Home Buying in East Orange>Question Details

G Alexander, Real Estate Pro in New Jersey

Do you think the residential market is trending upwards?

Asked by G Alexander, New Jersey Sat Mar 19, 2011

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Joan Braunschweiger’s answer
To add to what Lyle said, rising interest rates will also put downward pressure on home prices.

The foreclosure mess, rising interest rates and continued job insecurity don't bode well for RE in the next few years from a seller's perspective.

However, buyers who are financially capable may find home prices to become increasingly affordable. Rising interest rates may take away purchasing power but if home prices continue to drop as a result it may actually benefit buyers. Mortgages can be refinanced down the road but the purchase price doesn't change. During the years of double digit interest rates many people made out very well because they were able to buy properties for rock bottom prices and when the interest rates came back down, they were able to refinance at a much more attractive rate.
1 vote Thank Flag Link Sat Mar 19, 2011
While each local market is different, most of the national economic projections from economists at B of A, Moody's, S & P, Morgan Stanley, Case Shiller, etc. are projecting prices sliding another 5-10% in the first half of 2011 (from Fall 2010 prices) and then the market bottoms out. This is due to the huge shadow inventory of distressed properties which the banks will be releasing into the market in higher numbers this year and for the next 2+ years that will drag prices down and keep them down (don't expect to see Fall 2010 prices again until 2012 / 2013).

This article from the New York Times sheds more light on the issue for New Jersey. Note, according to the article, New Jersey has the country's highest backlog of Shadow Inventory.

A ‘Shadow Inventory’ Dampens Winter Market
1 vote Thank Flag Link Sat Mar 19, 2011
Hello Gershon!
The sun shines on some communities more than others. Real estate value, though, is affected in large part by what is happening in that community.

But national trends can't be ignored. National trends affect consumer confidence and enthusiasm. Even developments internationally can push down mortgage rates. BTW: The rate are lower this week because of what is happening abroad.

Here in Boulder County, Colorado, values have held and sales are seeing increases here and there. Inventory is thinning.

The city of Boulder has fared well against strong national currents, including the downturn in real estate. What should that tell you about the prospects for Boulder and Boulder County?

The story here: Stable community grounded by a university, several gold plate corporations and federal agencies coupled with unusual entrepreneurial zeal. Key industries: aerospace, high technology, energy and research. Newer activities are taking hold, including a battery maker for electric cars as well as alternative energy technology. NASA will announce any day now the location for an aerospace technology park. Conoco-Phillips is bringing a massive research facility to the area.

National trends are driving these local developments.

Naturally, sellers are going to wait for these strong economic influences to boost home prices and sales. A developer is looking at bringing a massive home project to a corner of the county nearest the two largest transportation corridors.

We're enjoying the sun here.

PML of Longmont, CO
1 vote Thank Flag Link Sat Mar 19, 2011
Professional code of ethics???
The question doesn't ask if anyone KNOWS if the residential market is trending upwards, rather Gershon appears to be seeking an opinion.
And real estate agents certainly have plenty of those.
1 vote Thank Flag Link Sat Mar 19, 2011
Hi, The trends will differ accross the country but on a whole I believe so. The NAR believes so as well stating that the uptrend in existing-home sales continues, with January sales rising for the third consecutive month with a pace that is now above year-ago levels. It's definitely starting to come back in my area, Westchester County NY. We are in an area that tends to retain its value because of location, schools, and amenities.

Christopher Pagli
Licensed Associate Broker
Accredited Buyer Representative
GREEN Designated Agent
William Raveis Legends Realty Group
1 vote Thank Flag Link Sat Mar 19, 2011
Real Estate is all a VERY local numbers game. It varies widely from state to state, city to city, and even neighborhood to neighborhood. The best person to answer that would be a LOCAL real estate agent.

That being said, no one has a crystal ball and we can't foresee the future. We can answer what has been going on over the past month, 3 months, 6 months, etc. Past gains are not necessarily indicative of future returns. If you want my opinion on a national basis, I think home prices have stabilized and will remain mostly flat for the next year or two. Nearly 1 in 3 homes on the market currently are either short sales or foreclosures. That number doesn't seem to be reducing either. In Real Estate, it is called a "shadow market" or "phantom market" in that many of the homes that are in foreclosure are not even on the market yet and may not be on the market for a couple of years.

