The Bergen County Homes Blog

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.

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.

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!

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.

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.