New Jersey Real Estate Information

While there is always speculation about what is going to happen next in Washington, I wanted to highlight this story from CNBC's Realty Check regarding the possibility of another homebuyer tax credit.

Click the link to read this interesting article by Diana Olick of CNBC

Another Homebuyer Tax Credit?

As over half of 2010 is complete, many homeowners in Westfield are wondering if the real estate market has stabilized, and how their homes have held their value in the past 12 months, as many economists have declared an end to the recession.

While keeping in mind that the values and market activity varies tremendously from town to town and neighborhood to neighborhood, a look at the averages seems to confirm what we predicted for 2010 in our article at the start of the year. Here is an excerpt from that article when asked what we thought would happen in 2010:

"No one really knows for sure. All signs point to a very slow recovery, and most likely a flat year for prices and sales. Prices should remain stable, and show slight seasonal increases or decreases, if the data trends hold."

Here is that complete article for Westfield NJ Real Estate 2009 vs 2008

While the average prices increased about 12 percent as you will see below, I want to mention that in the first quarter of 2009, we saw nearly a complete freeze on residential real estate transactions, which caused prices to plummet in that 3 month period. Prices dropped about 10 percent in the first quarter of 2009 alone, so the year over year 12 percent increase to 2010 levels is merely a recovery of that rapid decline.

Thus, our prediction of a relatively flat pricing environment for 2010 seems to be accurate, though homes did sell much more quickly, due to historically low interest rates and the first time home buyer tax credit that expired in June.

Here is a summary of the data year over year comparison of 2009 to 2010 in the Westfield NJ Real Estate Market.

2009 Through July 31

Closed Sales: 161

New Listings: 1091

Average Sales Price: $686,597

Average Days on Market: 83

Sale Price to List Price Ratio: 95 percent

 2010 Through July 31

Closed Sales: 165 (relatively flat year over year)

**New Listings: 1361 (an increase of 25 percent from prior year)**

Average Sales Price: $773,577 (an increase of 12 percent year over year, but remember there was a steep drop in Q1 2009 of neartly 10%)

Average Days on Market: 54 (dropped nearly 30 days!)

Sale Price to List Price Ratio: 96 percent

What this means for Westfield NJ homeowners is very simple. It appears that homes in Westfield on average have held their value over the past year.

I will caution anyone thinking of selling, however, that this report is not a substitue for a detailed market analysis, as some price ranges outperformed others. Homes under $600,000 for example went up in value with higher demand, while higher priced homes have performed quite differently. These figures are just averages. For a more detailed report, homeowners can check out www.WestfieldHomeSellers.com for a more detailed market snapshot.

Sean Carroll is a Realtor with the Westfield team of Keller Williams Realty, and resides in Westfield. He can be reached via email at Sean@TeamCarrollNJ.com

A wise person once said "all progress is the result of change". That saying holds true in my life and in my business, as I am pleased to announce my affiliation with Keller Williams Realty.

I spent 4 and a half wonderful years at RE/MAX, and I am very grateful to everyone there for all the support they've given me. I truly would not be where I am today if it weren't for the terrific people who've helped me. This was a difficult decision, but as I examined the best options that would help me take my business to the next level, it became clear that joining Keller Williams was the right choice for me at this time.

As always, I am committed more than ever to serving my clients, and I am grateful to all of you for your support of Team Carroll. I look forward to continuing to serve you.

Warm Regards,

Sean Carroll

In our last look at Cranford NJ Real Estate at the end of March, I predicted that the 2nd Quarter Sales to "exceed" the 1st quarter sales. Seasonally, this is almost always the case, but with the first time home buyer tax credit in place through April 30, combined with historically low interest rates, and favorable pricing I expected an even greater surge in market activity.

As we complete the 2nd month of the quarter, it is quite apparent that the 2nd Quarter of 2010 will show a sizable spike in sales activity. In the entire 1st quarter, there were 29 closed sales in Cranford. So far in the 2nd quarter, there were 10 closed sales in April, 9 closed sales in May, and currently 43 listings under contract. This is a staggering number, as most of these properties will likely close before June 30, to comply with the tax credit requirements, thus more than doubling the number of transactions over the first quarter, and increasing 24 percent when compared to the same time period 1 year ago.

To illustrate with actual numbers

6 Months Ending April 2009

Closed Sales: 54

Avg Sales Price: $420,203

Avg Days on Market: 75

Month's Supply: 7 months of inventory. This means that if no new homes came on the market, it would take about 7 months for all homes to be sold at the pace of contract signings during that time.

