34.
Read the Janet Frankston Lorin report
Read TheStreet.com report

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Affordable Housing Across NJ --Maybe

Assembly Speaker Joseph Roberts’ D-Bell Mawr proposed reform bill of New Jersey’s affordable housing rules has number. It is A-3857. The proposed bill will eliminate regional contribution agreements (RCAs) which allowed municipalities to reassign a portion of their affordable housing responsibility – as much as fifty percent – to cities. The proposed bill also creates housing rehabilitation and assistance program for grants to municipalities. The lack of affordable housing across the state means minimum wage workers would need to 119 hours a week to afford a two-bedroom apartment at $1,103 a month. We will watch what happens with proposed bill A3857.
Read Robert Stern's article.

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Are Incentives the Way to Get Buyers?

Offering incentives is a marketing ploy to get buyers to come look. Builders have the best chance at attracting lookers since they can offer a wider variety of incentives than the average existing home sellers. Still existing home sellers are getting into the act offering to buy points (which would lower monthly payments) and pay fees (pool, lawn maintenance, etc). But for all of the incentives builders and sellers have come up with, paying for incentives instead of just reducing asking price seems the more prevalent practice. Sellers hope lookers see a dazzling incentive carrot and come nibbling. Whether lookers will actually make buy depends on the looker rather than the incentive. We have had about five years of sellers being in control of real estate transactions and now the pendulum has swung the other way. Price reductions bring out buyers rather than lookers.
Read Judy DeHaven's story on Sellers and Incentives

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On and Off Again Katrina Aid

Add another avoidable disaster to those associated with Hurricane Katrina relief efforts. One would think U.S. District Judge Richard Leon would have known better; trying to force the federal government to explain itself clearly is a daunting task. The judge ruled that FEMA must get better explanations of its decision to cut aid to the 4200 Texas families affected by Hurricane Katrina. He pressed to get the explanation finished by today—but FEMA is appealing the decision and asking for an enforcement delay. The ruling on the delay will not come before the middle of the week at best and by then FEMA will have advised Texas officials of aid restoration and sent out letters to Katrina affected families. Should FEMA prevail in appeals court, they would then have to turn around and tell Katrina victims their wretched luck won again. What a mess!
Read CBS News article

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Tax Reform: Home for the Holidays

Legislators went home for the holidays without passing one piece of tax reform legislation. While some legislators wasted time being angry with Governor Corzine because he told them to work on reforming the pension and benefits packages of non-unionized, appointed and elected officials. Still they have gone home and passed nothing. Perhaps the job of policing elected officials is just too big for the legislature… after all it is their colleagues that are double-dipping into the benefits and pension funds. It would have been a lot easier to cut the benefits of the faceless unionized worker than mess with that guy/gal across the isle.
Read The Times article for a different point-of-view.

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Affordable Housing: City or Burbs

With Governor Corzine’s campaign pledge to create 100,000 affordable housing units in the state, one needs to take a look at where those units will go. Many municipalities pay cities through Regional Contribution Agreements (RCA) to handle up to 50% of their afforable housing responsibility. These agreements ideally help all parties concerned but we don’t live in an ideal world.
For example, Trenton benefits from its RCA and is using a portion of its RCA funds to rehab houses and provide homeownership to low income families.
Read Eva Loayza article
Affordable housing in the suburbs is not progressing as well in part because of RCA’s but also because suburban municipalities are in dire need of residents who will not further distress their school districts. Also the infrastructure, at present, may not offer enough support these families.
Read Darryl R. Isherwood article
With State Assembly Speaker Joe Roberts introducing a bill that may eliminate the RCA practice, cities and suburbs may have to scramble to negate the negative effects. What is important though is that whether low income housing is effective in the suburbs will depend on the infrastructure low income families need. Meeting low income family needs beyond the roof over head requires serious consideration.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Affordable Housing, Low-income Housing, Politics

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Bold and Ambitious Tax Reform: Fantasy?

