Should New Jersey Home Buyers Wait?

If you are looking to buy a Millburn-Short Hills home in 2013, you may be wondering if you should buy now while home prices and mortgage rates are reasonable - or wait, and see what may be available a few months down the road.

Here are my thoughts on our New Jersey real estate conditions, and how they impact first-time home buyers.

We are seeing a lot of variety! Overall, home prices are up from a year ago, and the list-to-sales ratios show that prices are firming. Yet the amount of time a home spends on the market can be a short as 10 days or as long as several months. You can get an idea of how local markets like Livingston, Chatham, and Summit are faring by looking at my Market Statistics page. Free! Take a peek.

Meanwhile, New Jersey has some shadow inventory to work through. Some of these distressed homes may experience foreclosure. Others may conclude a short sale before reaching foreclosure, which is less damaging to surrounding home values. Inman News reports that shadow inventory nationwide is down 28% from its peak, but New Jersey, Florida, New York, California and Illinois have the lion's share of this market.

Anywhere there are foreclosures, home prices dip; but not all delinquent mortgages translate into foreclosure. Short sales are accounting for a greater share of our distressed market. Since short sales are based on fair market value, and the homes are in better condition than foreclosures, they do not harm area home values. It would be inaccurate to assume that having a distressed inventory means automatic price retreats. However, home price appreciation will likely be gradual this year, as we have seen over the past 12 months.

The gamble that first-time home buyers make in waiting, is twofold: home prices may rise, and mortgage interest rates may rise. Gradual increases in both have been predicted by economists. A one-two punch of increases will impact mortgage qualification for those who are just within bounds, and make home buying more expensive for all concerned.

Bottom line: you can't predict the market, but you can base your decisions on the facts you have today. You can also use my professional guidance to help you find the best opportunities in New Jersey real estate! I will be happy to share the newest home listings and latest price trends for the neighborhoods you'd like to call home. Contact me today, and let my experience work for you!

Elaine Pruzon
Coldwell Banker Residential Brokerage
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Home Equity Sees Recovery in Millburn-Short Hills Area

Fewer homes are underwater in value, according to the latest report from CoreLogic. Improvements in home values are being seen nationwide as well as in Millburn-Short Hills!

I won't keep you in suspense! CoreLogic says that 88.1 percent of homes in the New York-White Plains-Wayne N.Y-N.J. statistical area have positive equity!

While we are a few miles away from the core metropolitan area, our home values have seen a similar, progressive rise in recent months. Please keep in mind that this is a broad statistic and home values will vary by neighborhood.

CoreLogic's report also shows that homes at the higher price ranges are gaining equity at a quicker pace. Here are some more findings:

86 percent of homes valued at $200,000 or more have equity, compared with 72 percent of homes valued at less than $200,000.

  

Homes with a combination of outstanding primary mortgages and home equity loans accounted for $315 billion of negative equity nationwide. 

 

6.5 million negative equity borrowers hold first liens without home equity loans. The average mortgage balance for this group of borrowers is $213,000. The average underwater amount is $45,000. 

3.9 million negative equity borrowers hold both first and second liens. The average mortgage balance for this group of borrowers is $296,000.The average underwater amount is $80,000! 

In other words, the total amount of mortgage debt outstanding plays a role in how quickly homes recover equity. And because second mortgages were used as a down payment method during the boom, some homeowners were heavily leveraged from the beginning. These homeowners have deeper hole to escape, but fortunately the market trends are cooperating. 

If you are preparing to sell your Millburn-Short Hills home, let's start with a comparative market analysis to find out your home value in today's market! I will also provide a net sheet to show your estimated sale proceeds. 

As your Millburn-Short Hills real estate professional, I will provide the expert guidance you need for a successful home sale! Contact me today, and let my 18 years of experience be your market advantage!  

Elaine Pruzon
Coldwell Banker Residential Brokerage
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New Credit Scoring Model Could Help New Jersey Home Buyers

Most New Jersey home buyers are familiar with FICO - the traditional credit scoring model that is used by lenders to determine borrowing risk. While FICO has dominated the credit scoring market for the past 20 years, the new VantageScore model is gaining momentum. Here is what it could mean for New Jersey home buyers!

