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Flood Insurance Just Got More Affordable for NJ Residents
President Obama just signed a flood insurance relief bill that will make flood insurance more affordable for American homeowners, especially those living along the Gulf and Atlantic Coasts. About two years ago, coastal homeowners saw their flood insurance premiums spike so high, it threatened their financial stability. With such high increases in flood insurance, it has also made coastal properties unattainable for new homeowners who don’t want to take on the financial burden. This, too, has slowed the NJ market.
The original intention of the Biggert-Waters Act was to make the National Flood Insurance Program more financially stable, but really, it placed strain on homeowners living in flood-prone areas. Some of these homeowners didn’t buy in original flood plains, but their homes were deemed at risk and not built to code, so they were impacted by high premiums as well.
When homeowners began voicing their concerns over significantly high premiums after Hurricane Sandy, Congress took up the issue. It’s understandable that making the National Flood Insurance Program more stable would be a major advantage and take pressure off tax dollars, but forcing people from their homes due to such high costs was not a fair alternative.
The new relief bill looks at several different aspects of flood insurance. First, flood insurance premiums are capped under the new bill, at an average of 15 percent. The maximum is 18 percent for primary homeowners, while secondary homeowners may still see their premiums rise by 25 percent. Second, people buying new properties that are on flood plains can have below-market rates passed down to them. Flood insurance may not be cheap, but at least it’s more affordable.
The flood insurance relief bill helps the NJ market by making coastal properties more practical. In recent years, these properties have slowed because people are afraid to foot a large insurance bill each month. The new bill should offer more financial stability for those living along the East Coast as well as people who are interested in purchasing a home off the coast.
In New Jersey, roughly 233,000 homeowners are now covered by federally subsidized flood insurance, with the majority of the properties coming from Ocean, Atlantic and Cape May counties.
Why 2014 Will be a Strong Year for the Housing Market
We’re already four months into 2014, and the height of the selling season will soon be upon us. The winter was unusually cold, but we should be seeing more homes listed in the coming weeks. Spring has traditionally been considered that perfect time to list a home. This year in particular, we have a lot to look forward to. Housing activity has been increasing over the past several years, so we can expect the same trend to continue this year.
Increased Housing Activity
This year may be the first year that we see the most housing activity since 2006/2007. There are a few reasons for this. The first is simple. Since the housing bubble, housing activity has slowly picked up, with each year a little better than the last. As long as this trend continues, we can expect to see even better sales in 2014. Additionally, there should be more jobs available, a bigger inventory of homes and competitive housing and interest rates to drive up housing activity.
More Young People Looking to Buy
A second reason why 2014 may be the strongest year yet is because of a basic yet important piece to the puzzle: demographics. On average, there are 1.2 million households each year that demand a housing unit, whether that housing unit be rented or bought. Due to the recession, there are more young people living at home with their parents for financial security. Many of these young people want the freedom of living independently, though, and will soon be ready to purchase a home. When demand from young people starts to kick in, we can expect to see real progress in the housing market.
Mortgage Availability is Improving
Lastly, mortgage availability may improve in 2014. While it’s not as easy to get a mortgage as it was during the housing boom, it is becoming easier than in years directly following the boom. For those deserving of a mortgage, there are a number of options available through Fannie Mae, Freddie Mac, FHA and VA loans. Also, with rising interest rates, it’s to be expected that fewer people will refinance their mortgages, so lenders will be looking to boost activity by giving out new loans.
Source: HousingWire.com
Spring Cleaning Tips Before Listing Your Home
Before you set that ‘for sale’ sign in front of your yard, there are certain things you need to do to get your home ready to sell. In this post, we want to discuss spring cleaning tips that will get your home looking its best, and hopefully, selling quickly. Now is a great time to go through your clutter and clean the home because you’ll need to do this when you pack anyway. So, let’s get a head start and get cleaning!
