The Bergen County Homes Blog

If you’re a typical home buyer you’ll be on the web looking at all the real estate websites gathering information on homes for sale.  It’s really very easy to get plenty of information on the real estate market through the internet but its not very easy to get information on the communites where the homes are located or to get a feeling for a town.  If you’re thinking of buying a Westwood home  New Jersey Monthly Magazine will help you. 

New Jersey Monthly Magazine  has a simply great article on taking a day trip to Westwood that highlights the business district and all it has to offer.  Westwood has one of the best local business districts in Bergen County which has a very positive impact on the value of Westwood homes.  Many of the local stores, restaurants and boutiques have been in Westwood for decades and have gone through several generations of owners.  Westwood homes are always in high demand and the many features this town has to offer is a big reason why.  You can find more information on Westwood at the Borough Website at http://www.westwoodnj.gov/

While national foreclosure rates rose 15% during the first half of 2009, in New Jersey foreclosures are dropping. In fact, NJ foreclosures are down by 30% for the first six months of 2009 compared to the same period in 2008 according to Realty Trac. In May, the New Jersey Judiciary announced foreclosure activity for the first 4 months of 2009 was down by 20%. These figures certainly point to an improving housing market in New Jersey.

A lot of credit is being given to the programs New Jersey brought out in January to help homeowners avoid foreclosure. A special foreclosure mediation website was put up just to help owners avoid foreclosure by the State with a toll free hotline. The Star Ledger reported that although the number of homeowners helped has been small, the public awareness brought about by these programs has had a significant impact. Many homeowners took stock of their situation and acted to avoid foreclosure.

Another aid has been historically low interest rates which allowed people to refinance their mortgage into a more affordable loan. Supporting this is the fact that the New Jersey housing market hasn’t depreciated as badly as elsehwere; our house values have performed better than national averages.

According to Jeff Otteau, the renowned analyst of the New Jersey real estate market, this makes quite a difference. “The reason that borrowers walk away and mail in the keys is because not only are they having a hard time making their payments, but their houses are worth less than their mortgage balance,” Otteau said.

Bergen County foreclosure rates, as reported in The Record on July 16th, are 1/206 while New Jersey is 1/146 and the US is 1/84. As usual, Bergen County outperforms the general real estate market.

While we can’t predict the future, it’s also true that a 30% drop in foreclosures will certainly stimulate consumer confidence in NJ housing and that is huge. For Bergen County homes, with it’s consistently superior performance, this is even more the case.

When the Home Valuation Code of Conduct went into effect by Fannie Mae and Freddie Mac on May 1st, appraisal protocols for mortgage loans changed. To protect consumers, loan officers, mortgage brokers and real estate agents can no longer choose appraisers.

Why is this so important? Because the mortgage bank and the home buyer rely on an appraiser’s determination of value; a lot of abuse and fraud has been uncovered. If, for example, an appraiser sets a home value to fit the sales price, that’s obviously wrong.

I just had a short sale listing close; the bank took nearly a 50% loss on a $1.8 million loan. The homeowner had been building a new home for himself. When he gave me his loan amount, I was stunned. There was no way to justify that mortgage loan and yet it happened.

To comply, banks no longer have their own appraisers; they use real estate appraisal services with pools of appraisers from which appraisers are randomly selected. This creates an added expense for the mortgage process and increasingly results in appraisers valuing homes who’ve never been to the area before and aren’t members of the local MLS. Recently my office experienced this.

An office listing had an appraisal that was ridiculously low. Both buyer and seller knew this but the bank, which had to use the appraisal, could no longer justify the mortgage. The appraiser had never been to the area before and used the wrong MLS. Bergen County homes are listed in the New Jersey MLS; the appraiser used the Garden State MLS which has only a few Bergen County listings. Without expert knowledge of the local inventory and no access to all the data, he wasn’t able to do a correct valuation.

Eventually things will straighten out but until it does, there will be higher costs to obtaining a mortgage for home buyers and for both buyers and sellers, there will be appraisals that unfairly cancel mortgages.

Bergen County homes have done better than most in the US real estate market but like elsewhere, our home values have depreciated over the past few years. For many homeowners this has created a horrible situation where they are facing a short sale or foreclosure.

For those who have seen their mortgage rates reset to a loan they can’t afford, the situation soon deteriorates to a short sale or foreclosure because their loss of equity makes it impossible to get the appraisal needed to refinance to today’s low interest rates. This is why the Federal Government stepped in to help.

