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Sellers in the West, Buyers in the East
Zillow, an online real estate site, recently released a study that listed the markets for sellers and buyers in the United States. The study showed that there is an east/west divide. Basically, if you’re on the West Coast, it’s a seller’s market. If you’re on the East Coast (or Midwest), it’s a buyer’s market. Obviously, if you compare New Jersey to California, there’s a lot of difference, and not just in terms of miles. Things are different out there. But why is one coast showing one market, and the other coast an entirely different market?
For starters, there are relatively strong job markets on the West Coast, which is helping to create more demand. Since there is a limited supply, this is causing a rapid appreciation for homes and giving sellers the edge. And, housing prices and interest rates are still favorable, so some buyers want to buy NOW. They’re willing to pay a bit more for a home because they know it’s still a great deal, and the sellers get to take more of a profit than they would have a few years ago.
Here in New Jersey and our surrounding areas, however, the housing market is appreciating more slowly. Homes are staying on the market for a bit longer, and this gives buyers the edge. If a seller wants to take advantage of the market and sell off their existing home, they’ll be much more willing to take a little less and move on rather than holding onto the property. This isn’t the case in every township, but it is the picture for things at large.
So, what can you be looking at this fall? It depends on who you are. If you’re the buyer, then you can expect to have the upper hand, and you may be able to land your NJ dream home by asking the seller to come down in price. If you’re the seller, on the other hand, expect to have your home on the market a little longer and perhaps have to lower your asking price. Or, you could always wait for that perfect buyer to come along, which isn’t asking too much in this market. New Jersey does, after all, have unique, one-of-a-kind homes.
Top 3 Turn Offs for Prospective Buyers
When listing your home, you probably have many questions. Will the buyers like my home? Does it have an attractive layout? Is it decorated nicely? Is it priced right?
The truth is that most buyers form an opinion about a home within minutes, whether they see it online or in person. You want to make a good first impression so that you can lock in prospective buyers and show them what your home really has to offer. But, it’s important to know what types of things buyers don’t like. Let’s take a look at the top three turn offs for prospective buyers so that you can avoid them in your own home.
1. Dirt and Grime
Before listing your home, you need to do more than just vacuum and dust. The house needs to be in the best possible condition. Period. Prospective buyers expect to walk into a home that is bright, airy and clean, so don’t assume that people will look past everyday grime. Some things to consider: shampooing the carpets, cleaning grout on tile, vacuuming the vents, cleaning the baseboards, scrubbing around showers and tubs and washing the windows. Of course, keep all surfaces, especially countertops and sinks, spotless too.
2. Odors from Pets, Food or Cigarette Smoke
While the house is on the market, choose the foods you cook wisely. Fried foods, for instance, will create film on the cabinets and cause the home to smell. Pet odors easily go unnoticed by homeowners, but many pets leave their scent around the home. Not only should pet odors be eliminated, but so should their toys and accessories (litter pans, bowls, etc.). Have a plan so that Fido isn’t around during the showing. Smokers should also keep all things hidden (ashtrays, lighters), and smoke outside when the house is on the market.
3. Outdated Fixtures and Appliances
If your light fixtures and appliances are outdated, you’ll need to do an update. Buyers want to see modern homes that they can move right into with little work or updating on their part. Some easy, affordable fixes: changing cabinet hardware, installing new light fixtures and painting the cabinets. Naturally, having new appliances and cabinetry is best, so understand that if you don’t have it, you won’t get the highest possible price for your home.
What are the Benefits to Buying a Short Sale?
Even though the housing market is strengthening, current buyers will find that inventory is still rather low, and there is a good number of short sale properties to choose from. What is a short sale exactly, and are there benefits to you, the buyer?
During a short sale, the homeowners agree to sell the house for less than what they owe on the loan, which means the lender must also agree. If you are in the market for a new home, short sales are a good option to consider. They do take time, however, since the banks must approve the offer. This makes it difficult to pinpoint an exact closing date. Short sales are not recommended for people who need to move quickly or before a certain date, but if you have some flexibility, you can enjoy the following benefits with a short sale.