Per a recent CNN Money article, VantageScore is now used by 4 of the 5 top mortgage lenders in the country. VantageScore is also used by:

7 of the top 10 financial institutions
6 of the top 10 credit card issuers
4 of the top 10 car loan companies

VantageScores have been around for a few years, but have been somewhat confusing to consumers because the numerical range has been different than FICO. However, the 3.0 version of VantageScore solves this. In the future, both VantageScore and FICO will follow a credit score range of 300 to 850. The higher the number, the better the score

There are a few other differences in the scoring models that could benefit home buyers and other credit applicants. VantageScores consider rent payments, utility bill payments and public records in their computations. This will provide credit scores for consumers with little or no borrowing history who fall through the cracks with FICO.

And because VantageScore was developed by the "big three" credit reporting agencies, the logistics in scoring are more uniform. Some variety in score between one bureau and other is normal, since not all lenders report to all bureaus.VantageScore claims to "lift" consumer credit scores in general because there are fewer variances in score tabulation.

Another big plus of VantageScore: collection accounts will not hurt your score if the balances are zero.

In other respects, the two scoring models are very similar - and neither one is going to tell you exactly how they come up with your score. Nor is your lender likely to tell you in advance which credit score company they will use in their lending decision. It's possible that lenders may use both FICO and VantageScore for a more complete picture of creditworthiness.

Understanding how credit scores work can help you get approved for a mortgage and help you save thousands of dollars in interest charges. No matter the scoring model used, the same basics of good credit apply: pay your monthly bills on time, and keep your credit use to a minimum!

As your real estate professional, I'm happy to share consumer information that benefits the residents of Millburn-Short Hills, Livingston, and Summit. Please feel welcome to pass this information along! 

When you have questions about New Jersey real estate, I will be here to help you! Just give me a call!

Elaine Pruzon
Coldwell Banker Residential Brokerage
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New Jersey Home Prices Begin 2013 on Positive Note

Recent information from CoreLogic shows that home prices moved higher in January 2013, giving optimism for continued price growth through the rest of the year. There's no hibernation for the real estate market, with sales activity up sharply as well!

Here is a look at the big picture, along with the latest news for New Jersey real estate!

Nationally, the Home Price Index in January 2013 scored 9.7% higher than January 2012. This includes distressed property sales as well as equity sales. This is the biggest leap in prices since April 2006, and also represents the 11th consecutive month of price gains.

Taking peek at home sales activity in comparison, the National Association of Realtors® reports that the Pending Sales Index for January 2013 was 9.5% higher than January 2012. This index looks at contact activity in the market; namely the volume of homes for sale that receive accepted offers.

Looking at the two sets of analytics, it's easy to see that prices are following demand, and that 2013 is starting off well for most housing markets in the country.

Closer to home, CoreLogic shows that the region of New York, White Plains and Wayne, NJ reflected a January 2013 Home Price Index 11.2% higher than a year ago.

Meanwhile, the National Association of Realtors® Pending Sales Index for the Northeast came in 10.5% higher in January 2013 over January 2013.

When the State of New Jersey is separated out by itself, the increase in the Home Price Index is more reserved, showing a gain of 1.5% over a year ago, including distressed sales. Locations that are closer to major metropolitan areas, with public transportation access, are faring better than the outlying communities.

What does it all mean for Millburn-Short Hills home values? We are seeing gradual price improvement as home inventories are absorbed, and so long as the economy remains stable and job prospects are good, we can expect continued gains. Please remember that all real estate is local, however, and to find out how home values are doing in your neighborhood, just give me a call!

As your Millburn-Short Hills real estate professional, I am here to help you whenever you are thinking of buying or selling a home! Contact me today, and let my 18 years of experience give you the advantage in our real estate market!

Elaine Pruzon
Coldwell Banker Residential Brokerage
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See My Listings
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