The Bergen County Homes Blog

Proximity to NYC,  great schools and a wonderful suburban lifestyle make buying a home in Bergen County, to quote Martha Stewart, a “good thing.”  Because Bergen County homes offer these advantages, buyers come here no matter the economy or housing market.  The Bergen County real estate market regularly outperforms all other counties in New Jersey and this is true today.

Taking a look at the market through May, we are significantly ahead of where we were last year.  In 2009 there were 2,011 sales and this year 2,536 for a gain of 525 units and a 26% improvement.  The average sales price decreased by 3% because more of the homes sold this year were less expensive than in 2009 but they sold quicker (5% fewer days on the market) and that’s positive.

These figures are from the New Jersey Multiple Listing Service and I have their graph here for you.

When June numbers are in, I expect this trend to continue.  The question is how much of this is due to the tax credit and to the demanding terms of jumbo loans.  With formidable down payment requirements, the jumbo loan has really put a damper on the market for more expensive houses along with the negative economy.  Very recently these demands have been relaxed and so we’ve seen a real pick up in such places as Englewood Cliffs, Franklin Lakes, Saddle River and Tenafly.   Based on both the NJMLS data and the activity we’re seeing in all of our offices, there is a significant improvement in the demand for Bergen County real estate so far this year.  I’ll continue to keep you updated throughout the year.

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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/

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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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One of the special advantages of living in Bergen County, at least from my point of view, is our gas and electric service utility – Public Service Electric and Gas.  Go to their website at http://www.pseg.com where you’ll find excellent information and their terrific Worry Free Contract system.

PSE&G has very reasonably priced maintenance contracts on your gas and electric heating, air conditioning and appliances that I always recommend to my clients.  One of the best values you can find in Bergen County when you buy a house is their Worry Free Contracts and especially their gas furnace maintenance program which only costs $5.90 per month for parts and labor.  Go to their Residential Worry Free Contract Enrollment and scroll down the page toward the bottom where you can see the a la carte menu or you can use the bundled options at the top of the page.  The cost is billed monthly on your utility bill which makes this affordable service even easier to handle. 

It just makes sense, especially now that the heating season is almost here, to get yourself protected.  I always recommend to my clients who have gas furnaces in their home that they at least get this coverage.  It’s simply the best deal around at an annual cost of $70.80 for parts and labor with no deductibles. 

When you buy a home the last thing you need is an unexpected bill for a furnace repair – at $5.90 per month you’ll have peace of mind.  Trust me – it can happen any time.  Years ago I had a 3 year old furnace that stopped working – it needed a new circulator pump.  PSE&G came in a few hours and replaced it.  No problems after that and it was well worth the $5.90 bill that month!

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Bergen County, like most other locations, is not an easy place to be a tenant if you have a dog or cat.  Unfortunately, too many irresponsible pet owners have made landlords leary of allowing any dogs or cats to be part of their tenant’s family.  With the increasing popularity of small dogs and the perception that they are less of a problem, such as a designer dog, you can find that some buildings will allow a dog if it’s less than 30 pounds.  However, more and more buildings will not allow any pets at all. 

If you are considering a rental in a condominium or co-op building, it is imperative to verify what the regulations allow.  Just because you see a dog or cat in the condo or co-op when you’re looking at an apartment doesn’t mean that the rules haven’t changed. 

What I suggest to my rental clients in situations where there are no iron clad rules forbidding pets is to offer an additional security deposit for their animals.  I call it a pet security deposit and often this allows a pet owner to secure the rental unit they want.  Sometimes a landlord welcomes dogs and cats. 

Here’s a new rental listing by Alexis Schmid of my office with a landlord who allows cats and dogs.  It’s a 2 bedroom 1 bath rental apartment in this neat two family home.  At $1,300 per month in the town of Westwood, NJ, it won’t last long.  Welcoming pets is a smart idea – the landlord will get his apartment rented quicker and probably won’t have any vacancy cost.  If you are in the area, have a dog or cat and are looking for a 2 bedroom apartment, call Alexis at 551-265-5929 before it’s gone.

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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.

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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.

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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.

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