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Real Estate Insight

New Jersey Housing Inventory

Currently, all of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices.

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Real Estate Insight

New Jersey Homes For Sale Numbers Fall

The number of homes being offered for sale in New Jersey has fallen to the fewest in the past 12 years.

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Real Estate Insight

Delinquent Mortgage Loans in New Jersey Decline

The percentage of delinquent mortgage loans in New Jersey that are 90+ days past due fell to 4.1%, down from a peak of 11.4% in September 2012, but still remains the highest delinquent mortgage rate in the United States.

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Real Estate Insight

Student Debt Hampers Home Buying

A report from the National Association of Realtors looking at student debt and housing finds that 83 percent of millennials who do not own a home cite student debt as the reason.

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Real Estate Insight

Newark Vies To Become Second Amazon Headquarters

Newark was selected to be New Jersey’s state endorsed recommendation in the effort to land Amazon’s second headquarters.

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Real Estate Insight

Mortgage Company Offers Student Loan Repayment Assistance

Eagle Home Mortgage offers a unique lending product targeting Millenials that helps homebuyers pay off their student loan debt.

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Real Estate Insight

Home Purchase Contracts Rising in New Jersey

After declining by 7% in April, home purchase contracts in New Jersey have increased for four consecutive months. In August, the number of purchase contracts rose by 3% compared to the same month last year.

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Real Estate Insight

First-Time Homebuyer Numbers Climbing

First-time home buyers purchased 570,000 single-family homes in the second quarter, compared to 426,000 in the first, marking the highest number of first-time home buyer purchases during a second quarter since1999, which had 599,000.

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Real Estate Insight

Judge Rules “Zestimates” Are Just Estimates

A federal judge ruled that Zillow “Zestimates” are just estimates, dismissing an Illinois lawsuit by homeowners who sued Zillow Group over its controversial home valuation algorithm – a tool which they alleged had undervalued their homes and made them harder to sell.

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Real Estate Insight

After the Condo Boom

Three years after the condo boom swept through New York, developers citywide are sitting on unsold units.

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Real Estate Insight

Investor Owned Housing Units

About 23 percent of residential homes built for one to four families are now owned by investors.  Out of about 125 million households in the U.S., an estimated 43 million live in investor-owned housing units.

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Real Estate Insight

Toronto Real Estate Booming

Rental supply in Toronto is down to two weeks, meaning it would take that long to rent everything in town, and average rents have hit an all-time high.

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Real Estate Insight

Has the Real Estate Market Reached Its Peak?

More than half of respondents to an NREI survey conducted in July said the real estate cycle has reached its peak. The percentage of survey respondents who believe we are currently at the peak of the market totaled 52 percent.

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Real Estate Insight

Underwater Homeowner Numbers Continue to Drop

The population of underwater homeowners with no home equity in the US has dropped by nearly 1 million borrowers since last year. This marks the first time the number of underwater homeowners has dropped below 2 million since 2006.

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Real Estate Insight

Investors and Non-Occupant Buyers in US

Nationwide, about a third of home and condo sales went to investors or other non-occupant buyers last year.

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Real Estate Insight

Foreign Buyers and Immigrants Increasingly Buying in US

Foreign buyers and recent immigrants purchased $153 billion of residential property in the US over the last year, an almost 50% increase from the year before.

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Real Estate Insight

Canadian Lumber Tariffs Affecting US Homebuilders

Homebuilders are feeling the impact of the rise in Canadian lumber tariffs.

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Real Estate Insight

Amazon Announces New Real Estate Service

Amazon recently disclosed a new real estate service coming to its users, that will compete with Zillow and Redfin.

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Real Estate Insight

New Tall Condo Projects Launched in Jersey City

A decade after the financial crisis and condo market implosion, two new tall condo projects launched sales in Jersey City, with more than 670 apartments in a variety of styles, finishes and prices.

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Real Estate Insight

New Real Estate Listing Service: Nextdoor

Neighborhood social network Nextdoor launched a real estate listing service that now competes with Zillow, Trulia, realtor.com, Redfin, and other online real estate listing sites.

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Real Estate Insight

New Jersey Landlords Adding Urban Amenities

New Jersey office landlords have been adding urban amenities like food trucks and fitness centers to stay competitive.

