According to Fannie Mae’s most recent monthly survey, the upward trend in housing market sentiment has continued. Respondents in its January survey believe home prices will rise by 1 percent over the next year, an improvement over the 0.8 percent gain predicted in December. Additionally, 44 percent of those responding to Fannie Mae’s survey expect their personal financial situation to improve over the next year, up from 40 percent who felt that way the month prior.
Other recent reports support an improving housing industry and economic outlook:
• The National Association of Realtors said total existing-home sales rose 5.9 percent in the fourth quarter of 2011, and were 9.2 percent above the fourth quarter of 2010.
• Home Builder optimism was up in February for the fifth straight month, according to the NAHB/Wells Fargo Housing Market Index.
• The Mortgage Bankers Association said that mortgage delinquencies dropped to the lowest level in three years during the fourth quarter.
• New applications for unemployment benefits dropped to the lowest level since March 2008, a sign that the labor market is on the mend.
• Earlier this month, Weichert set a new record for the number of customer inquiries received via its Weichert.com website in one day.
If any of the above indicators represented an egg timer, it would tell us that the Housing Market is ready to come out of the oven. Angie Perez, an Edison NJ Broker-Salesperson for Weichert Realtors said, “There a good sense of busyness in the market today. Investors and cash buyers alike are taking advantage of low home prices and increased demand for decent rental properties.”
One variable that people often over look is the rental market. Despite a soft, but slow and steady residential housing market, the number of for rent income properties have gone up two-fold. Perez said, “Just this past week, I rented a home in Scotch Plains NJ for $1850. Some for rent property owners were asking up to $2500 and renting their homes in 45 days or less to tenants with decent annual incomes.” This type of market activity supplements or compensate home sellers who are unable to sell. Likewise, some cash buyers see the value again in real estate, especially given the prospect of risky returns on Wall Street and other investments.
Is it time to sell? That is a question to be answered by your local Realtor. There are a number of micro markets in NJ that appear to be a seller’s market. Deciding on when is the right time to sell is a personal decision, one that you should consider with your trusted advisers or Realtor.
Is it time to buy? “Absolutely Yes,” say Milan Patel, a residential real estate attorney in Edison NJ who has been representing buyers and sellers in real estate transactions since the late 80s, early 90s. Patel’s egg timer is the number of real estate contracts for review that comes through his office on a weekly basis. Patel said, “Last week, we received 9 real estate contracts for review. I know not all of them will close, but the number of potential deals in just one week suggests to me that the buyers have read the writing on the wall and are ready to get back in the market.” Patel recalls the words of wisdom delivered by Barbara Corcoran, a self made millionaire and notable real estate columnist. Corcoran lamented, “In the 35 years that I have been in the real estate sales business, there has never been a perfect storm like this: low home prices and low interests rates at the same time. If there was ever a time to buy, now would be it.”
Of course this is the song and dance of most real estate professionals in the real estate industry (now is the time to buy) and it is often hard to tell when the real estate pros are telling you the truth or just pitching you all the same stuff. Let the real estate market speak for itself. Ask more questions about real estate values today versus what it might be months from now. If homeowners see a 1% increase in home prices, will 1% deter you from buying especially if you are using mortgage dollars? Absolutely not, but at the same time if interest rates start to rise, which we could see some activity in rates in the 3rd and 4th quarter of 2012, buyers might believe that the bottom of the market as arrived.