The Bergen County Homes Blog

Here is a statistical report on the market for River Vale homes from 2007 through 2009.  In looking at the River Vale real estate market data from the New Jersey MLS, you’ll find that while the number of homes sold in 2009 decreased by 21% the depreciation rate was only 3%.  The most active part of the River Vale homes market, $500-650,000, had 10% fewer sales and 2% depreciation.  Fewer sales and less depreciation is the classic pattern of a recovery.

What has been the most difficult part of the market, however, is the $600-800,000 price range but I expect this to change dramatically in 2010.  All in all the market for River Vale homes is definitely improving and should be strong this year. 

 River Vale, NJ – Year to Year Comparison

  Sales Analysis              2007    2008    2009

 $0-400,000                  1          6          7                                 

$400-450,000              7          5          8         

$450-500,000              7          8          6         

$500-550,000              8          8          9

$550-600,000              12        10        11

$600-650,000              14        11        7

$650-700,000              7          8          3

$700-750,000              6          13        2

$750-800,000              7          6          2

$800-850,000              6          2          4

$850-900,000              4          0          3

$900-950,000              3          3          2

$950-1 million               3          1          3

$1-1.25 million              6          3          2

$1.25-1.5 million           3          2          2

$1.5 million+                 1          0          0

Total                             95        86        71 (-21%)

                                           2007                        2008                  2009

Avg. List Price                   $736,837                 $679,288            $657,208

Avg. Sales Price                $708,787                 $647,697           $628,437

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My projection for Bergen County real estate is right on target - our housing market is improving.  New Jersey MLS data, bank appraisers and housing reports all say the same thing:  We have clearly bottomed out and are in a period of stabilization.

Today’s ratio of homes for sale to under contract is 4 to 1; early in the year it was in double digits.  Last spring Bergen County was classified by the mortgage industry as an “area in decline” meaning that values were falling.  Appraisers were deducting 1% per month of value; if a home appraised at $200,000 and was closing 2 months later, the appraisal was fixed at  $196,000.  Bergen County’s housing market is no longer classified as “in decline” and a Valley National Bank appraiser on Monday told me that price depreciation has ended.

Jeff Otteau in his latest real estate newsletter termed the NJ real estate market’s performance “remarkable” and forecast continued improvement.  The monthly Credit Suisse agent survey said that for the first time in a long time a majority of agents reported positive home buyer traffic and houses selling quicker.

With all time low interest rates, prices no longer dropping and falling inventory levels, there should be no surprise to find stability in the Bergen County real estate market.

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If you are a home buyer and you qualify for the first time home buyer tax credit, time is running out for you to find a home.  You must buy a home by November 30th and because getting a mortgage these days often takes 45 days, many buyers feel pressured to make a decision now.  As a result, a first time home buyer who qualifies for the $8000 Tax Credit may find himself scrambling to get into contract this week.  However, I’m wondering if some of you aren’t making a mistake.

$8000 is nothing to sneeze at but a buyer may be missing out on a home value that far exceeds the $8000 credit – short sale opportunities are still available.  There are many homes for sale with steep discounts because they are a short sale and you may find a house that is a better “fit” for you in a short sale than trying to buy a home that you really don’t love just because of the tax credit.

In the New Jersey MLS this morning, searching for short sale homes shows that of the 3,796 single family homes for sale, 352 are a short sale.  There are also many that are described as potential short sales.  For our purposes, let’s say that a bit more than 10% of the Bergen County housing market is a short sale.   This figure has been pretty constant this year.  The bottom line is that there are other opportunities out there.

Even if you can’t find a home that works in time for the tax credit, you shouldn’t go into contract on something that isn’t the right home for you and your family.  Opportunities come in many ways.

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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.

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There is a new thief who preys upon homeowners who must put their home on the market as a short sale. Simply put, a short sale occurs when a homeowner can no longer pay his mortgage, has no other assets and the loan amount is greater than the home is worth. As a result there is a shortage between what’s owed on the home and it’s market value. The only way a homeowner can sell his home is by getting the bank to accept this shortage, thus the term “short sale.”

These new thieves market themselves as having all the solutions to your problems because they have a “special” ability to negotiate a short sale with the bank. Nothing could be farther from the truth. What really happens is that a desperate homeowner is taken advantage of by these horrible people because the truth is that they are completely unnecessary.