De-Clutter the Home
Going through your stuff isn’t always easy, because it means having to make decisions as to what to keep and what to get rid of. Some people do well in getting rid of the things they no longer want or use, and others dwell over it. To help, give yourself limitations so that you can still keep things but within a reasonable limit. For instance, if you have a collection of baseball cards, keep only those that will fit within one plastic container.
You may be able to sell some stuff in a garage sale or online and make a few extra bucks. Or, donate the things you don’t want to the many charities available, many of which will come to your home to pick everything up!
De-Personalize the Home
Next, you’ll need to take the ‘you’ out of your home. Potential buyers need to be able to walk through your home and envision their own life there, so keep your home tasteful but simple and minimal. Picture frames, collections, knick knacks and so on are the things to pack and put in storage. For tasteful decorating, use general items like candles, bowls of potpourri and fresh plants and flowers.
Clean Hard-to-Reach Areas
How long has it been since you washed the windows? Dusted the blinds? Scrubbed the shower? Vacuumed the baseboards and vents? These areas are often looked over, but they need to be cleaned before showing your home. You don’t want your dust and dirt overshadowing your space. If you need help, enlist a cleaning service and then keep up on the work from there.
Also, don’t forget the very basic tasks of vacuuming the floors each day, wiping down counters, keeping dishes out of the sink and dusting surfaces.
New Jersey Housing Market Continues to Strengthen
According to the New Jersey Association of Realtors, the NJ market continues to strengthen thanks to a lower inventory of available homes, higher median prices and faster selling times. How do these numbers compare to last year?
According to NJAR, the number of homes for sale in all markets is down 15.5 percent from September 2012. Closed sales in all markets have risen 21.8 percent, though. Single-family homes have seen a median sale price of 7 percent more compared to September 2012, and single-family homes are spending less time on the market.
To add more good news to the picture, positive trends are being seen in the townhome and condo communities as well. While NJ isn’t back to pre-recession prices, at least the housing market is moving in the right direction.
Why Inventory is Low – But Maybe Not for Long
Part of the reason why inventory is low is because would-be sellers are holding onto their properties because they are not willing to sell their home at a discount. This deters many would-be sellers, so they either remain in their homes or rent them out to continue paying down their mortgage.
Over time, we can expect to see some of these sellers slowly listing their homes when they can finally make the numbers work for them, but in the meantime, inventory will remain relatively low – at least for these types of homes.
Foreclosed homes are a different story. With the high number of foreclosures, there are still many that need to make it onto the market. Once they are listed, we can expect to see them clear out very quickly, boosting sales and driving up the market, hopefully allowing today’s would-be sellers to finally list their homes without taking as much of a hit. This has been the trend for much of the country, and it has helped many states rebound to better sales.
We can only hope that the housing market bubble will be a thing of the past, and housing prices will continue to strengthen over time. We’re making positive steps in the right direction, making now – potentially – a great time to sell, buy or both.
What is a Reverse Mortgage?
A reverse mortgage is a type of loan that is available to homeowners 62 years old and older. The loan allows the homeowners to convert part of the equity they have in their home into cash. This type of loan program is designed to give Americans more financial security, especially during a time when a steady income may not be as easy to attain. Many people use the loan to supplement Social Security payments, as well as to pay medical expenses, make improvements to the home and pay for additional living expenses.
Pros and Cons to a Reverse Mortgage
When you think about the concept of the program, it makes complete sense. After years or decades of paying down your mortgage and building up equity, the cash can be paid back to you. And, unlike traditional home equity loans, borrowers do not have to repay the loan. There are no monthly principal or interest payments. You are required to pay real estate taxes, utilities and hazard and flood insurance premiums.
There are still some things to think about, of course, as a reverse mortgage is not for everyone. First are the costs that are involved. Reverse mortgage fees are very high and include the interest rate, loan origination fee, mortgage insurance fee, appraisal fee, title insurance fees and any other additional closing costs. These fees are not paid out of pocket, but instead rolled into the loan.