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Real Estate Insight

Home Occupancy Length on the Rise

The average time someone stays in their home has risen to 8.5 years, the highest they’ve seen since data began in 2008.

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Real Estate Insight

Manhattan Condo Prices Trending Down

In Manhattan, the average unit price on condos approved for market has been steadily trending down over the past two years.

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Real Estate Insight

What Really Killed The Malls?

Newer shopping centers played a bigger role in the demise of malls than increased online shopping did over the past 10 years.

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Real Estate Insight

China May Threaten the New York Real Estate Market

A regulatory crackdown in Beijing on capital leaving China is threatening the flow of cash into New York’s real estate market.

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Real Estate Insight

Developers Increasingly Moving to Concrete

Developers are swapping steel for concrete, discovering it allows for faster and cheaper construction.

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Real Estate Insight

Home Sales Decline After First Quarter Growth

Existing home sales rose 1.4% in the first quarter 2017 and reached their fastest pace in 10 years, but fell 11.4% in April.

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Real Estate Insight

It’s a Renter’s Market for Office Space

Office space is getting cheaper in many urban markets as a result of a boost in new supply giving tenants more power.

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Real Estate Insight

Rent in NYC on the Decline

The share of New York City rentals that cut prices surpassed 42% in October 2016, the highest level since December 2010.

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Real Estate Insight

Commercial and Industrial Lending Slowing

Bank lending to consumers and businesses is slowing down. As of last week, commercial and industrial lending had not increased since September 2016, the first six-month period of declines since the aftermath of the financial crisis.

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Real Estate Insight

Cost of Building Materials Rising

The cost of building materials including lumber and concrete is on the rise according to the Producer Price Index (PPI) released April 13.

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Real Estate Insight

The Construction Labor Market

A very tight construction labor market has many apartment building developers facing a shortage of workers to complete their projects.

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Real Estate Insight

Traditional Office Buildings Embrace Tech Startups

Hoping to attract bigger, creditworthy tenants, landlords with big traditional office buildings are putting tech start-ups in small chunks of space to give their buildings a cool vibe.

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Real Estate Insight

Manhattan Rents Falling

Rents fell in February 2017 for Manhattan apartments of all sizes, the first across-the-board price decline in at least four years.

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Real Estate Insight

Rents Declining in Major US Cities

Rents in major US cities declined about 1% in 2016 from 2015 levels.

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Real Estate Insight

United States Apartment Rents

US apartment rents rose 3.8% in 2016, a significant drop from the recent high of 5.6% year-over-year growth in 2015.

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Real Estate Insight

New Housing in Jersey City

Over 7,000 new housing units are expected in Jersey City in 2017.

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Real Estate Insight

Airbnb in New Jersey

New Jersey Airbnb hosts earned over $50M in 2016.

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Real Estate Insight

Financing Apartment Buildings

Apartment Building Owners Are Recently Facing Higher Rates on Loans.

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Real Estate Insight

Real Estate Taxes in New Jersey

The 2015 American Community Survey data shows that New Jersey still leads the nation with the highest average annual real estate tax (RET) bill of $8,180.

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Real Estate Insight

New Jersey Foreclosures

New Jersey Topped The National Foreclosure List For Second Consecutive Year.

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Real Estate Insight

Chinese Overseas Investment in Real Estate

Chinese overseas investment in real estate is poised to drop for the first time in about 15 years, according to a new report by a government think tank.

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Real Estate Insight

Changes in Construction Financing

As banks pullback construction financing, developers are increasingly turning to life companies for construction financing, particularly developers who also plan to hold the completed property long-term.

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Real Estate Insight

HUD Suspends Mortgage Insurance Premium Reductions

The Department of Housing and Urban Development announced it suspended the reduction of Mortgage Insurance Premiums, effective immediately.

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Real Estate Insight

Development Seeks Transit Options

Saxum Real Estate Partners has launched a fund to deploy $75 million to acquire properties in transit-oriented downtowns, starting with an acquisition in downtown Red Bank, New Jersey.

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Real Estate Insight

New Jersey Developer Partners With Uber

New Jersey Real Estate Developer, Capodagli Property Company/Meridia has partnered with Uber to help reduce people’s dependence on owning a car.  New lease signers at Meridia Properties will get $100 Uber credit.

