If you consider that a mortgage is the biggest cost of owning property, then it’s easy to see how the combination of low interest rates and low prices have made multi family homes very popular.  Investors for multi family homes are coming out in large numbers.  Owner occupiers are no longer limiting themselves to two family homes as they are now purchasing 3 and 4 family homes as well.  In the past, it was rare to see an owner occupier buyer look at anything but a two family property. 

Other factors creating this increased demand are the law of supply and demand and the rate of return on multi family homes.  With new construction being so soft, few multi family homes are being built at a time when demand is rising.  More demand with the same supply equals higher rents.  Multi families also give better rates of return often than what you can get in a money market fund of CD.

All of this adds up to an increasing demand for Bergen County multi families.  Long term I can’t think of a better investment.

Through April comparing this year to last year  for single family homes, there are 8% fewer closings, barely 1% less in the average sales price and  only 9  more days of marketing time.  While the number of closings were up  in February, March and April had less but it’s not like we fell off a cliff - down 19% in March and 16% in April. 

OK, why isn’t this troubling?  Because last year to take advantage of the tax credit you had to be in contract by April 30th and closed out by June 30th.  One would think that the artificially high number of closings from the Homebuyer Tax Credit (which overheated the market for the first 4 months last year) would result in much worse 2011 figures. 

Let’s see how things look at the end of May.  I’ll be back to you on this then but for now it sure doesn’t look like the market has jumped off any cliffs this year.

Surprisingly Bergen County homes did better than anyone would expect. 

New Jersey MLS data shows that 10% fewer homes went under contract this January than last year and February seems to be following the same pattern.  However in 2010 the Home Buyer Tax Credit significantly fueled the housing market from January through April.  When you consider this, being down only 10% while losing weeks of time due to snow storms isn’t bad at all.

As we move into March and warmer weather, the Bergen County real estate market will stay on track and we’ll end the year with more transactions than we had in 2010.  Home buyers are active – we’re getting more people at our open houses, more calls and many more internet inquiries.  The signs are definitely here for a stronger market.  Despite having to climb over snow banks, the Bergen County real estate market now looks pretty good.

The truth is that real estate here pretty much stabilized and is poised to move forward in 2011.  Let’s check out a few towns to see how we’re doing on a local level:

Tenafly did very well.  Sales units in Tenafly were down by 8% but the average sold price rose 4%.  Teaneck also turned in a strong performance – units were down 14% and average sales prices were up 8%.  On paper Dumont didn’t do as well with 6% less sales and a 6% drop in the average sales price but a good number of short sales were to blame.  Cresskill has a large inventory of luxury homes so I kept it to $1 million sales.  Through $1 million, Cresskill had 19% fewer units at only 1% less in the average sales price. 

Bergen County beat the ”prevailing wisdom” because of our proximity to Manhattan, excellent schools, good commuting and diverse economy.  While Wall Street and the financial markets do employ many of us, there’s more to the Bergen County job picture than stocks, bonds and trades.  We have 4 major hospital centers in Englewood, Hackensack, Ridgewood and Teaneck employing large staffs of doctors, nurses and all sorts of support systems.  Bergen County is the most populous county in New Jersey and one of the largest in the US with over 900,000 residents. 

With all these advantages, it’s no wonder that things are better here.

Ok, I realize this may be a bit corny but to quote George C. Scott in the movie Patton – “Failure is un American.”  The heart of the American spirit is that we don’t quit and work together blending all our cultures into a stronger country.

We’ve all been through a time of enormous challenge.  While it’s not going to get better quickly, it will indeed get better, we all will prevail and the United States will remain the best place on earth.  2011 is going to be an improvement over 2010 and as a real estate agent, I am convinced we’re past the worst and are getting better every day.  The increase in buyer calls to the office, internet inquiries and traffic at open houses has been tremendous since mid November.  I’ll bet all of you a dinner on me that by the end of 2011 you’ll see that this is true.

Now I’m on to my Christmas and will talk to you again after the first.  Thanks for tuning in.  Barbara

For Bergen County in the NJMS Through November, comparing 2009 to 2010 -

79 fewer sales so far this year (6,614 as oppose to 6,693).  We were ahead from January through June and since then we’ve been down every month.  My feeling is that this is due to the tax credit pre-buying and the uncertainty caused by this year’s election. Still it’s only a 1% difference.

Dollar volume is up 2% and the average price is up 4% which is positive.  Although many towns see their bottom pricing at lower levels than in 2009, more upper tier homes are selling which raised the average sales price.  When a market recovers at both ends, it is truly recovering.

Homes are selling quicker too - marketing time is down 5% from 94 to 89.4 days.  This is significant because new regulations in 2010 made mortgage processing take much longer.  What does this mean?  People who are coming out to shop for a home are motivated.  They’re not window shopping as much as they were in 2009.

I’ve said it before and I’ll say it again – all signs point to a better year for real estate in 2011.  Although the number of sales is not increasing, higher dollar volume and average sales prices mean that real estate is improving. 

Here’s something else to think about – mortgage bankers are warning me that interest rates are about to go up.  If mortgage rates start to rise, that will certainly motivate people to take action.  We’ll have to wait and see what happens on that score.

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

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.

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/

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