All posts by schatzi

Why 2011 Will Be a Huge Real Estate Year For New Jersey

I speak to dozens of people per week that are browsing homes for sale and try to answer questions on when and why to buy real estate. Most noticeably is the skepticism that everyone has because although they WANT to buy, they are unsure and scared if this is the right time to buy real estate. My first response is that the worst is over. The subprime mess is almost history and even though sellers/homeowners may be under water, the short sale process has become a more condusive approach since last year.That said, real estate is still moving at competitive prices, indicative from our charts that we update every month in our updates. I recommend that with the inventory out there, it is smart to be picky. You have every right to be so. Low mortgage rates is one reason that you should buy. Mortgage rates should stay low well into 2011. I refuse to speculate beyond a year, but after 2011, who knows what happens. What I do know is that the job reports are coming back positive and economic growth should continue. The housing market leans almost entirely on job growth.Right now, there is a lot of pent up demand. Buyers on the fence waiting are joined by millions of others. As long as job growth continues, real estate demand will continue to climb. Don’t forget about the baby boomer era we are in. The baby boomers children are now entering the age of home ownership. This will add on to the demand that is out there. This pent up demand will explode in 2011.One factor that most people are not aware of is the “shadow inventory” of homes that banks are either holding or the number of delinquent mortgages. In NJ at the moment, almost 10% of mortgages are in some type of default stages. Of that 10%, it is likely that not even half of those people lose their homes. Lenders today are more inclined to work with these homeowners to make their payments easier, whether that is a principal, payment, and/or interest rate reduction. It’s inevitable that this happens. It is far cheaper for a lender to do this than to foreclose on the home. Believe me, the LAST thing a lender wants to do today is foreclose. It is also cheaper to offer a short sale on a home. A short sale is an agreed upon sales price less than the amount of the current payoff amount.A perfect example I can make for an improving housing market is a recent experience. I have access to a couple of lenders and asset managers that I buy REO’s from. I either buy REO’s personally for investment or I offer them to my network of investors. I was getting homes at about 25% discounts from current appraised values. I barely get a call from those lenders and asset managers anymore. My most recent conversation with a local asset manager was why should they sell to me anymore at 25% discount when they can list their homes on the retail market and get 20% more for their homes within 90 days. Too bad for me, good for them. Ultimately, its a good sign that real estate is moving quicker today when priced competitively.I whole heartedly believe that 2011 is going to be a mini-boom for real estate, especially in areas like Hoboken, where we are directly impacted by the financial market in NYC that continues to improve every month. Hiring freezes are being lifted as more and more investors play the different markets. Although real estate prices may not skyrocket, prices will not free-fall and homeowners will be enticed by a “missing the boat” feeling, low rates, and more favorable financing options.So for Northern New Jersey real estate, my suggestion is this: If you find a home you LOVE, buy it today. Love it though. Don’t THINK you love it. If the housing market drops another 5% for instance, your longer term gains combined with today’s low interest rates should negate that loss in a short amount of time. Most importantly, you still have the home you love. If you don’t buy it, you will be in competition with many more people next year and your opportunity cost is not having the “home of your dreams”. You heard it hear first.

The Hidden Gem in Real Estate

Now is a great time to buy real estate on Long Island. When considering real estate, most people think of buying a home/condo or renting an apartment. However, one of the best values in real estate today is a co-op. Although much of Long Island real estate has managed to depreciate less than other areas in the country, LI stands an excellent chance to appreciate faster as the economy recovers.A co-op (or cooperative) is different from owning a condo and can be less expensive than renting. A co-op is a building owned by a corporation and instead of renting or buying a unit, a person would own shares in the building. The corporation holds the title to the building. We enjoy the many benefits of living on the Long Island (such as quality schools, beautiful beaches, great fishing and boating, convenient shopping, and all in a spacious and uncrowded environment) but can find it harder and harder to stay here. Additionally, Long Islanders are savvy business minded individuals who realize that no matter the state of the economy, owning can be far more beneficial than renting. Co-op living is a great alternative for more cost-effective living on Long Island.As an owner of a co-op, you own shares of your building. This provides the owner tremendous tax advantages. Owners will have the usual tax deduction associated with owning a mortgage. In addition, co-op owners can deduct, in some cases, up to 70% of the total annual maintenance fee off their own income tax and thereby reducing their income tax liability. Maintenance fees usually carry the building’s mortgage, if any, the building’s real estate taxes, and common charges. Cooperative living offers a great lifestyle free of yard work, shoveling snow, costly home repairs, and general maintenance. Co-ops can be a great alternative for those considering downsizing or those who are interested in convenient living.Most first-time home buyers programs and star programs can be used for ownership of a co-op. Co-ops start around the $150,000.00. Most are updated and modern. You will probably be able to find one suitable for you and your needs.Geri Christian

Common Questions Asked by Real Estate Buyers

There are a lot of questions out there about buying Real Estate; “Am I going to pay too much?” “What’s wrong with the house?” “Will lenders allow a short sale?” and “Do you have paperwork for the mechanical systems?” This should be answered by Real Estate Agents. But is it worth going through all that trouble with an agent? Constantly looking at homes and never finding what you’re looking for. Some agents will make you offers just for their own good. But here are some of the most asked questions about Real Estate buyers that I’ll answer for you today.Let’s start of with the question “Am I going to pay too much?” The first thing you’re going to want to ask your agent is comparable sales. This should defiantly be your first question. When buying a home you’re going to want the price that fits you best. Your agent should give you plenty of choices like prices of similar, nearby homes that have been sold recently, and also high and low ranges for properties. Knowing this is the first step of buying new home.Next thing you’re going to want to know is what’s wrong with the house. Most sellers will tell you that the house is as ‘brand new.’ Some could be telling the truth, while others are just trying to get top dollar. The best way to avoid this problem is for inspection and disclosures of the house. Your agent will most likely recommend this as well. In fact the state of Texas, US, has mandate disclosure forms which make sellers show problems to the house if any.A question you might never hear any Real Estate Buyer ask is “Will lenders allow a short sale?” A short sale is when the bank sells you a high mortgage home being sold for less. But this can only happen with the sellers consent. If the seller would like to sell the house for lower to the buyer they would need the banks permission for the deal to be done. If you ever see a “short sale” home ask the seller whether the lender has agreed to sell the house for a lower price.This last question is almost a must; Asking the seller if he has paperwork for the mechanical systems. This could make a house deal breaker for most. If the seller has recently replaced appliances and it comes with the house you won’t have the warranty for that. This means money coming out of your pocket if they malfunction. Sellers will do this to make extra money of the buyer.Make sure you get yourself a Real Estate Agent before looking for homes. They have all the questions answered for you. It takes time to find your ideal house so don’t rush it. Also contact your bank or any lenders if you’re deciding to buy a high mortgage house or a ‘Short Sale.’