The Bergen County Homes Blog

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.

Fannie Mae and Freddie Mac buy mortgages which means that they guarantee them. Without the backing of Fannie and Freddie, mortgage lenders have to find other investors to sell their mortgage loans to and those investors charge more so interest rates are higher. Fannie and Freddie backed mortgages are called conforming; the others are called jumbo. The limit on a conforming mortgage is $417,000 but that is about to change.

There’s also an intermediate level which is a special allowance for higher cost areas like Bergen County. Such mortage loans are at $417,000 – $625,000 with moderately higher interest rates than conforming loans. This is a super conforming loan but marketing folks have coined the phrases Jumbo and Super Jumbo. You’ll see a Jumbo Mortgage at $417-625,000 and Super Jumbo above $625,000.

OK, now you should have a good basic idea of how things work. Here’s where it gets interesting:

Fannie and Freddie are increasing the conforming mortgage loan limits to $729,750 on May 4th. This came about due to the economic stimulus package which was signed into law on February 17th. Wells Fargo will start taking applications for these loans on Monday, April 27th and I’m sure other banks will begin before May 4th too.

New Jersey MLS data shows that the 2008 average sales price for a single family home in Bergen County was $570,217. Even with a 20% down payment, this put a buyer into jumbo loan territory. In several towns it was often impossible for many buyers to qualify and is part of the reason that upper mid range homes have had such a hard time.

In the upper mid range market, it’s really been tough due to the restrictions on conforming loans. Loosening up lending for these homes creates more buyers for sellers. For real estate in Bergen County this is huge. Bergen County is the 18th most affluent county in the US; many of our towns have been severely impacted by the $417,000 limit and even $625,000 didn’t quite work.

For example, Tenafly had an average sales price last year of $915,581, Old Tappan was $1,147,159 and Woodcliff Lake was $838,309 plus many other Bergen County towns have scores of homes that will benefit. If you are a home buyer who’s looking at $850,000 homes, think of how this will help you! You won’t have to pay a point and your interest rate just dropped.

Think of the impact this will have on real estate in Bergen County and across the United States. Buying a home is never an isolated transaction. Real estate is a chain of events – there are homes sold above and below your own transaction so anything that happens in one price range affects it all. This is going to have quite an impact.