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We are looking for House in East Brunswick which has good school system , location, and services etc. We are really confused about price trend, since not many newer single family homes (<20 year) come in market, on the other hand I see 298 homes in pre foreclosure and over 500 homes still for sale in market considering we are in Mid-Nov. Is there good and Bad side in East Brunswick ?
This is not just East Brunswick alone. Compare any town in Middlesex County that is the same size or larger and I am sure you will find worst almost always. This is just the nature of the economy today. These days when I am showing homes, out of 10 at least 5 homes are in the short sale or forclosure process. It is just the way things are these days.
This is not just East Brunswick alone. Compare any town in Middlesex County that is the same size or larger and I am sure you will find worst almost always. This is just the nature of the economy today. These days when I am showing homes, out of 10 at least 5 homes are in the short sale or forclosure process. It is just the way things are these days.
Wow, really...5 out of 10? I had no idea it was that high.
This is not just East Brunswick alone. Compare any town in Middlesex County that is the same size or larger and I am sure you will find worst almost always. This is just the nature of the economy today. These days when I am showing homes, out of 10 at least 5 homes are in the short sale or forclosure process. It is just the way things are these days.
Would you mind telling me the locations that you finding so many distressed properties. I am looking to buy (within a yr) and I would like to know the trend.
Also, how are things going now that we pulled forward a lot of buyers with 8k credit.
What's the average most people live in a home, 7 years?
Frankly, any home placed on the market which has been purchased in the last 5 years is likely to be at best a short sale. Very few who bought in that time frame made a large down payment, there was absolutely no incentive and frankly, it was a bad financial decision to have done so. If they didn't, they are going to be underwater given how far the market has fallen.
As for the $8k... that did nothing in NJ, at least not for family homes. Most married couples in NJ exceed the salary cut off for the first time home buyer credit, or they need to in order to buy a decent sized family home ($300+k). That's the problem with blanket taxation across the country... they treat Alabama dollars the same way they treat New Jersey dollars.
Wow, really...5 out of 10? I had no idea it was that high.
Yes it is true. Maybe it is not 5 out of 10 everywhere in this state, say Alpine or Princeton Boro for example but overall when I am showing homes I can almost ALWAYS guarantee at least three and it is always higher than this. To give you an example, I had an offer on an Ambiance unit in Crosspointe recently. Come to find out after a month of going back and forth, he finally tells us he is in default with the bank and that he needs to do a short sale. Okay no problem we will move onto another unit. What happens next, the other unit does the SAME thing! Talk about a BAD month! To this day since both Ambiance units are short sales, I have not found my client anything. I am actually going door to door on all 129 Ambiance units to try and find something, for a SECOND time!
Would you mind telling me the locations that you finding so many distressed properties. I am looking to buy (within a yr) and I would like to know the trend.
Also, how are things going now that we pulled forward a lot of buyers with 8k credit.
I would appreciate your real-life feedback.
Thanks
The $8,000 credit has really stimulated the home buying process due to the simple fact that it was the final push to get those people on the fence to purchase. The way I tell my clients to do it is to look at it this way, we have 5% interest rates on 30 year loans, home prices at some of the lowest levels ever, and the government giving you $8,000 to buy a home; which can even be used toward your closing costs in desired. When on Earth do you think you are going to get a better deal?
Yeah they tell me that maybe prices will drop some more and I say so! First off it is NOT going to happen! If you think that you are going to get another 20%+ drop, you are on drugs. Even if your home drops 5% or 10% you are going to make up the difference in the mortgage rate savings. For example, most of these first time buyers are sub $300K and MOST are sub $250K. So lets go highest at $300,000. With a 10% drop, you would loose $30K in value. If you purchase at 5% versus 6%, you are still coming out up $38,000 after the life of the loan! People just have to think realistically and then decide if they are purchasing or not. Right now I tell my clients, if you have the money to purchase, there is never going to be a better time.
As for the short sale properties, I can tell you they are everywhere but what you have to keep in mind is that just because it is a short sale does not mean it is necessarily a steal. Actually quite often it isn't. Most of these short sale properties are being sold at market value or just under so it is not something that one can think they will turn a quick buck on. Now forclosures on the other hand can have money made but you have to know what you are doing and the forclosure game is already dominated by the "usuals" who are there every week and do this for a living. Forclosures also require a large cash deposit upon your winning bid (20%+)which just about all normal buyers do not have. Let me put it this way, if you even have the cash to go to forclosures, chances are if you outbid a "usual" or "seasoned" veteran at a forclosure auction, then you most likely overpaid.