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Real Estate Insight

Homebuilder Sentiment

Homebuilder sentiment spiked 7 points in December 2016.

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Real Estate Insight

The Hotel Market Mystery

Investors spent less that half as much money buying and selling hotel properties in the first half of 2016 as they did last year.

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Real Estate Insight

Foreclosure Activity Increase

U.S. Foreclosure Activity Increased 27 Percent in October from a 129-month low in September, the biggest monthly increase since August 2007.

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Real Estate Insight

US Home Prices on the Rise

Average US Home Prices finally topped record levels set in July 2006, according to the S&P CoreLogic Case-Shiller Index.

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Real Estate Insight

Where Are Mortgage Dollars Coming From?

Banks accounted for less than half of the mortgage dollars extended to borrowers in the 3rd quarter. This is the 1st quarter that banks, credit unions other depository institutions have fallen below that threshold in more than 30 years.

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Real Estate Insight

Mortgage Originations Projected to Surge

Government-sponsored enterprise, Freddie Mac is currently projecting a “surge” in mortgage originations during the third quarter, further reinforcing its view that 2016 will be the “best year” for home sales since 2006.

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Real Estate Insight

Newark Expansion

Newark recently began expansion of Riverfront Park along the Passaic River.

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Real Estate Insight

Making Money in a Rising Market

If you sign a contract to buy property in a rising real estate market, you’ve already made money by the time you close.

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Real Estate Insight

Biggest Driver of Residential Real Estate

Household income is the biggest driver of residential real estate markets.

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Real Estate Insight

Top Indicator For Real Estate Growth

The most important economic indicator for housing and real estate is job creation.

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Real Estate Insight

Brooklyn Rent Breaks

Brooklyn’s rental market is becoming saturated, pushing landlords to offer breaks on rent, including one and two months free in some cases.

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Real Estate Insight

The Rising Costs of Building

50 years ago, about one-fifth of the cost of a new building went to systems such as heating, cooling, and lighting. Now, those systems are responsible for about 60 to 75% of construction costs.

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Real Estate Insight

Will Your Home Equity Line of Credit Change?

840,000 home-equity lines of credit (HELOCs) are resetting this year with principal now being due monthly in addition to just interest.

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Real Estate Insight

Real Estate Prices

Real estate prices are 2% below the peak reached in July 2006 according to S&P CoreLogic Case-Shiller Indices.

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Real Estate Insight

Is Builder Confidence Growing?

Although The National Association of Home Builders recently said builder confidence is growing, not all builders are agreed due in part to the fact that good lots in many places are hard to find and current banking practices make them too restrictive for builders.

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Women and Millenial Mortgages

Women are the primary borrowers on a third of millennial mortgages.

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First Time Homebuyers Finding Difficulty

Lenders remain resistant to making loans to many potential first-time homebuyers, especially younger people who may not have built a credit history or gathered enough money for a large down payment.

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New Jersey Tax Relief

Gov. Chris Christie’s proposed school funding overhaul could produce some property tax relief for as many as 368 towns across New Jersey according to state data.

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Insight Into Multifamily Loans

The delinquency rate for bank-held multifamily loans was 0.26 percent in the first quarter this year, the lowest since 2005, data from the Mortgage Bankers Association shows.

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Foreign Real Estate Investing in the US

Foreign real estate investment in U.S. declined in the last year.

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Real Estate Trends in Retail

Department stores are being replaced by newer types of retail tenants like supermarkets, gyms, restaurants and movie theaters at American shopping malls.

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Home Prices Outstripping Inflation

Home prices are rising twice as fast as inflation according to Case-Shiller Home Prices Indices.

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All the Single Ladies…Are Buying Houses

Single women are now the 2nd largest home buying group after married couples.

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New Jersey Home Ownership Declining

New Jersey’s homeownership rate declined from 71.3% in 2005.Q1 to 60.9% in 2016.Q1, its lowest level in more than ten years.

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US Home Sales Surge

US new home sales posted their strongest month in more than 8 years in April of this year, while prices jumped to a record level.

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Home Loans For Low Credit Scores

Wells Fargo will offer a low-down-payment mortgage loan that allows borrowers with credit scores as low as 620 to make down payments as low as 3%, while allowing them to use income from family members or renters to qualify.