Well it looks like the legislature is going to pass the tax credit this year. What is unclear is whether the thing will be sustainable. Governor Corzine required a comptroller and a 4% increase cap on future increases. That legislation is on track. Now do get me wrong, the government letting me keep my money is real important to me, nice of them too; but, is that really what’s happening?
First up, the Democrats:
Have property tax assessments been decreased across the board? No, at this point it probably cannot just be decreased. Has anything been done to decrease the amount NJ residents will have to pay next year? Well sort of… If Democrats have their way, most New Jerseyans will pay 20 percent less and the municipality will collect that 20 percent from the state. The state would foot 20 percent of the bill for household with incomes below $100,000 with higher incomes getting less. They are working on making the thing sustainable.
Republican Naysayers:
Republican colleagues have complained that everyone should have the same amount of relief. (If everyone had the same income, equal credits would make sense – what NJ resident would mind an income greater than $100K per year?) Other Republicans say the credit is not sustainable. (Don’t you just hate naysayers who are just so stuck on their side of the isle agendas instead of helping slay the runaway property tax beast?)
Is it too much to hope for a bipartisan effort to reform property taxes that recognizes those most in need of relief have less gross income start with or is bipartisan teamwork a fallacious fantasy?
Read the McNichol and Hester article
Read the AP article.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Tax, Property Tax, Property Tax Reform, Property Tax, Tax Reform

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Governor "Encourages" Legislature to Stay on Task

Governor Corzine seems committed to property tax reform. He knows much like the legislature that the time and place to attempt unionized workers' pension and healthcare plan reform is the bargaining table but the place to reform legislative and non-unionized state workers plans is in the legislature. Double-dipping legislators and their collegues have to police themselves but it looks like top-cop Governor Corzine will push them to do just that. Governor Corzine has said he will use his conditional veto to make sure any legislation crossing his desk addresses the issues he has directed the legislator to reform. It looks like the new marshal in the state house means to stay on task, reform a double-dipping legislature and get sustainable property tax reform.
Read Deborah Howlett's story

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Property Tax, Tax Reform

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Double Dipping Legislature Offers Tax Savings

Well it looks like the legislature is doing it again. They offered a tax cut to those households that earn $100,000 or less dangling a carrot to household making more but not really digging into the meat of the property tax reform last week. Is the 20% savings sustainable? That's the big question, that and how are they going to sustain it? Frankly, messing with state worker pensions when some legislators are double dipping into the state pension and health care fund themselves is bad business practice. Why don't the current batch of the legislators have one pension and health care plan regardless of the number of state jobs? Compensation from the second job makes the purchase of extra healthcare/retirement coverage worker affordable and it need not involve the state. Instead these legislators are going to "reform" the benefits for workers with one state job. Just goes to show the real meat of reform is still not on the table and may not ever be until citizens reformers can get deal with double dipping legislators.
Read Ditch Double Dipping

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Median Price Falls

The National Assoication of Realtors says the median existing home price in the Northeastern United States dropped to $254,000 in October, a 5.2 percent decrease from October 2005.

The housing market is far from the bottom, not with the incredibly high inventory of unsold homes," said Joel Naroff, chief economist at Naroff Economic Advisors, a private forecasting firm. "Sellers will have to overcome their state of denial and start dropping prices even more to clear this market. And once that happens, we will then have to convince buyers that prices have stopped falling.
"We are a long way from that point."

Read Sam Ali's story
Still there is nothing a real estate professional likes least than having to have ahat with a seller about a price reduction. Whether the talk is at the listing appointment or after the property has been on the market for six weeks. Trying to explain to a seller that the market has changed so that what their neighbor got for their house six months ago is unlikely to be what they can expect for their house today. It is a difficult conversation for all parties but one the is necessary to help sellers understand today's market.
Read Julie Clairmont's story

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, FSBO, For Sale by Owner, House Sales

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October Report: Adjustment Continues

Well the numbers are in for October and compared to 2005 it is nothing to celebrate. But thinking that 2004-2005 were record years and the market would need to correct itself. That is what is occurring now. What is on everybody’s mind is how deep a correction can we expect? Nobody seems to have that answer. There are many guesses but nothing specific. What we are getting now is month data on how deep the adjustment is going.
Read Sam Ali’s article.

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Tax Time? Prepared?