People should buy when they are ready to buy and it makes sense for them of course, but waiting for some other huge drop at this point in time could be foolish.
The $8,000 credit has really stimulated the home buying process due to the simple fact that it was the final push to get those people on the fence to purchase. The way I tell my clients to do it is to look at it this way, we have 5% interest rates on 30 year loans, home prices at some of the lowest levels ever, and the government giving you $8,000 to buy a home; which can even be used toward your closing costs in desired. When on Earth do you think you are going to get a better deal?
Yeah they tell me that maybe prices will drop some more and I say so! First off it is NOT going to happen! If you think that you are going to get another 20%+ drop, you are on drugs. Even if your home drops 5% or 10% you are going to make up the difference in the mortgage rate savings. For example, most of these first time buyers are sub $300K and MOST are sub $250K. So lets go highest at $300,000. With a 10% drop, you would loose $30K in value. If you purchase at 5% versus 6%, you are still coming out up $38,000 after the life of the loan! People just have to think realistically and then decide if they are purchasing or not. Right now I tell my clients, if you have the money to purchase, there is never going to be a better time.
As for the short sale properties, I can tell you they are everywhere but what you have to keep in mind is that just because it is a short sale does not mean it is necessarily a steal. Actually quite often it isn't. Most of these short sale properties are being sold at market value or just under so it is not something that one can think they will turn a quick buck on. Now forclosures on the other hand can have money made but you have to know what you are doing and the forclosure game is already dominated by the "usuals" who are there every week and do this for a living. Forclosures also require a large cash deposit upon your winning bid (20%+)which just about all normal buyers do not have. Let me put it this way, if you even have the cash to go to forclosures, chances are if you outbid a "usual" or "seasoned" veteran at a forclosure auction, then you most likely overpaid.
Hope I was able to answer all your questions.
That is good advice. I appreciate it. However, there are so many first timers who are around $400K range. So you math will need some adjustment but still it's on the ball part.
However, let's think from another angle. Say now rate is sub 5% and you can afford a house for 400K (with Govt cheese). Now fast forward 7/8 yrs. You want/need to sell it and the rate is sub 7% (and no Govt cheese). What will be your asking/sale price?
Your advice about "usuals" on foreclosure is on the point. I appreciate it. How about REO?
People should buy when they are ready to buy and it makes sense for them of course, but waiting for some other huge drop at this point in time could be foolish.
Thanks. I agree with you on that one.
Quote:
Originally Posted by Delphi
That is good advice. I appreciate it. However, there are so many first timers who are around $400K range. So you math will need some adjustment but still it's on the ball part.
However, let's think from another angle. Say now rate is sub 5% and you can afford a house for 400K (with Govt cheese). Now fast forward 7/8 yrs. You want/need to sell it and the rate is sub 7% (and no Govt cheese). What will be your asking/sale price?
Your advice about "usuals" on foreclosure is on the point. I appreciate it. How about REO?
Delphi:
I can see where you are coming from. To be honest with you I find that the $400K first time home buyers exist but they are few and far between. Most of them usually come from NYC and are usually renting. Other ther than that, I find many of the first time home buyers are in their mid 20s and have been living at home or just recently graduated college and want to move out with their significant others. Most of them these days do not even have large down payments or even large amounts of money saved because of the economy hence the use of FHA loans most of the time. I forsee that the age of first time home buyers in the coming years will be going up because many of the kids graduating college are staying at home longer because jobs are insecure and things are a lot harder now due to the economy.
As for the future value, I tell people there is no way to predict the market. Unfortunately rates are going to go up but remember the 90s, the market was active and rates were above 15%! How this happened? Well it was purely inflation. Gold was at a high, interest on a CD was upwards of 12%, and the stock market was doing okay. When things are going well, rates go up but in turn everything else goes up to make money as well. To be honest with you, yes interest rates are low but we pay now too. Savings acounts earn .015% annually, the stock market is fuzzy, and CDs pretty much do not even exist; but the wrench is gold being at an all time high. Who knows what will happen in the future, but the way I look at it, the money I am saving on my mortgage from 5% today to possibly 10% or more in 5 years, is worth every penny.
Last edited by DodgeViper01; 11-13-2009 at 01:30 PM..
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