Realtors do short sales all the time. If you must put your home on the market as a short sale, your listing agent can do the work and negotiate with the bank on your behalf. You can also ask your attorney to do this for you and many people do. What you don’t need is to encumber yourself with an unnecessary expense by hiring one of these charlatans. They are today’s version of the proverbial “snake oil salesman.”

I have worked on short sale transactions successfully. It is a tremendous amount of work and takes a long while. Everyone involved needs a lot of patience but eventually things do work out. Buying a home that is a short sale means a long wait for the buyer. Sometimes a buyer will cancel his contract out of frustration – it takes months and months to see if the mortgage bank will accept the buyer’s offer. But, hiring one of these thieves will not help you – it only wastes your money on these frauds. Every bank has it’s own unique process and no one can make a bank move any faster.

Don’t allow a predator to hurt you – if you have any questions, email me and if I don’t know the answer, I’ll find someone who does.

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Since the beginning of March the housing market for homes in Bergen County has really picked up and as we are now nearly through April, I thought that I would take a look at the MLS data to see if what I’ve been seeing is really happening. After all, most real estate agents are a pretty optimistic bunch so I just wanted to go into the New Jersey MLS and check.

Here’s what I found – things truly are picking up. Real estate is improving most definitely; it’s not dramatic but haven’t we had enough drama over the past 9 months? It’s steady and that’s good. Take a look at the figures below and you’ll see what I’m talking about. More buyers are coming out to look at homes and more homes are taking offers. Here are homes that came on the market for sale and which went under contract so far this year:

Jan – 1,232 Active/286 UC = 4.3 to 1 ratio
Feb -1,255 Active/335 UC = 3.8 to 1 ratio
Mar -1,693 Active/443 UC = 3.8 to 1 ratio
Apr -1,311 Active/413 UC = 3.2 to 1 ratio

The April figures are through today, April 23rd, and they certainly indicate continued improvement for Bergen County homes. What hasn’t been so clear are the Days on the Market figures but you really can’t get a sense of where that’s going until we’re further into the year because almost all sales in January and February originate from the previous year. But in March it took 110.64 days to sell a home and so far in April it’s been taking 103.59 days to sell a home which is a positive change.

The real estate market is always more active during the spring and early summer months and the pattern that is developing is quite normal which is excellent. For a home buyer, this is really a great time to buy a home and it seems that increasing numbers of people are sensing this and acting.

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What Can We Expect in 2009?

I can answer this with one word – improvement. I had projected 10% depreciation but that was before the stunning sub prime mess was revealed. While we have “Monday Morning Quarterbacks,” the truth is virtually no one knew of this growing menace. The Tenafly market for homes in 2008 ended with 25% fewer sales and 18% depreciation.

Yet Tenafly homes did better than most; our market is more resilient than you’d think. Selling a home took less time in 2008 and first quarter figures indicate we’ll do even better this year.

Appraisers are still deducting 1% per month but say this will end later in the year; Jeff Otteau, the renowned analyst of New Jersey’s housing market, announced in mid March that 2009 will end with 9% depreciation statewide. This dovetails with a second half recovery; homes in Tenafly will see it during the fourth quarter.

By recovery I do not mean that prices will go up; they won’t. They will stop going down and the market will stabilize. We’ll stay there for another year or two before any upward swing bringing us to 2012 or later.

Although unemployment will continue to increase over the next several months, it should level off by year’s end. Unfortunately unemployment will not improve quickly. For now we can only estimate how this will affect our market; its impact takes a while to be felt.

But Washington funded the FHA to continue lending and increased the tax credit to $8,000 with no payback required. This enabled first time buyers to get in the market. With the lion’s share of price depreciation done and mortgage rates so low most of us have never seen this, home buyers are back in the market. Activity has really picked up since March 1st with no signs of slowing down.

What is certain is that Tenafly real estate remains one of the most in demand markets in the NYC metropolitan area. This will not change. While we can’t escape the storms of life, the truth is that Tenafly weathers them better than most in Bergen County and the New York City area.

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The figures are in and the real estate market in Bergen County is doing OK.  It’s still a buyer’s market for homes but you can see some signs of improvement.

In January I had written that the real estate market in Bergen County would shift during the 4th quarter of 2009 and stabilize.  From then on for a few years we would be working in a narrow range before turning upward again.  This time it would take longer than it did in the early 90’s to rebound fully but being stable is good.  So far my projection is still on target.