On July 1st HUD Secretary Shaun Donovan announced that Fannie Mae and Freddie Mac will begin refinancing mortgages with loan-to-value ratios as much as 125%. This means you can be 25% negative in the value of your house and still refinance. The idea is to try to match the loss of equity so that homeowners who’ve been paying their mortgages and have good credit can stay in their homes.

While this is just part of the Bergen County housing market, it allows many people to keep their home and helps stabilize real estate values by avoiding foreclosures and short sale transactions.

If this works for you or someone you know, get in touch with a licensed mortgage banker. You need a top level loan officer’s help to qualify for this program; if you need a recommendation, just let me know.

Crunching numbers to analyze the real estate market has taught me a lot. Over the years, I’ve found that the relationship between the number of homes for sale and under contract is a great indicator of how the housing market is doing. When that ratio is 2:1, the housing market is strong.

Ok, I know, it’s 2009 and the sky is supposed to be falling but it sure isn’t in Dumont. Right now Dumont has 50 homes for sale and 31 under contract which is way better than 2:1. Plus the time it takes to sell a home has improved dramatically – 72 days for under contract and 93 days for the 25 sales we’ve had over the past 4 months. No matter how you look at it, Dumont homes are rocking! There are several reasons for this.

Dumont is affordable. Property sizes are not too big and not too small which results in a moderate sized house. Dumont typically has what most of us would call a normal sized yard with a normal sized house. This means Dumont real estate works for most of us.

Dumont's school district is very good with a lot of parent participation and a broad range of programs. The town has excellent community services as well. The Borough of Dumont's Official Website is worth a look – it has a lot of information and shows you the strong community spirit that’s here.

The business district is very active with a good mix of retail stores, services and offices. Major retailers have invested in Dumont such as a CVS drug store, Wachovia Bank and Stop N Shop supermarket.

NYC transportation is great – there are plenty of express buses at rush hour and you don’t have to make any changes. Just grab a seat and read the newspaper on the way to work.

Dumont has everything that most people want, is affordable for first time buyers, can handle the more affluent move up market and is a great place to live. No wonder the real estate market is doing well. This does not, however, mean that prices are going up. They aren’t but they’re not sliding down either. If you’re thinking of making a move into Dumont, as a home buyer you’d be smart to do it sooner than later. Things here have turned positive.

Every once in a while, a home comes along that’s special – there’s just something about it that speaks to you. We just listed this magnificent new home designed by an award winning architect and it is an amazing house. An elegant residence, this brick colonial home has old world charm and yet the most sophisticated modern features. Located in between Demarest and Alpine on the Closter East Hill, this gorgeous home is offered at $1,650,000 and has 6 bedrooms and 5.5 baths. Among it’s many exceptional features are a Media Room, Third Level Game Room, Private Gym, Wine Cellar and sophisticated electronics. This special property is nearly finished and will be ready for viewing starting this weekend (the painters were busy today). It’s just such a gorgeous house!

Buying a home should always include a home inspection. Even if the home is new construction, it’s best to have the guidance of a professional home inspector. In New Jersey, home inspectors are licensed by the State but there’s also another resource for you – the American Society of Home Inspectors known as ASHI.

ASHI was started in 1976 by a group of home inspectors who wanted to set standards of practice and create a learning center for inspectors, buyers, sellers and real estate professionals. Every member of ASHI must take a Standards and Practices training module and agree to abide by their Code of Ethics. Today ASHI is the largest trade organization of home inspectors in the US. I consider ASHI to be a wonderful organization and only recommend home inspectors who are both licensed in New Jersey to perform home inspectors and members of ASHI.

BTW, when you’re on the ASHI website, be sure to check out the Virtual Home Inspection

You should always attend your home inspection. It’s one of the most important parts of buying a house plus you’ll learn a lot about your new home. The average inspection takes around 3 hours but this varies on the size and condition of a home. Be sure to bring a pen and pad so that you can take notes during the inspection. The inspector will tell you about the home’s condition and teach you how to maintain various aspects of it.

If you are selling, it’s a good idea to inspect your home before it’s for sale. An inspection can uncover problems you never knew existed and gives you an idea of what a buyer will hear.

The New Jersey MLS is the primary multiple listing service for all of Bergen County and they do a simply outstanding job in so many ways. Not only do they have comprehensive information on homes for sale in Bergen County but they also have statistics on all aspects of the real estate market from the sales in their system.