6 Months Ending April 2010

Closed Sales: 79

Avg Sales Price: $406,689

Avg Days on Market: 73

Month's Supply:  Approximately 4.8 months of inventory

Most Real Estate economists consider a 6 month supply to be a balanced market, with anything less than 6 considered a seller's market. You guessed it. That's why we had SO many multiple offer scenarios in Cranford and so many contracts quickly on some of these properties.

***SNEAK PEEK AT MAY*** - The pace of sales has slowed slightly, and at the pace of May contract signings, the inventory has gone to about a 6 month supply, assuming a few more go under contract before end of the month.

How does this affect you if you are a homeowner in Cranford, or looking to buy a home?

The trend right now is that the pace of sales is slowing, but not stopping. We are no longer in a hot seller's market as we were in March and April, but we are by no means in a buyer's market either. Because rates are so low, and prices remain favorable, there is a healthy amount of sales traffic, keeping the inventory fairly steady. If you are selling, you can still sell quickly, and for a price close to asking, but you may get 1 offer instead of 3 if you price your home correctly. If you overprice by more than a few percent, you will still have difficulty selling, because there are enough competing properties for sale in most price ranges.

If you are a buyer, you should still make an offer quickly if the home is priced right, but chances are the should be at least a little less competition for each property.

I expect June to still be a solid month for Cranford home sales, but as we enter the summer, the seasonal trends should hold, and transactions should decrease until September, when they will likely increase again. In terms of whether the prices will go up or down, it all depends on how many new listings come online, and how that affects the supply/demand curve. If we tick up to 7-8 months of supply, prices will dip again. If we remain at 5-6 months supply, prices should hold steady, or rise very slowly.

For more information about the market conditions in YOUR neighborhood, check out www.UnionCountyRealEstateMarket.com

With the volatility and uncertainty in the financial markets this past week, it has gone widely unreported that mortgage interest rates have been incredibly favorable!

According to Bankrate.com, the average rate of a 30 year fixed in the US dropped from 4.94% to 4.87% nationally. This is still a GREAT time to buy or refinance your home.

Rates are extremely depending on your credit score, down payment amount (or percentage of equity) your income, and type of property, so be sure to speak to a mortgage professional about the best rates available to you.

We highly recommend Michael Campanaro of Wells Fargo www.MichaelCampanaro.com for all your home financing needs.

As we enter the 2nd quarter of 2010, its time to look back at the 1st quarter sales in Westfield, NJ, and to see which way the market is trending as we go into the seasonal peak selling season of real estate.

1st Quarter 2010

Closed Sales: 47

Avg Sales Price: $873,492

Avg Days on Market: 64

Avg Sale Price/List Price: 94.9%

Current Pending Sales: 60

What does this mean? Essentially, the first quarter outperformed last year's first quarter, as there were only 33 closed sales in Q1 2009, as we were at what most would argue the most challenging point of the recession.

With the first time homebuyer tax credit set to expire April 30, I expect that the Q2 numbers will exceed the Q1 numbers, and I also expect a slight increase in prices, especially in the first time buyer price range of homes priced $600,000 and below.

As we enter the 2nd quarter of 2010, its time to look back at the 1st quarter sales in Cranford, NJ for the sales numbers, and to see which way the market is trending as we go into the seasonal peak selling season of real estate.

1st Quarter 2010

Closed Sales: 29

Avg Sales Price: 387,648

Avg Days on Market: 85

Avg Sale Price/List Price: 96.7%

Current Pending Sales: 28

Month's Supply: 4.7 months of inventory. This means that if no new homes came on the market, it would take about 4.7 months for all homes to be sold at the current pace of contract signings.

Most Real Estate economists consider a 6 month supply to be a balanced market, with anything less than 6 considered a seller's market. You guessed it. That's why we had SO many multiple offer scenarios in Cranford. Right at this moment, there are more buyers than sellers. This could change in the coming months, but the 1st quarter of 2010 proved to be a good time to sell your home if you priced it reasonably.

What does this mean? Essentially, the first quarter substantially outperformed last year's first quarter, as there were only 11 closed sales in Q1 2009, as we were at what most would argue the most challenging point of the recession.

With the first time homebuyer tax credit set to expire April 30, I expect that the Q2 numbers will exceed the Q1 numbers, and I also expect a slight increase in prices.

Cranford NJ Foreclosure Report for 2009

Here are the statistics according to Realty Trac for Cranford NJ Foreclosures in 2009.