As the new year approaches, it is almost that time again. What time is that? Tax time. Homeowners who are willing to itemize there deduction oftentimes reap a huge benefit. Deciding if the 1040 long is best for your personal situation takes some careful thought and Kay Bell of Bankrate.com gives a few tips.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Taxes, Property Tax, 1040

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Katrina and Company Changes Insurer's Path

The storms of 2005 have had an impact on how Allstate Insurance Company intends to do business in the future. While Allstate will continue in the property/casualty business but they are slowly cutting back on insuring home in Florida and up the Eastern seaboard. The suffered losses because of the storms last year and saw red ink in the third quarter of 2005. The company has returned to making a profit in 2006 and expects to continue doing so buy dropping, not renewing or raising premiums in service area that are not showing profit. It make sense because Allstate is a business and profit is part of that business.
Read the story in Forbes

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Church and Realtor Bamboozled

It a cold heart that doesn’t sympathize with the Hurricane Katrina victims displace in various states across the country but one woman’s actions just leaves a bad taste in the mouth.
After being selected to receive a free house, The woman sold the $75,000 house without ever moving into it.
Read Woody Baird’s story

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Foreclosures Rise a Concern for Now

A few firms that track foreclosures released data that show the number of foreclosures increasing. The rate of increase notable here because New Jersey made the top ten list in October with 1 out of 675 homes in foreclosure here. That number represents a 42% increase from October 2005. For the year so far (ending with October), the rate is only up 5.3% according to RealtyTrac. Mortgage Bankers Association says New Jersey's actual rate is 0.3 percent.
The reasons for the increase in foreclosures varies. To name a few: adjustable rate and exotic mortgages racheting up rates, inability of homeowners to refinance to prime mortgages, or inability to sell the home before the foreclosure process concludes. The worst reason is the home is no longer worth the price of the mortgage because of the changes in the market.
Read Judy DeHaven's story in the Times.

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Mansion Building on the Rise

Thought we could use a bit of humor today. Found this article and thought it fit the bill. Don't let its title mislead you though: "Housing boom reaches its tail end". I am not going to spoil the surprise but it is good to see Sam Ali use some humor in news reporting.

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Historical Preservation and Open Space Efforts Co-Existance

It took twenty years but the farmlands that belonged to John Witherspoon have been added to Princeton's "Central Park". Known as Tusculum Estate on Cherry Hill road was created in 1773 as Witherspoon's country estate. The sale of the 35 acres leaves another 23 acres still belonging to the estate.
The are some restrictions on the grant namely that 16.5 acre portion no structures except driveways and fences will be allowed so the that there is some historical continuity.
The original article by Lisa Rich of the Times of Trenton is currently unavailable online.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Historical Preservation, Open Space,

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Another Builder Reports Decreased Earnings

Hovnanian Enterprises, Inc of Red Bank, New Jersey chimed in with its fourth quarter report of a decrease in contracts of 36% from last year’s totals with cancellations representing 35% of the total.

”Our financial results for the fourth quarter continued to be negatively impacted by high cancellation rates and increased use of concessions and incentives, particularly on the resale of those homes which experienced contract cancellations," said Chief Executive Ara Hovnanian.

Read John Spence’s story

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Signed Contracts and Revenue Down

Tolls Brothers reported signed contracts down 55 percent and new home building revenue down ten percent compared to 2005, as the housing market continues to soften.

Nobody wants to buy something that they think will cost less two week later,” said Robert Toll, Chief Executive for Toll Brothers

Beazer Homes of Atlanta reported a 44 percent decline in profit. New orders for Beazer fell 58 percent.
Read Deborah Yao’s of the AP story.

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When Autumn Leaves Start to Fall

The falling leaves, drift by my window... If that was all they did it probably would be okay; but, gravity brings them to the ground where they make a slippery mess.
It is that time of year again gang. The trees are beyond their display of colors stage and are now dropping leaves all over lawns, cars, and garden furniture. Many homeowners are using these last mild days to rake the rubbish to the curb but a word of caution. Before you get in an afternoon of leaf throwing, blowing, or rolling, it might be in your best interest to check out the ordinances regarding yard debris for your town.
Some towns restrict not only the time when one can put leaves at the curb but also how close they may be to a storm drain. The ordinance will have some information on whether or not leaves may be bagged or otherwise contained and how soon one may put yard debris at the curb. Knowing the ordinance could keep you from having to pay a stiff fine or as in West Windsor from having to spend time in jail or do community service.
Read Joyce J. Persico's story

