Bergen County NJ Real Estate Blog

Existing-home sales rose from the first quarter in 13 states, largely from buyers responding to discounted home prices, according to the latest quarterly survey by the National Association of Realtors®. Nearly one-quarter of metropolitan areas showed rising home prices in the second quarter from a year ago, with greatly mixed conditions continuing around the country. 

NAR President Richard Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said foreclosures are distorting the price data. “In many areas with large concentrations of foreclosure sales, homes are being purchased below replacement cost values,” Gaylord said. “Many buyers with long-term expectations are getting exceptional value in the current market. Once the inventory is drawn down, price pressure will return because the costs of construction are rising – today’s buyers are very well positioned to build wealth over time.” National Association of Realtors®

Let’s take a look at the real estate sales statistics for July 2008 to see how the market is looking locally:

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President Bush signed into recently The Housing and Economic Recovery Act. This is the most sweeping change to housing reform since the New Deal of 1934. It is designed to assist more Americans invest in home ownership and shore up the faltering housing and mortgage markets. Like any legislation, it comes with the good and the bad. I encourage you to write your Congressmen to see if we can get legislation to revoke some of the bad.  For example, effective October 1, 2008, FHA will increase the minimum required down payment from 3% to 3.5% for Bergen County home buyers. The legislation also calls for the elimination of seller down-payment assistance programs such as AmeriDream and Nehemiah by October 1, 2008.

As of July 14, 2008, upfront MIP premiums became risk-based on credit scores and the annual premium increased across the board. Instead of the original plan of making FHA loans more affordable for potential Bergen County home buyers; the new legislation is doing the exact opposite and makes it more expensive.

Details of the Housing and Economic Recovery Act:
Here are some key provisions of the Housing and Economic Recovery Act that most affect Bergen County home buyers:

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As a long-term investment, Bergen County homeownership is still one of the best investments for individual households.
 
Everywhere you look, headlines say the housing market is in a free-fall, foreclosures are rising at an alarming rate, and mortgage money is so tight that buyers can’t get a home loan at any price.

In today’s economy, is buying a home and investing in Bergen County real estate a good idea? As a long-term investment, homeownership is still one of the best investments you can make. And the operative word here is “long-term.”

Why is Bergen County real estate a good investment, you ask. The housing market, like all markets, is cyclical and will inevitably have ups and downs. But, homeownership has a track record that is virtually unmatched by any other investment of stocks, bonds or mutual funds.

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Most Bergen County home buyers don’t buy a house thinking they will lose it to foreclosure farther down the road. But poor buying decisions lead to difficulty when you are ready to turn around and sell. What do I mean by this…making the bad decision to buy a home on a major road even though the price was a steal? Or foregoing a home inspection because the sellers seemed like nice people and said there were no problems with the house.

Many Bergen County homes buyers study the market; ask questions, hire pros, yet even so, some are headed into foreclosure before the ink is dry on the deed.

Here are About.com’s 10 fool-proof ways you can, without meaning to, set yourself up to fail at home ownership:

1. Attending No Money Down Seminars
Start by calling that toll-free phone number to make a reservation. Then sit through a three-hour sales pitch for books, tapes, CDs and specially discounted services hawked by seminar gurus who most likely never bought or sold a piece of real estate in their lives but are getting rich off the backs of their naïve audience. Then go out and make dozens of lowball offers that get rejected until you find a seller who will carry all the financing at 18% interest with a 3-year balloon payment.

If you stop and think about it, if the tactics they teach at these seminars actually worked, every real estate agent in existence grabbing up the good deals and getting rich quick.

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