Most of the reports at that time were for this to happen once we were solidly in 2010 – well, the media reports are singing a different song because things have changed.  And so has the market.

If you look at the number of homes coming onto the market and going under contract, what you’ll find is very interesting.  For the homes becoming active in the New Jersey MLS, there’s been an 11% drop during the first quarter of 2009 but the pace of homes going under contract is the same this year as it was last year.  Do I hear the word stable anywhere?  Yes, this is indeed a sign of stabilization and that’s, to quote Martha Stewart, a good thing.

For the first quarter in both 2008 and 2009 the Active to Under Contract ratio is 3.9 to 1 in the New Jersey MLS data.  This means that the pace of home sales is maintaining itself and it’s also quite respectable – the ratio of a strong seller’s market is 2 to 1.

Looking closer to see what happened we find that in 2008 the rate at which homes became active was pretty normal – a gradual progression as you moved more into the year.  But in 2009, January and February were anemic and then we had a 32% explosion upward in March.  Do you think that the spring real esate market is back in Bergen County?  I sure do.

Home buying activity has really picked up since March 1st and home sellers have correspondingly jumped into the real estate market.  Why would they wait until now to put their home on the market for sale?  Because the atmosphere was so negative at the end of 2008 that it made many homeowners hold off.  What’s changed?  Well, just to mention a few items – the $8,000 tax credit, liberalization of FHA mortgages, even lower mortage rates, home prices not seen in nearly 8 years and the natural spring rhythm of home buying.

While home values are still going down – another 5% for the rest of this year – I still feel that the market will be stabilized by the 4th quarter.  What we’ve seen so far this year in maintaining the pace of sales and in the recent surge in home buying activity certainly point to this and also to a good spring market for Bergen County homes.  In fact, I won’t be surprised to learn that the bottom of the real estate market in Bergen County was the end of 2008 and the very beginning of 2009.  2009 will be a year of change.

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There has been a noticeable increase in the number of people looking at homes over the past two weeks.  We’re seeing more buyers coming out on Sundays to our open houses, more calls into our offices and more web responses to our internet postings.   The Bergen County real estate market has been very very busy.

At the same time, the real estate inventory is growing daily as more and more people are putting their homes on the market for sale now that we’re safely past the snow season.  Most homehomes owners do not want to sell their home during the winter weather so having the number of homes for sale grow significantly at winter’s end is quite normal.

The reason for home buyer activity is improved market conditions.  Prices are down substantially from 2004 (by 20 to 25% in most areas), mortgage rates tumbled over the past 2 weeks and one of the most respected analysts of New Jersey real estate,  Jeffrey Otteau, announced last week that New Jersey real estate will depreciate another 9% in 2009 and then stay at that level in 2010 as the real estate market stabilizes.  For many home buyers, this combination of factors made buying a home now a great idea. 

It will be interesting to see if this pick up in activity continues and for how long.  I have a funny feeling that the “smart money” is buying a home now.  Only a lucky person picks the market bottom but I must say that we’ve got to be pretty close to it now.

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The New Jersey Association of Realtors publishes a report every year on the characteristics of people who buy and sell homes in New Jersey.  The National Association of Realtors has it’s own buyer and seller profile but naturally that’s on a national scale.

There are some very interesting facts in this report and you might just be surprised by a few.  Here are some highlights from the New Jersey Association of Realtors profile of home buyers:

• The median age of New Jersey home buyers is 36
• First time home buyers had a median age of 30
• 56% were married couples
• 21% were single females
• 10% were single males
• 49% of home buyers were first time buyers
• 64% had no children under 18 living with them
• The #1 reason to buy a home – a desire to own your own home
• The #1 reason for deciding when to do it – it was the right time in their life
• Top reason to choose the location – quality of the neighborhood
• 2nd reason to choose the location – convient to their job
• 68% of all purchases were detached single family homes
• 89% used a fixed rate mortgage
• 72% used the internet frequently to search for a home; 17% occasionally

There are two key items here ito note - 49% of all buyers in 2008 were first time home buyers and they decided to buy a home because the time was right for them.

First time home buyers are crucial to keep a market moving – without them, a real estate market will collapse because they are the first cog in the wheel that drives the real estate engine forward.  It’s also interesting to see that no matter the external factors at work (economy, interest rates, etc), it still comes down to when it’s the right time for me.  If you want a copy of the full report, just email me.

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