Low Housing Price
Short sales are listed lower than the normal selling price. Not only can you scoop up a nice property for less, but also you can negotiate with the seller and the banks, something that is hard to do with a foreclosed property. In a traditional sale, the homeowners would be responsible for fixing things up, but with a short sale, this will be your responsibility. It’s important to understand that you may have to purchase a fixer upper, but again, this will be reflected in a lowered cost.
Cooperation from Homeowners
With a short sale, the sellers are eager to sell their home. The sooner the house sells, the sooner they can move on and start repairing their credit. This is a much different scenario than if you were to buy a foreclosure where the people need to be evicted and may cause damage to the home out of anger. This cooperation between the sellers and the buyers is helpful in making the sale work to everyone’s advantage.
Favorable Financing Terms
Short sales are generally in the best interest of the bank. Instead of having to pay all the costs associated with a foreclosure – eviction, administrative costs and repairs to the home – a short sale allows the lender to take a loss on the loan, but then start getting some of that money back by approving the short sale and moving the new buyer into the home. Since sellers are behind on their mortgage payment by a few months, it makes sense to get someone in there who can pay. This often gives buyers the advantage by getting buyer-friendly terms such as low interest rates.
If you’re considering purchasing a short sale, call Cedarcrest Realty today!
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.
What is the Multiple Listing Service (MLS)?
If you’ve been working with a realtor or will be in the near future, you will definitely hear a lot about the MLS system. MLS stands for Multiple Listing Service, and it refers to one large database with many of the listings that are currently available on the market. When a property is sold, it is then taken off the database. The MLS is a fast and convenient way to access the homes that are available for sale at any given moment. After all, being a good realtor means that you need to have quick knowledge of what properties are out there.
Let’s take a look at the advantages to using the MLS for your home buying or selling experience.
Benefits to Buyers
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Convenient. The majority of homes for sale in your area are placed on the database, so you don’t have to bounce back and forth to various websites.
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Easy to use. A few simple clicks of a mouse give you access to all the properties for sale in your area.
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Up-to-date and relevant. The MLS is continuously updated, so what you see reflects the current market, unlike other sites that are out of date.
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Free service. The MLS does not cost a penny for buyers to use.
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Sorting features. Instead of sorting through hundreds of homes, you can use the handy sorting features to find homes based on the square footage, number of bedrooms/bathrooms, zip code and so on.
Benefits to Sellers
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More exposure. You want to sell your home fast, so putting it in front of the most buyers makes this possible. The MLS gets you the largest number of buyers in a short amount of time.
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Help from a professional. To get your listing on the MLS, you’ll need a real estate agent or broker to list the property. Not only do you get your home on the MLS, but also you get professional assistance from a realtor who can help get your home sold quickly and for the most money possible.
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Increased competition. The more buyers that see your home, the more competition it will create. Competition is good for sellers since it puts more power in your hands as you price your home and sell it quickly.
More Buyers Keep the New Jersey Housing Market Strong
If you have managed to survived the housing market crash thus far, you don’t have much more to go. The North Jersey market has been very lively this past spring season, giving homeowners a bit more hope that they will be able to successfully climb out of the worst housing bust since World War II. What has been helping the market to grow? Low interest rates, low home prices and added job security.
Bergen County remains one of New Jersey’s strongest markets, but all of the state’s counties have seen growth. What has changed compared to last year is that it’s not just a buyer’s market anymore; it’s both a buyer’s and a seller’s market. Low interest rates and low housing prices make now a great time for new homebuyers. After all, when will you see interest rates at 4 percent again?
At the same time, there is a low inventory and plenty of buyers, which means that there is a seller’s market going on as well. Sellers don’t have to accept low-ball offers or take the first person who bids on the house. In fact, some sellers were surprised to see that their house sold for more than what they put it on the market for just because people out-bid each other. It’s a great feeling, and the market has become an even playing field for both buyers and sellers, good news for the future.
What we hope is that these homebuyers keep the market going strong. A lot of buyers have a “buy now, pay less” mentality, and they want to jump in now before it’s too late. They see prices and interest rates going up, and they know they don’t have much time. Buyers are tired of waiting; they know that the best prices and rates are behind us. This is great for sellers, who are also tired of waiting. Is this the start of a healthy market? We sure hope so!