Additionally, if you need to move out of your home permanently, you would be required to pay the loan back. This may not sound like a main consideration now, but it will be if you need a long-term care facility.
Amount of Payments and How to Receive Them
Is a reverse mortgage right for you? It could be. But it’s important to weigh all of your options, as there are both pros and cons to think about. The amount of money you can get from your home is based on:
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Age of the youngest borrower
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Current interest rate
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Lesser of appraised value
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Initial Mortgage Insurance Premium
Payment plans can be made in various forms, including:
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Tenure
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Term
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Line of Credit
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Modified Tenure
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Modified Term
- Single Disbursement Lump Sum
Why Are New Jersey’s Property Taxes So High?
New Jersey is a great place to work and live. Its cities are often ranked some of the best places to live in the US, and the state is home to great restaurants and sports teams, not to mention there are plenty of job opportunities being centrally located to several large cities. But, there’s one thing that often comes up in conversation when talking about New Jersey: property taxes are high. Some of the highest in the country, in fact.
A study from the Tax Foundation found that in 2009, New Jersey residents paid median taxes of $6,579 in 2009, giving them the highest property taxes in the country. It’s no wonder why residents get so angry about having to pay high taxes, but the truth is that New Jersey is highly reliant on property taxes to fund schools and government. So, looking at property tax numbers alone isn’t enough to tell the full story. Other areas may be paying the same dollar amount of taxes, just in a different form.
Here are the factors that determine New Jersey taxes, according to NJLM:
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Your home’s market value
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Cost of municipal and county programs and services
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Cost of local public schools
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Availability of revenue to cover the above costs
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Extent of tax exempt properties in your municipality
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Total value of taxable properties in your municipality
So, if you were to make structural renovations or additions to your property, your tax bill gets higher. If it costs more to deliver local government services and programs to your area, your tax bill gets higher. If local school districts cannot count on other revenues and their costs rise, your tax bill gets higher. When looking at the numbers, it’s important to remember all of the programs and services that NJ taxes support.
Also, NJ municipalities are highly autonomous. This offers a range of benefits to residents, including more control over local school systems and government. But, this also comes with a cost, and that cost is reflected in NJ property taxes. The more emphasis you place on having local independence, the more the municipality is to going to have to pick up these costs, when in other states, they are funded at a state level. It’s a Catch 22, really.
Bottom line: No tax is popular. There will always be some aspect of taxes that people don’t like. At the end of the day, there are many government-level programs and services that our nation’s cities need to function.
Tips for the First Time Homebuyer
First-time homebuyers – those who have no present home ownership – are some of the luckiest in the market today. In order to stimulate a sluggish housing market, there have been a handful of incentives and loan opportunities that encourage those without a home to buy, in turn stimulating a down economy. Since the housing bubble, the market has been most generous to new buyers thanks to low housing prices and historically low interest rates. The drawbacks have been that lenders have tightened their lending guidelines, and there is a low inventory of homes available.
Why Buy?
Homeownership offers many benefits:
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Increased control (no more cancelled leases)
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A residence that better meets your needs
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Home equity
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Tax benefits
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Builds credit
Below are a few tips for the first-time homebuyer.
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Check the selling prices of homes in your area. For the most accurate data, you’ll need to look at the MLS, so contact a real estate agent who can give you access to this up-to-date, real-time system.
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Use a mortgage calculator to determine how much you can afford each month. Overestimate your expenses so that you leave ample room to afford your mortgage and the hidden costs, such as HOA fees, property taxes and utility bills.
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Find out what property taxes will be. There are big differences from one county to the next. Unfortunately, no matter where you live in NJ, you can expect to pay high taxes.
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Determine how much closing costs will be. First-time homebuyers sometimes have more incentives than other buyers, so you may be able to get your closing costs paid for. Still, it’s not as common for these costs to be rolled into your loan as in years past, so know what you will have to bring to the table.