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey>, Home Maintenance

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Pending Home Sales Index Down

While things are expected to hold fairly steady through the end of the year that does not mean there won't be slight rises and fall. In August the Pending Home Sales Index at 110.3 was 4.7 percent higher than July at 105.6. September the index slipped 1.1 percent to 109.1. The September index is still 13.6 percent below last September. The PHSI is based on the number of signed contracts in given month. The numbers were seasonally adjusted.
Read the more here and here.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Sellers, FSBO

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NJ Urban Sales Booming

While buyers in the suburban housing market continue to shop and sellers find houses sitting instead of selling, the urban market is very active. Atlantic City is leading the way in sales according to Robert Gebeloff of the Star Ledger. In fact, sale prices in the 30 New Jersey cities seems to be booming.
Read Gebeloff’s story.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Housing Sales, FSBO, Sellers

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Sell Your Home Faster

The first thing to consider when attempting a quick sale is the amount of profit you want from the sale. If sellers would consider receiving less in profit then the sale (say 150% instead of 180%), then selling price of the home could become more attractive. Oftentimes sellers' pricing and profit taking are not in line with what the market will bear. If the timing of the sale of the present house is important to moving into the dream home, then less profit taking can prevent a disruption in the planned move.
The last two items to consider for a quick sale are financial incentives and a contingency offer.
Read Sam Ali's article for the Star Ledger

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Home Prices Slide

Home sales slipped for the sixth month straight in September despite the dropped mortgage rates according to the National Association of Realtors. Nationally 6.18 million units sold in September down from 6.30 million units that sold in August and 14.2 percent below the 7.20 million units pace of September 2005. Also the median price of a home fell for the second month to $220,000.
Read Sam Ali's story in the Times

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Tax Panel Begins Public Hearings

Public hearings will begin on the list of ways to cut property taxes proposed by the special legislative panel. The first hearing is today in Bordentown Township Hall, November 1st in Freehold Borough Hall, and November 9th at Bergen County Community Center. The meetings all begin at 7PM.
Read Tom Hester's Times story

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Stubborn Sellers Lose in Declining Market

Housing prices have declined since last year and buyers are slower deciding to make purchases. Some sellers still overprice their homes. The consequence of stubborn overpricing: the loss of home value as prices continue declining.

Read Patrick Rucker’s story in Reuters

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, House Selling, Seller, Home Seller, Selling a House, FSBO

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New Leader Named for Housing Agency

The new head of the housing and economic development department in Trenton is Alan J. Greenwald. Greenwald will replace Assistant Business Administrator Dennis Gonzalez who was acting director since 2005. Greenwald lives in Trenton and wants encourage more state workers to resident in Trenton.

Read Eva Loayza’s story in Trenton Times

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Corporate Housing

Relocating families have few options when the primary wage earner transfers to a location that requires moving the primary dwelling to anothers state. Until recently short-term housing meant family, friends, hotels, and a sprinkling of extend-stay facilities. Now however some developers have furnished unit available for corporate tranferees.
Read Beth W. Orenstein's article.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Corporate Housing, Short-term Housing

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FICO and Private Mortgage Insurance 101

Okay, let's use the fictitious Ed and Edna James again to help with this explanation. Ed and Edna are at the closing table on their new house. For the sake of this discussion, let's say their FICO score is 590 and they are only eligle for a sub-prime 2/28 adjustable rate mortgage; but, they are estatic at having succeeded in getting the mortgage and consider themselves one step closer to moving into the home of their dreams.

They do not really think about anything, other than leaving the table with the keys. They eagerly glance over and sign papers (planning to give them a more careful read in their new home), and only half listen to the talk that is going on around them until the talk turns to their total monthly payments. The payment is much higher than they expected. It is at the closing table that they learn their FICO score and their inability to pay a twenty percent (20%) or higher down payment on the property has increased the private insurance rate. The couple leave the table stunned but with the keys.