What their data shows us is an improving market for homes in Bergen County. The number of days it takes to sell a home has been decreasing since March. If you take a look at the NJMLS Average Days on the Market Graph you’ll see this very clearly. While it’s still taking more than 100 days to get a home sold, we’re closing in on this number and I’ll bet we’ll be under 100 days to get a home sold very shortly.

You should also take a look at the Average Sold Prices Graph which again shows a definite move up although this time it begins in April. However, this makes sense because almost all first quarter sales come from contracts written during the prior year. What this graph shows it that we’re moving toward an average home sale of $500,000 and that’s positive.

I’m not saying that house prices are going up – prices for homes are not going up. In fact they will continue to go down for a while yet but you can only get a rise in the average sales price for a home when more expensive homes are selling. That happens when the real estate market is getting better throughout all price ranges.

First time home buyers have been kept in the market by such things as the First Time Home Buyer $8,000 Tax Credit which, one week ago, was added to FHA backed loans and low mortgage rates. As everyone knows, it takes the first time home buyer to get things moving and it sure looks like this is happening. At least that’s what the New Jersey MLS data shows.

On January 27, 2009, a home at 221 Churchill Road was listed for sale at $1,590,000. This was an extremely well kept original D’Agostino ranch home on a gorgeous acre lot. It was listed twice – as a single family home and as a building lot. On the Tenafly East Hill, original homes are sought after on their acre properties so that they can be removed and a new luxury home constructed.

A short while after being listed, the price was reduced to $1,425,000. Only 2 weeks later, on February 23rd, an offer was accepted and the home went into the Attorney Review process. Those of us who watched the market took note of this transaction because it demonstrated the strength of the demand for new luxury homes in Tenafly.

What happened next is even more intriguing as an indicator of the real estate market for homes in Tenafly.

On May 22nd the home came back on the market for sale. I called the listing agent who happens to be a very nice person and she told me that the owners were purchasing a short sale property out of the area and that their buyer had become frustrated with the long time it was taking and wanted to close on a home within the near future so the contract fell apart. Short sale transactions can take many many months – sometimes as much as one year. If you are buying a short sale and your buyer is not prepared to wait 6-9 months, it’s not going to work in most cases.

The home went back on the market on May 22nd at the start of the Memorial Day Weekend which, I am sure you will agree, is not the best time to start marketing a house. After all, a lot of your market is on it’s way out of town. The house had multiple offers and it was in Attorney Review again in 5 days.

What this tells you is that the market for luxury homes in Tenafly is still strong and that the market is stronger now than it was at the end of February. But wait, you say, if things are so fine and dandy on the Tenafly East Hill, why are there so many homes for sale? Because they are not marketed correctly. It really IS as simple as that. It is true that upper tier properties are having a hard time in this market but it is not true that you cannot be successful. However, you have to put yourself in front of your buyer and the homes that are for sale there are marketed using traditional methods which no longer work. That is the long and short of it.

When people decide to buy a home they naturally start to look at the real estate market, do some number crunching and find statistics which explain the market trends. Lately, a statistic on homes that’s been quite popular is the absorption rate.

Absorption rates simply put tell you how long it will take to sell off the existing inventory of homes. This shows you how properties are selling; it’s measured in months as in how many months it will take to sell all the homes for sale. Understanding market activity is important but I think that looking at absorption rates this early in the year can be misleading.

No matter the economy, the housing market has a unique rhythm of it’s own. Most homes for sale go on the market during the early part of the year and are sold during the summer so statistics for the first few months of the year that track the relationship between sales and available inventory can be tilted in the wrong direction. In fact, absorption rates at this point can be very confusing if you look at the report appraisers use when they do an appraisal on a house. This is the 1004MC Report.

Let’s look at Tenafly, NJ. If you go back 12 months from today, the Tenafly real estate market for homes really looks weird. For example, take a look at the number of Active Listings – it looks terrible doesn’t it? Well, what would you expect for this time of year? It’s always larger now because more houses are on the market between March and June. At the same time, how long a home is on the market for sale is currently half what it was previously. That is extremely important. In truth, Tenafly houses are selling very well. Tenafly homes are always in strong demand. The New Jersey MLS 1004MC Appraisal Report for Tenafly can be found at tenafly-1004mc-report