The Bergen County Homes Blog

The premier newspaper in Bergen County is the The Record and one of their top reporters who focuses on the real estate market here is Kathleen Lynn.  Today Kathleen published an article in which she went over figures from both the Standard & Poor’s Case-Schiller index and the local Multiple Listing Services. 

What she found is very interesting and positive.  Comparing the real estate market from August 2009 to August 2010, she found that prices rose 10.2% in Bergen County but “the number of sales dropped about 24%”.  Ms. Lynn’s bottom line on the housing market is that while prices got a kick from the home buyer tax credit, activity fell off once the program ended.  Frankly this was no surprise; many home buyers bought houses earlier than they would have to take advantage of the tax credit.  Just ask a mortgage banker how busy he was processing home loans in May and June.

I find this report to be positive simply because the comparison showing prices are up is for the month of August. 

To qualify for the tax credit, you had to close on your home by June 30th.  Yes, there was an extension but it wasn’t authorized by Congress until late at night on June 30th after almost every tax credit home buyer had bought their new house.  The extension really helped people who were delayed by banks on short sales and REO transactions.  August closings had nothing to do with the tax credit push and in spite of 24% fewer transactions prices still rose by 10.2% from the year before.  That’s positive!

On a personal note, I have always found Kathleen Lynn’s articles to be excellent.  I have a tremendous respect for how carefully she researches and analyzes the market.  You can read her entire article at http://tinyurl.com/KLynnHomePrices  If you want good information on the Bergen County housing market I encourage you to read the Real Estate Section in the Sunday edition of the The Record and to look for more articles by Kathleen Lynn.  You can get The Record online by going to www.NorthJersey.com

FHA mortgage loans are extremely important to the real estate industry.  The FHA insures, on average, 30% of all mortgages in the US so any change in FHA policy is big news and something like 70% of all first time home buyers use FHA loans.  Why does that matter?  Because the first time buyer is the home sale that drives the real estate engine.

On October 4th the FHA announced new credit requirements for mortgages which raised the bar for home buyers.  To get a 3.5% down payment loan, a buyer now needs at least a 580 credit score.  For home buyers with FICO scores of 500-579, down payments must be at least 10% and if your credit score is under 500 you’re out of luck – you won’t get a FHA loan.

At the same time, the up front mortgage insurance premium was reduced from 2.25% to 1% and the limit on annual premium increases was raised from .55% to 1.55%

Some people criticized the FHA for making it tougher to get a loan in Steve Bergsman’s excellent article on these changes, he quotes an expert as saying that while only 2% of all FHA borrowers have FICO scores under 580, 27% of them default.  Ouch!

What should be criticized, in my view,  are the wide FHA mortgage ratios allowed.  How about allowing up to 55% of your gross income to qualify for a FHA mortgage?  I think that’s a disaster in the making.  Do you think spending close to 75% of your take home pay on your mortgage makes sense?

Emi Kalici, the Weichert Gold Services Manager in my Tenafly office, said that Weichert Financial Services as a licensed FHA underwriter can be more relaxed with FICO scores for qualified Weichert buyers.  This sounds a whole lot beter for financially able people than widening their ratios recklessly.

 Bring your children or yourself this Saturday or Sunday night to the Tenafly Nature Center for their special event – the Haunted Forest.  It’s a fun and educational tour that is absolutely not scary.  After all, this is primarily created for children but animal loving adults will also enjoy it.  This program is both a lot of fun and educational as are all the programs at the Tenafly Nature Center.

If you come early, you”ll get to meet some live forest animals and when the sun goes down, you’ll go on a guided tour of the nature center forest where you’ll learn how the animals adapt to the night.  Once your walking tour is over, you and your family can enjoy refreshments and crafts around the campfire.  This is a fabulous family fun evening and one your children will remember.

 The Tenafly Nature Center runs many excellent programs for children as well as adults.  Very often they are sold out although there are still spots available for the Haunted Forest right now.  Call the Tenafly Nature Center now at 201-568-6093 to reserve your spot for the Haunted Forest.  When my son was little, the Tenafly Nature Center was a large part of our life in Tenafly.  It’s a great place and only gets better.  For a complete list of their public programs, click here.

  New Jersey’s Economic Development Authority (EDA) has a program that pays for the removal and replacement of underground oil tanks for qualifying homeowners.  Through it’s Petroleum Underground Storage Tank Program (PUST Program), if you occupy the house as your primary residence, earn under $250,000 annually and have assets of less than $500,000 (your home & retirement accounts don’t count)  New Jersey will grant you enough money to remove and even replace your oil tank. 