Private mortgage insurance (PMI) unlike any other insurance pays a third party, the lender, in the event the homeowner defaults on the loan; but, the homeowner pays the premium on the insurance. This insurance is required for loans. The borrower's FICO score helps determine the premium. While Ed and Edna should have gotten a good faith estimate of the cost of their anticipated mortgage and the PMI monthly payments, it does not always happen before closing. It is something every buyer with a mortgage should look for or ask about before going to closing and signing anything. Knowing the total monthly costs is something every buyer should know and consider before the going to closing.
Read more about FICO scores effect on PMI here.

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In Today, Out Tomorrow?

The next two years will tell the tale of what will happen with homeowners with adjustable rate mortgages (ARM). To understand the problem here’s a scenario: Ed and Edna James purchased a 180,000 dollar house an financed it with a 2/28 ARM. The couple has a combined income of $30,354. Right now they pay $1265 dollars monthly. When the loan is fully indexed the couple will pay a whooping $1990 dollars a month leaving them about $125 dollars for food, utilities, fuel, etc. Hopefully, the fictitious Ed and Edna spent the two years of the low rate getting their credit in order and are now able to get a fixed rate mortgage loan otherwise they will be unable to pay their mortgage and will have to move.
Read Sam Ali's story

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, ARM, Mortgages

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Kara Homes Gets $5 Million Operating Loan

Kara Homes based in East Brunwick, NJ filed for Chapter 11 bankruptcy on October 5th. Today the builder has lined up a high interest loan that would allow it to continue operating if the bankruptcy judge grants approval. The hearing with Judge Michael Kaplan is on Thursday in Trenton.

Medical Capital Group loaned the builder 5 millions with a 18 percent interest rate over a six month term.
Read the entire story here.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, New Home Builders, Builders

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Judge Approves NJ Affordable Sale

The judge overseeing the NJ Affordable Home bankruptcy case approved the sale of some 200 properties belonging to the company. A new twist has developed in the story though. Some of the investors signed mortgage notes and so they may now be on the hook to pay the difference between what the homes sold for and the balance of the mortgage. It appears the difference is $2.3 million dollars. The lending banks have not declared their intention yet.
Source: Greg Saitz, Star Ledger Staff

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Real Estate Investing, Bankruptcy

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For more information on Real Estate in New Jersey visit here.

Home Buying: Four Tips

Just finished a good article by Holden Lewis of Bankrate.com offering consumers four tips on buying a house. What I like about the article is Lewis encourages buyers to do their homework. Yes, using a buyers' agent is good, especially in this market; but having the ability to express the qualities of your dream home requires some thought. Being able to answer the questions of what neighorhood, style, must haves, wants, and price range means your agent will be able to look for houses that meet or closely match your criteria.
I encourage clients to look online for properties, even if it is not in the neighborhood they desire. It is true a picture is worth a thousand words so if a client has a dream house in an undesirable neighborhood it is likely I can find something similar in the desired neighborhood. I will not waste my client's time showing them houses that they will reject. My clients are happy and when my clients are happy, I am also.
Here are the four tips:

• If you find the right house at the right price, buy it.

Waiting to see if prices go down could lose you the property.

• Put technology and a good buyer's agent to good use.

I call this doing your homework. Check out houses online. Make a list of wants, must haves, and any other pertinent facts about your dream home. When the time comes to
do comparative market analysis(CMA) on a property a good buyer's agent will be invaluable. Now, I am not just saying that because it is what I love doing, I am saying it because even though there are other means to do CMA's the buyer's agent brings human experience and knowledge to the table that technology has not been able to surpass.

• Negotiate effectively

A good buyer's agent will assist you in negotiating the best price, terms, and conditions for your home.

• Avoid Gimmicks

There are all kind of gimmicks out there but the business at hand is to purchase a home. If a gimmick is offered turn that gimmick into cash toward the purchase of your home. Good advice.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Home buying

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NJ Affordable Homes Liquidated

On August 30th we ran a story by Greg Saitz about Wayne Puff and NJ Affordable Homes which the SEC shutdown as being a Ponzi scheme. Mr. Saitz reports that in an attempt to raise money, last weekend there was an auction to liquidate the company’s assets: some 205 properties. The trustee held the 3-day auction and raised $20 million dollars well short of the $40 million dollars 500 investors sank into the company. Once the bankruptcy judge approves the sale and the various fees and liens paid, the trustee wants to split the money equally among the investors.

