New statistics show a market that’s stabilizing, but has obstacles ahead

New statistics about the housing market in New Jersey, Morris County and in our backyard demonstrate that real estate market is still on a roller-coaster ride, albeit one that we see  getting better. For those with homes for sale in Morris County, the news is good.

The Otteau Valuation Group is arguably the most trusted observer of the New Jersey real estate market. The latest reports issued by the firm cover November and include mixed news.

• First, the number of homes purchased during November was basically unchanged from a year ago. That’s actually pretty good, considering Superstorm Sandy brought things pretty much to a halt. In many places closings were put off until December or January on homes that weren’t badly damaged. Even with the slow-down, November marked the 13^th consecutive month that sales have increased. Year-to-date activity is up 22 percent.
• Also good: Unsold inventory declined 21 percent in November around New Jersey. That’s the lowest it’s been since 2005. It would take about 10.5 months to sell off all the current inventory, compared to 13.3 months a year ago. In Morris County, there’s about 7.6 months’ worth of inventory. That bodes well for those selling their homes.
• Not so good: The housing market faces a litany of potential obstacles, starting with recovery from  Superstorm Sandy. While the storm will create jobs, it could also tie up resources and make building materials more expensive. Homes impacted by the hurricane may become unsellable or decreased in value. The good news is that Sandy will have less of an impact in Northwest New Jersey than in other parts of the state.
• Also on the list of obstacles are things like the continuing “fiscal cliff” negotiations in Washington, D.C.; economic turmoil in Europe; tighter lending standards; and Middle East volatility – all things we have no control over around here.
• Locally, inventory is down in our area. That means more competition for each home on the market and better opportunity for those selling. It can mean more of a challenge if you’re buying. So far, decreased inventory hasn’t translated into rising prices, although they’re stabilizing.  Sales in November were down everywhere in our area except the Chesters, which reflects the statewide trend triggered by Sandy and the storm immediately after Sandy. Here are some local statistics:
• Chesters
  • Sales: 2011: 4; 2012: 9
  • Inventory: 2011: 89 homes; 2012: 70 homes
• Mount Olive
  • Sales: 2011: 21 homes; 2012: 12 homes
  • Inventory: 2011: 164 homes; 2012: 145  homes
• Long Valley and Washington Township
  • Sales: 2011: 12  homes; 2012: 10 homes
  • Inventory: 2011: 114 homes; 2012: 97 homes

It’s difficult to draw conclusions from figures and trends like this, but if you look at them in the larger context, it shows continued improvement in the market. Smart buyers and sellers will develop a strategy to get their best deal. To accomplish that, especially for sellers, we recommend consulting with your financial advisor, an attorney if you’re “underwater” with your mortgage and with a Realtor. Your Realtor can pull all the pieces together for you.

We’re experts in this area, and we’d be happy to help you with your real estate needs. Give us a call today at (908) 867-7109 or shoot me an email at kholmquist@comcast.net.

Our Wish For Your Success in 2013 Comes Tempered With Reality

We hope you had a great holiday season and that 2013 holds lots of success for you. When it comes to real estate, however, our wishes for your success are tempered with the reality of our local markets .

Kelly Holmquist discusses real estate at a recent workshop

You’ll be hearing from the experts about how well the market is doing, and indeed, it is doing better. Zillow, for instance, last week talked about their expectation that homes in the United States will gain more than $1.3 trillion in cumulative value in 2012, the first annual increase since 2006. Zillow looked at 177 metros and said that more than 75 percent of them saw “historic affordability and sustained investor interest” keeping “demand at a boil.” That’s great –if you happen to be in one of the neighborhoods they looked at where homes are increasing in value.

But others are sounding caution. Mark Zandi, chief economist at Moody’s Analytics and a well-known commentator on the national real estate picture, is among those urging caution. He warns that increases in inventory could steal growth away and that our economy, while growing at 2% to 2.5% over the next year, is basically stable. He also predicts a tough economic climate in the first half of 2013, especially if Congress can’t agree on getting nation’s finances in order.

I’m with Zandi. We are seeing some improvement in the market here in Northwest New Jersey. We’re seeing some stabilization in prices and we’re seeing some good inventory coming on.

But we still have a lot of homes – as many as a quarter in some area towns – being sold short and more heading toward foreclosure. Those buyers who already are underwater are too deep to be saved by any slight increases in prices and the potential for tax increases could push them further into debt. Our economy is doing OK, but we’re not generating that many new jobs in the area.

It’s a time to be optimistic but act cautiously.

So does this mean you should give up on buying or selling your home? Absolutely not. We’re able to sell well-staged homes that are appropriately priced and in areas with good schools and transportation for a reasonable price in a reasonable amount of time. The key is your definition of reasonable.
That’s where a Realtor can help you. Realtors are experts at buying and selling homes in a particular market. They can help you understand what “reasonable” is for the neighborhood in which you’re listing or buying a home. They can tell you how to get the most out of the home you’re listing and how to get the best deal for the home you want to buy. It’s a time where a Realtor’s experience and expertise is a key part of the process.

Your first step if you want to sell your home or buy a new one is to learn what you can about the area in which you’re selling or buying and who the Realtors are who service those areas. Pick someone good and listen to their advice.

Buying and selling a home, even when done correctly, is never easy. While it’s not as challenging as it was a year or two ago, it’s still requires good counsel, homework, flexibility and patience.

It’s our wish that your real estate goals are all met during 2013…and our job to make that happens. If The Holmquist Team can be of assistance, please call us at (908) 867-7109 or email me at kholmquist@comcast.net.