Does that mean that now is not a good time to buy? Absolutely not! Now is a great time to buy!

1) Housing prices are low and look to have stabilized. Your risk of losing money is small. (again, confer with a local agent regarding local trends. Your area may not be "out of the woods" yet.)

2) Interest rates are still low.

3) Economists are starting to use the "inflation" word, and some are even talking about the possibility of "hyperinflation". When this happens, interest rates will likely rise significantly. For every $100,000 that you mortgage, a 1% rise in interest rates increases your mortgage by over $60 per month. While that not sound like much for a $100,000 loan, consider someone buying a $350,000 home. That will mean the difference of more than $210 per month.

4) The average annual appreciation of real estate over the past 30 years has been 6%. This includes down markets and up markets. Given this number, down years have to be offset by up years, and there have to have been more up years than down. This bodes well for housing prices going out a few years.

5) If you are an investor, there are deals out there to be made.

I hope this answered your question. If you would like more local opinion, contact a local real estate agent.

Because it's more than real estate. It's RAYL-Estate!

Brian Rayl, REALTOR®, e-PRO, SFR
Keller Williams - Dallas, TX
Web Reference: http://brianrayl.com
1 vote Thank Flag Link Sat Mar 19, 2011
You can contact your local real estate board to get the latest statistics for your area. Real estate trends seem to be very localized right now and differs greatly not only from state to state, but city to city. I am not familier with your area but you can find your local board online im sure.
0 votes Thank Flag Link Tue Mar 29, 2011
Nation wide I am reading more and more articles/experts who believe we are going to see a double dip this year. IMO, I prefer to call it a continuation of the ongoing down trend. To see a clear upward trend we need to see first a bottom formation with prices/sales stabilizing.

If you are asking this question for a specific area please provide the zipcode.

0 votes Thank Flag Link Tue Mar 29, 2011
This all depends on the area. How many foreclosures and short sales there are can make a big difference between a stable or upward trending market, and one that is continuing to decline. Keep in mind that suburban NY communities that are not the very high end, but nicer communities, are not to be compared to a market like Las Vegas, or even Newark for that matter.
In my area of Long Island, we have a section that was one of the first ones that started to be torn down house by house to put up McMansions, as we so affectionately call them. Prices had dropped to the $1.7 to $1.8 million range, but I see that one just closed for $2.2 million, and not in the most perfect of locations either.
0 votes Thank Flag Link Sat Mar 26, 2011
The Otteau stats are helpful for NJ overall. Markets are local of course, and the trends vary - with the commuting towns doing best. Well priced homes are moving quickly - much of that is the timing of Spring Market and the convergence of low prices and low rates - an unusual condition by historical standards. Put that in a pot with pent up demand and you've got the makings of a good Spring Market - IF you price properly. If not, all bets are off.

Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Sat Mar 26, 2011
If you are asking a general question about NJ overall, here's what Jeffrey Otteau (Fortune 500 appraiser) told a group of people last week: The NJ market has stabilized in most markets, beginning with the summer of 2010. There may be a slight dip in prices this year, 2-4%; however, he predicts that prices will begin rising starting next year for the next 9 years. By 2020, we should be back to 2005 prices (the height of the market for NJ.)
Remember that all real estate is local! Some towns have done better than others, some have done worse. If you have specific questions about a town in particular, feel free to email me through Trulia or my website below.
Web Reference: http://www.dianeglander.com
0 votes Thank Flag Link Tue Mar 22, 2011
There 8146 Bank Owned REO Foreclosures in Las Vegas. Prices are heading down again. Banks are holding back off the market 80% of the ones they own. Looks like a double dip is heading our way

David Cooper Las Vegas Real Estate Foreclosure Houses! Freee List Call +1-7024997037
0 votes Thank Flag Link Sat Mar 19, 2011
Professional code of ethics prevents any Realtor make a comment, we can't predict the future

Lynn911 Dallas Realtor & Consultant, Loan Officer, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Sat Mar 19, 2011
No .
0 votes Thank Flag Link Sat Mar 19, 2011
There is still a difference between what we as agents think and public perception.
Web Reference: http://www.321property.com
0 votes Thank Flag Link Sat Mar 19, 2011
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