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Alleged Housing Discrimation in Lakewood, NJ

Looks like the government (the Department of Justice) is suing Triple H. Realty LLC for discriminating against non-jewish black and Latina tenants. What they are alleged to have done just turns my stomache. It is not rocket science people. Discrimination is not just plain wrong, it is illegal. If this company is guilty then I guess they had some money they wanted to give away because the lawyer fees, fines, and monetary damages just might be enough to get them to obey the law if not get a moral conscience.
This story bares watching to see what happens.

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New Home Starts Down 16 Percent

Got a look at the Courier-Post online story that says new-home builder are aggressively controling their inventory because of the cooling of the resale housing market.

"The new home market is directly dependent on move-ups or move-overs (empty nesters). In order for those two dynamics to continue, the resale market must be robust," said Patrick O'Keefe, executive director of the New Jersey Builders Association.

In other words, until the resale market swings toward a healthy number of interchanges between buyer and seller or buyer confidence rises new home builders are going to have to be careful to sell their inventory to remain profitable.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, New Home Builders, Builders, Buyers

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Market Upside= Affordability + Mortgage Rate Decline

James Lockhart, director of the Office of Federal Housing Enterprise Oversight said the recent changes in the market have an upside for buyers.

"Housing starts are down. Permits are down. There is a significant change happening here. Hopefully the good news is houses will become more affordable." he said on CNBC's Squawk Box. (Source: MarketWatch)

In August the number of new home sales increased. Builders are offering incentives to move their inventory. Nationally the numbers rose by 4.1 percent and in the Northeast it rose 21 percent. (Source: Star Ledger)

Resale home prices fell in August as sellers began lower prices of homes for the first time in 11 years. This means that prices allow more buyers an opportunity to purchase. (Source: MarketWatch)

The 30year mortgage rate is the lowest it has been since March. The national average is about 6.31 (Source: Reuters)while the average for New Jersey is even better. (See above graph)

The signs are good for a quick buyer to get a new home or a resale one for that matter for an affordable price.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Buyers, New Home Buyers

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Evaluating Property? Appraise Exterior Greenery

Now that the buying frenzy of the last few years is over and buyers are taking their time before making purchases, paying attention to the exterior of the house, particularly the grounds, the slope, and which way water flows. should concern both buyers and sellers. Joel Lerner of The Washington Post says appraise tree, plant, and shrub health prior to purchase as they come with the home and enhance or detract from the property’s value.
Here is a link to the story. (subscription necessary)

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Buyers, Sellers, Homeowners

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Tips of the Day: Homeowners Tips

The tips this week is a recommendation to do-it-yourself homeowners: Get a hold of a This Old House Magazine for September 2006. There are a lot of good information about design, lighting and makeovers in the magazine but this issue is their 101st issue and they are celebrating by compiling 101 Homeowner Tips. The tips range from how to set a mouse trap to how to decrease the smell of latex paint. The magazine is worth the money (less than $10 bucks) for the handy tips alone. Check it out and get your copy before the month is out!

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, Homeowners, Home Maintenance

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GMA Takes the Challenge

The Challenge: Sell it in a week. A Tom's Rivers couple got the attention of Good Morning America's Barbara Corcoran by issuing the challenge and now the Ms Corcoran has taken it up. It is an opportunity for do-it-yourself homeowers and others interested in a fast sale in this market to see what is necessary to make a quick sale.

1) Staging (removing the clutter and personal items, free up closets and cabinets)
2) Correct pricing for the market
3) Advertising (strategic placement of signs, newspaper and magazine ads)

Now admittedly most FSBO's and real estate professionals will not be able to reach as many potential buyers as Barbara Corcoran can, but if all else is right -- and the gods are feeling generous -- buyers will come.

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, For Sale By Owner, FSBO

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Workshop for First-time Buyers

Workshops are being presented at area libraries for first-time homebuyers. The first of the series is tonight at the Ewing Branch of Mercer County Library at 6:30PM. The workshops provide information on how the mortgage process works.
The attendees will learn about a County program that will assist first-time buyers with downpayment and closing costs.
Worth a visit future buyers!
Source: Times of Trenton

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey, First-time Buyers, Buyers

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Median Prices Fall Slightly

The median price for existing homes fell in August according to the National Association of Realtors. The median is the point where half the houses sold for more and half for less. In August the median price was $225,000. NAR's chief economist said the declining prices in July and August is part of the "expected price correction".