For these statistics, a 'foreclosure' is counted by Realty Trac any time a  homeowner receives any type of public notice, such as a Lis Pendens, a Notice of Default (NOD), or an actual auction or foreclosure sale notice.

In 2009, there were a total of 55 foreclosures in Cranford NJ. This accounts for approximately 1 foreclosure for every 158 housing units, or about .6% of homes.

This many not sound like a lot, and statistically its not, but if we track the trend, it was definitely going up towards the end of 2009. In the beginning of 2009, there were only 2 or 3 foreclosures being recorded each month. In December alone, there were 13. This causes statistics to be slightly misleading, as while there may have been a 100% or 200% increase in the number of foreclosures, when the numbers are this small, the percentages can be skewed very easily.

Let's compare Cranford to the rest of the State of New Jersey, Union County, and the US as a whole, here are the numbers for just December 2009:

Cranford: 1 out of every 671 Homes received foreclosure notice in December

Union County: 1 out of every 235

State of NJ: 1 out of every 345

United States: 1 ouf of ever 365

When examining these statistics, Cranford, while showing an increase in 2009, has still had FAR less foreclosures per capita than the nation, state, and county in December, even with the spike to 13 filings.

I expect this number in Cranford to rise a bit more through 2010, as the unemployment rate has caused a "Second Wave" of foreclosures and defaults, caused by lost wages. The "first wave" was caused mostly by sub prime and adjusting mortgages, which Cranford had less of than many more speculative areas of the country.

We are now 1 month into the new year, and compared to January of 2009, this year so far has been much more active in terms of buyer activity in the marketplace. One year ago, we were right in the thick of bank takeovers, massive Wall Street layoffs, and an unprecedented government stimulus package, part of which broadened and extended a first time homebuyer tax credit, which helped our local market tremendously in the 2nd through 4th quarters.

This year, while we are still battling 10% unemployment, and the effects of a deep recession, the real estate market in Westfield has shown signs that the bottom has passed, and sales remain steady or slightly improved year over year, but at lower prices on average. However, sales of starter homes ($500,000 and under) are selling extremely fast and have actually increased in price slightly in the past 6 months. When priced right, these homes are selling quickly and often with multiple offers, and this has led to a gradual loosening of the market in the upper ranges since people are starting to "move up" again if their jobs and income are secure.

Here is a summary of the year over year comparison of 2008 to 2009 in the Westfield NJ Real Estate Market.

2008

Closed Sales: 288

New Listings: 1446

Average Sales Price: $773,745

Average Days on Market: 76

Sale Price to List Price Ratio: 96 percent

2009

Closed Sales: 305 (an increase of 6 percent year over year)

**New Listings: 2542 (an increase of 75 percent from prior year)**

Average Sales Price: $693,463 (a decrease of 10 percent year over year)

Average Days on Market: 67

Sale Price to List Price Ratio: 96 percent

When examining these numbers, it is easy to see why the average sales price dropped 10 percent, as there was a surge in new listings on the market, especially in the first and second quarter, most likely attributed to the job losses in the financial sector in New York City, as many Westfield homeowners are employed by those institutions, and may have needed to sell their home due to job loss or relocation. As the year progressed, sales increased, and new listings slowed, which balanced the market somewhat, but not before prices dropped 10 percent.

What's Going to Happen in 2010?

No one really knows for sure. All signs point to a very slow recovery, and most likely a flat year for prices and sales. Prices should remain stable, and show slight seasonal increases or decreases, if the data trends hold.

The first time homebuyer tax credit is set to expire at the end of the 2nd quarter. If December sales were any indication, the sales of starter homes at the end of 2010 should decline, as buyers rush to get under contract before then, as they did in November of 2009 when the prior credit was originally set to expire. If the first time homebuyers don't buy at the same rate as they have been, either due to the credit expiring, or rising interest rates, there will likely be a slowdown in how quickly the unsold inventory gets scooped up. This will stifle price appreciation in the short term.

If jobs are created more rapidly, and interest rates stay favorable, one would expect homes to sell at a faster clip, demand to pick up, and prices to rise gradually. Only time will tell.

Sean Carroll is Realtor and Team Leader of Team Carroll at RE/MAX Supreme. To reach Sean for comment or questions, or for more information about the Westfield NJ Housing Market, or local real estate information, logon to www.TeamCarrollNJ.com. Or contact Sean at Sean@TeamCarrollNJ.com