(Edison, NJ) The turn of a new year
comes with both question and promise
regarding New Jersey real estate. To
prepare for the year ahead, the New
Jersey Association of REALTORS®
(NJAR®) has assembled a list
of ten facts regarding the current state
of real estate to offer some perspective
on what to expect in 2010.
"NJAR®'s quarterly
housing statistics over the past year
have generally indicated home sales
rising and prices stabilizing throughout
the state," said NJAR®
2010 President Judy Appleby. "These
increases in buyer activity should spur
further confidence in Garden State
housing. Plus, expiration of the federal
home buyer tax credit in April should
spark a dramatic spring buying season
that will hopefully set the tone for the
remainder of the year in many of New
Jersey's various markets."
1) First-time buyers are taking
action, and for good reason. In
2009, first-time buyers made up 52
percent of the New Jersey real estate
market, compared to 49 percent in 2008
and 36 percent in 2007. First-timers
were spurred by high affordability, low
rates, and the $8,000 federal tax
credit, which has been extended to April
30, 2010. An estimated 45,700 first-time
buyers took advantage of the credit last
year, and it is expected to be a strong
incentive for first-time buyers early
this year.
Source: 2009 Profile of NJ Buyers and
Sellers
2) Homes in the Garden State are a
good investment. The seven-year home
appreciation rate in New Jersey is 37.1
percent, more than five times the
national rate of 7.1 percent. Likely due
to the inherent advantages that the
Garden State has to offer (great
schools, unique neighborhoods, proximity
to New York and Philadelphia, and access
to the shore), New Jersey outperforms
the national average in home
appreciation.
Source: NJ Market Summary, June 2009
3) It's a great time to trade up.
The 2009 federal tax credit for
first-time buyers has been expanded to
include repeat buyers. That means that
existing homeowners can qualify for up
to $6,500 (or $3,200 for those filing
separately) when they buy a home - a
significant incentive to trade up to
that dream home.
4) Waiting for prices to drop
could cost you. A buyer obtaining a
30-year mortgage of $300,000 today at a
5 percent interest rate will pay
approximately $1,610 each month in
principal and interest. If that same
buyer waits until sale prices drop five
percent, he/she runs the risk of
interest rates going up. A 30-year
mortgage of $285,000 at a 6 percent
interest rate will cost the buyer $1,708
per month in principal and interest.
Those few percentage points can equate
to thousands of dollars over the course
of a mortgage.
5) Owning a home in New Jersey
builds long-term wealth. New Jersey
home buyers who purchased their homes
seven years ago accumulated an average
of $81,100 in home equity. Over the last
decade (1998-2008), the median prices of
homes in almost every metropolitan
statistical area that covers the state
have more than doubled.
6) It's a prime time to buy a
second home. Especially in a state
like New Jersey, with a great second
home market in shore towns and other
vacation destinations, now is a great
time to purchase a second home. The 2009
median price of a second home in New
Jersey was $246,300. Because of the
relatively high amount of inventory,
there are plenty of affordable options
that, when paired with low interest
rates, could be once-in-a-lifetime
opportunities. Who wouldn't want their
investment to double as a vacation
getaway and a foundation to build
lasting memories?
Source: 2009 Profile of New Jersey
Buyers and Sellers
7) There is still time to take
advantage of historically low interest
rates. Many experts agree that the
rates won't stay too low for long, but
there is still time in early 2010 to
take advantage of rates that have
dropped significantly. Consider that in
the third quarter of 2008 the average
Northeast rate was 6.27. For the third
quarter of 2009, the rate was 5.22.
Source: Federal Housing Finance Board
8) Good news for sellers: New
Jersey consumers are "buying
in" to real estate. The vast
majority of New Jersey buyers (86
percent) saw their purchase as a good
financial investment, with 57 percent
saying it is a better financial
investment than stocks. Also, when asked
about the primary reason for the timing
of their home purchase, 46 percent of
first-time buyers said it was just the
right time.
Source: 2009 Profile of NJ Buyers and
Sellers
9) Lower prices make homes more
affordable. The median price of a
single family New Jersey home in the 3rd
quarter of 2009 is 11 percent lower than
in the 3rd quarter of 2008. The housing
affordability index during the same time
period increased by 22 percent. NAR's
housing affordability index measures
whether or not a typical family could
qualify for a mortgage loan on a
median-priced, existing single-family
home. Increasing levels of affordability
mean a home purchase is within reach for
more New Jerseyans than the same time
the year before.
Source: New Jersey Home Sales Report,
3rd quarter 2009
10) There are 50,000 REALTORS®
in New Jersey that can provide you with
localized information. Whether you
are buying or selling, REALTORS®
provide expertise on market trends,
property conditions, and many other
aspects of a real estate transaction. 85
percent of home buyers used a real
estate agent or broker to purchase their
home, as compared to 84 percent in 2008
and 76 percent in 2007. 88 percent of
sellers were assisted by a real estate
agent in selling their home.
Source: 2009 Profile of New Jersey
Buyers and Sellers
The New Jersey Association of
REALTORS®, with
approximately 50,000 REALTOR®
and REALTOR-ASSOCIATE®
members, is one of the largest trade
organizations in the state. NJAR®'s
membership is comprised of real estate
professionals who subscribe to a strict
Code of Ethics and are members of the
national and local REALTOR®
organizations. As the leading advocate
for the real estate industry and private
property rights in New Jersey, NJAR®
is committed to protecting the dream of
homeownership. For more information,
please visit www.njar.com.