“This is the price correction we’ve been expecting. With sales stabilizing, we should go back to positive price growth early next year,” NAR Chief Economist David Lereah said.

There are a number of factors contributing to the increase in inventories, nationally.

In some areas, home sellers are not making sufficient adjustments in their listing price, so their homes are staying on the market and contributing to the build up in inventory,” says NAR President Thomas M. Stevens from Vienna, Va.

Though there is a backup of inventory NAR's economist says we are still going to have the third highest home sales year. Lereach also predicts we should see "positive price growth early next year."

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Princeton Area Floods Now Too

Okay, the Trenton area has been experiencing increased flooding for years. Now Princeton residents had joined its neighboring municipality in flooding woes. Princeton Township residents near the Harry’s Brook stream have experienced an increase in area flooding in recent years.

"There were floodings, but ... we didn't keep track of that because it wasn't happening" that often, said Olivia Applegate, a Harry’s Brook area resident.

Harry’s Brook has experience 10 or 11 major floods in the last three years she said.
The township enacted and ordinance last year that required single-family homeowners to have drainage management in any plan that required resurfacing their property. Residents making lateral expansion of their homes or adding driveways have to manage storm water runoff. The action of requiring single family homeowners to take such measures was unheard-of and prehaps even unprecedented in any of the other municipalities. Still requiring homeowners as well as builders to manage storm water runoff is very good. Do the enacting of water management ordinances mean that Princeton homeowners will have to start thinking regionally? Hmmm...
Source: Times of Trenton

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Technorati: NJ Real Estate News, Real Estate, NJ Real Estate Blogs, NJ Housing, New Jersey

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Fed Showing Interest in Housing Market

In a press release on Wednesday, the Fed held the interest rate at 5 ¼ percent but changed in its language concerning the cooling U.S. housing market. The August 8th press release suggested holding the interest rate at 5 ¼ percent.

”Economic growth has moderated from its quite strong pace earlier this year, partly reflecting a gradual cooling of the housing market and the lagged effects of increases in interest rates and energy prices.”

The September 20th press release has a subtle difference in its language that could suggest the Fed is paying attention to the housing market.

”The moderation in economic growth appears to be continuing, partly reflecting a cooling of the housing market.

Whether this means they are considering taking some action or are just concerned is anybody’s guess, but the Fed is known for using subtle shifts in language as a precursor to some action to slow the cooling process.

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Meritage Homes Admits Decline in Orders

Well, another new home builder has reported a decline in new home sales this quarter. Meritage Homes Corporation says its third quarter results to be near or below expectations. Meritage reported net new orders fell 38% below last year.

"Demand has slowed and resale inventories have risen in many markets, making it more difficult for our buyers to sell their existing homes, and in turn causing higher cancellations and inventories industry-wide," said Steven J. Hilton, Meritage CEO...

Meritage Homes joins Toll Brothers and other new home builders who have been effected by the change in the housing market. Monday we reported Builder Confidence at 15 year low.

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Housing Price Rate Increases Slowly

The selling price for houses rose to a 4.7 annual rate this quarter according to the Office of Federal Housing Enterprise Oversight.

"Gains in home values have been a major contributor to U.S. economic growth in the past four years. Consumers who feel wealthier spend more and save less. The personal savings rate has been negative for 16 consecutive months. Many consumers have also been able to borrow against their home's rising value, pouring hundreds of billions of dollars into the economy." write Rex Nutting for MarketWatch

Seller can expect a much different buyer than last year. Today's buyers looks to maximize the amount of house or give-backs or inclusions they receive for their dollars. It is truly a different market out there and sellers must adjust get the sale.

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Home Builders Still Cautious

The September New Home Builders’ index is expected to go a bit lower than the August index of 32. The index measures builder confidence. With real estate professionals' inventories high, mortgage rate high, and buyers expecting more for the dollar, builders are feeling less confident about being able to sell regain their investment.

The expectation is that the index will drop to 31 -- the lowest it's been since February 1991.
Source: MarketWatch

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