The application process requires documentation to prove your eligibility and a $250 application fee but that’s it for a homeowner who qualifies.  The PUST Program pays for the rest.  So for only $250 a qualified homeowner can have their underground oil tank removed and replaced.

Steve Rich of Steve Rich & Associates came to my office today to explain the PUST Program as he is a New Jersey certified contractor for this program.  As an approved contractor, he does a lot of oil tank removals under this NJ EDA grant program.  In fact, his staff will help you prepare and process your grant application. 

Because times are tough, Steve is willing to wait until you receive the grant money to be paid.  This is a win win for everyone.  Steve gets your business and you eliminate a potential problem.

Right now the grant money is still available.  Once it runs out (and there’s no way to tell when that will happen), it’s gone.   So while  it’s available, if this program applies to you, why not take advantage of it?  If your oil tank is leaking, there’s funding now for that too.  The best bet is to call Steve Rich at 973.458.1188 for all your questions or any other certified contractor you choose.

  Do you have a dog or just love pets because if you do, you won’t want to miss the first ever Woofstock sponsored by Tenafly’s Pet ResQ Inc. and the Tenafly Chamber of Commerce.  You don’t have to own a house in Tenafly to be part of this fun event – you just need to love animals.  If you have a dog, bring Fido along for the day and be part Woofstock 2010. 

Woofstock will be held from 10 am to 5 pm this Sunday, October 24th,  at the Tenafly Circle Park located at the intersection of Tenafly Road and Washington Street.  Along with the day’s event will be a dog adoption fair where you can find your new best friend. 

There will be a doggy talent show, agility courses, A Strut Your Mutt Costume Parade and training demonstrations for dog owners.  Dogs who are adopted will be professionally groomed by Best of Breed Salon (located in Tenafly).  This all day event has these and other activities planned throughout the day. 

Woofstock 2010 will be a great day for dog owners and anyone interested in man’s best friend.  Pet ResQ Inc is a wonderful organization who’s mission is saving abused dogs and finding them their forever home.  Come out on Sunday to have a great day and support this great organization and just maybe come home with a new family member too!

   The Bergen County Utilities Authority is hosting a special event this Saturday at it’s headquarters in Paramus NJ – it’s a one day demonstration and sale of a compost bin machine.  Featuring the home composting Earth Machine, you will learn how to create a rich compost for your lawn and gardens.  This will help you green up your property because rich compost soil reduces the need for chemical fertilizers. 

Many people who buy a home today want to be as green as possible and creating a compost does exactly that.  Growing flowers and a green lawn is part of owning a house; there’s nothing better  than a beautiful yard with blooming flowers on a sunny summer day.  Making it that way using a compost bin is an easy and fun family project.   

The Earth Machine normally sells for over $100 and is often out of stock.  The BCUA will be selling it on Saturday for $53 which is a great deal.  The sale and demonstration will be from 9 to 2 at the Bergen County Community Services Building located at 327 East Ridgewood Ave in Paramus NJ.  All you need is a check or a money order; no cash will be accepted. 

Cresskill is like  “A Tale of Two Cities.”  At over $2 million, the for sale to under contract ratio is 20 to 1;  at under $1 million, it drops to 5 to 1.  According to Jeff Otteau (www.Otteau.com) when you get to 5 to 1, you’re entering positive territory.  

The rarified world of luxury properties has suffered.  On top of the economic collapse, financing for these estates became extremely demanding with down payment requirements of 45-55%.  This recently adjusted to a realistic 20-25%.  For most of us the picture is different. 

The product mix moved higher this year.  Fewer homes should close under $350,000 and more at $350-450,000.  Homes are selling much faster – how about a 33% improvement in the $400-900,000 price range?  This is huge; today a mortgage requires more time due to new regulations.  This shows demand is up for Cresskill plus pricing is even. 

For most of us, Cresskill real estate is past the bottom and has stabilized.  Luxury real estate remains problematic; there is simply too much inventory and so much over pricing to get through.  For the heart of the Cresskill market, however, 2011 will be positive.  Stability should continue over the next few years; I don’t believe we’ll see any real upward movement before 2013.

What about interest rates?  At some point they will have to move higher but are still excellent at around 4.5%  On mortgages, the higher loan limits for Fannie, Freddie and FHA are being extended through September 2011 which helps us tremendously.

For the average Cresskill house 2011 will be better as we emerge from the most challenging housing market since the 1930′s.