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Work with a reputable realtor. A realtor is your best guide during the home buying process and will match you with the best properties, while also keeping you up-to-date on fluctuating interest rates and taxes.
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Start the pre-approval process. A lender will look at your finances, qualify you based on your income and tell you how much home you can afford. Fannie Mae recommends that you spend no more than 28 percent of your income on housing, so take this into consideration. You want to afford your home, not make it a financial strain.
Cedarcrest Realty, INC. Congratulations to Our 2013 Top Performers
7 Secrets to Selling a Home
Selling your home? Make the experience smooth sailing by following these seven tips.
1. Price it Right
Find out what your home is worth from a realtor. Although online tools can give you a rough estimate, a realtor will have access to all of the recently sold homes in your area. Then, shave 15 percent off the price and watch the buyers trickle in. This leads to multiple bids and more competition, putting the power in the seller’s hands.
2. Hire a Professional
You need a real estate agent who is dedicated to selling your home. They will be responsible for monitoring the MLS and ensuring that your home is competitive, not just a stale home on the market. If you’re not happy with who you have, don’t be afraid to try someone new.
3. Show Off Storage Space
Storage is important for today’s buyers, so don’t cram your closets and cabinets with random stuff. It’s best to pay the small price to rent out a storage room until your house is sold. Prospective buyers snoop, and they want to make sure there is plenty of storage capacity.
4. Let in the Light
A dark home looks small and drab, so lighten up your home by taking down drapes, cleaning windows and switching out lampshades. A bright and airy home sells much faster, plus looks bigger and more adaptable.
5. Keep Pets Out of Sight
Surely, your pets are cute. But, when selling a home, less is more. Not only should you keep your pets locked away – or even better, at a pal’s home – but also you should keep pet-friendly items like dog bowls and litter boxes in hiding. You want your home to look and smell clean.
6. Keep a Neutral Setting
You want prospective buyers to picture themselves living in your home, which is hard to do when there are mementos from your family all over the place. Keep your home neutral by taking out the personal side. Remove photos of family, collectibles, keepsakes and so on. Also, keep your home simple and plain. Experts recommend removing ⅓ of your stuff.
7. Be Ready to Show Your Home
A missed showing could be a missed sale. Keep your home show-ready: picked up, bathrooms clean, no dishes in the sink and no dust in the corners. You’ll need to be on your toes more, but a quick sell is worth the short inconvenience.
Positive Signs of Growth for the NJ Housing Market
The New Jersey Association of Realtors reports that the NJ housing market is growing stronger each quarter, with single-family homes selling 13 days faster and for $11,000 more than the year before. These numbers come from NJAR, as they are launching a new project that will provide detailed housing data each month based on state, county and local niches. This information is designed to educate buyers and sellers who want to learn more about the current housing market.
NJAR pulls the information from the MLS in New Jersey to determine where homes are selling, how quick they are selling and for what price they are selling. New Jersey has a complicated housing market, so it’s helpful to know which areas are seeing the most growth. For instance, South Jersey markets Cape May County, Atlantic County and Cumberland County have had sluggish sales compared to countries like Essex and Caldwell. Still, even these slower markets are seeing better days. On the whole, the average NJ home sits on the market for 82 days.
Additionally, more information will hopefully prompt buyers who are on the fence about buying. Interest rates and home prices are climbing, and with higher costs come fewer affordable homes. As interest rates continue to go up, it will impact people’s decisions on whether or not to buy a home. Prospective buyers can also see which counties have a higher demand. There are differences from one county to the next, as the demand is stronger in Bergen than in Passaic, for example.
Even though the market is still slow in New Jersey, we’re seeing signs of positive growth, and many real estate experts predict that this is just the beginning. The number of homes sold in NJ has rebounded its fastest since 2007. We can attribute this to low home prices, low mortgage rates and a growing confidence in the housing market. NJ has also had steady job growth, which will also help stabilize the housing industry.