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Demand For Industrial Space

Demand for big industrial space has soared past surging supply according to Commercial Real Estate Services, Worldwide (CBRE).

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Disposable Income and Mortgage Debt

The share of US consumers’ disposable income going to pay mortgage debt is now at its lowest level in 35 years according to the latest S&P/Experian Consumer Credit Default Indices.

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Home Sales and Apartment Rentals

Homes sales and apartment rentals are inversely related.

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Home Prices and Income

From 1992-2005, home prices went up 205% while income during that period only rose 10%.

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Luxury Home Buyers Vs. First-Time Buyers

Luxury home buyers normally buy in spring and summer whereas 1st time homebuyers buy throughout the year.

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Population Figures and Home Prices

Declining population typically reduces housing demand and home prices.

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What is a Letter of Attornment?

A letter of attornment is a notice from a landlord to a tenant that the property has been sold and which directs the tenant to pay rent to the new owner.

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Equity Returning to Housing Market

One million borrowers regained home equity In 2015.

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New York Real Estate

The market for high end rentals in New York City is slowing.

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The Rise of Multi Family Dwellings

Single family building permits declined but multi-family building permits increased in 2015 in New Jersey.

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Are People Buying or Renting in Manhattan?

Over a third of Manhattan new development condos sold in 2015 were later listed for rent.

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Rental Property in New Jersey

Demand for rental apartments remains strong in NJ with statewide occupancy rates being amongst the highest in the US.

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New Jersey Foreclosures

The pace of foreclosure filings in New Jersey remains elevated at a time when other states are experiencing decreasing activity. New Jersey foreclosure filings in 2015 recorded a 14% increase over the prior year, rising from 67,350 to 76,800.

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Insight Into New Jersey’s Inventory of Homes

More than half of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices.

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What Do Millenials Want Most in a New Home?

A modern, updated kitchen topped the list of ideal home features in a recent survey of millennials, registering as most important to more than a third of respondents.

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How Long Do You Have for a Like Kind Exchange?

The IRS gives you 45 days from the closing date on sale property to identify up to 3 replacements for a 1031 (like kind) exchange.

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What is a Real Estate Variance?

A real estate variance is a request to deviate from current zoning requirements. If granted, it permits the owner to use the land in a manner not otherwise permitted by the zoning ordinance. It is not a change in the zoning law. Instead, it is a specific waiver of requirements of the zoning ordinance.

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How Does Land Depreciation Work?

Land does not depreciate for tax purposes because it is considered to have an infinite useful life.   Land improvements like buildings, furnishings, equipment, etc. have limited useful lives and can be depreciated.

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What Are Riparian Rights?

Riparian rights are the rights of land owners bordering waterways that relate to the water and its use.

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Short Term Vs. Long Term Rentals

Although short term rentals can produce higher income for property owners, they normally result in higher management, maintenance and advertising costs for owners than long term property rentals.

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Buying Property With No Cash Down

A property purchased with nothing down is unlikely to have much, if any, cash flow.

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Today’s Definition: Hypothecate

Hypothecate: To pledge (property) as security or collateral for a debt.

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The Surprising Truth About Lots and Income

A moderately priced house built on a great lot will appreciate more and yield higher income on average than a larger, expensive house will on the same lot.

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Beware of Property Foreclosure Claims

If someone has a claim against a property in foreclosure and does not receive proper notice that the claim is about to be erased by the sale, their claim is not extinguished.

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The Financial Benefit of Garages and Basements

Garages and basements are cheap spaces that typically add more value to a property than their cost.

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Easing Mortgage Standards

Easing mortgage standards are allowing first-time homebuyers to finally jump into the housing market after a rough start to the year held a lot of them back. The share of mortgages going to first-time buyers has risen sharply since the start of the year.

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New Jersey’s Industrial Real Estate Market

New Jersey’s industrial real estate market continued to shine in the third quarter, bringing vacancy down to levels not seen since before the recession.

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New Jersey Mortgage Delinquency

The mortgage delinquency rate in New Jersey is currently 8.3%. The national average is 3.5%.

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Growth of New Jersey Home Prices

The average New Jersey home prices are currently increasing at a 3% annual rate.

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2015 New Jersey Home Sales

New Jersey Home Sales in 2015 are the highest since 2005.

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Buying a Home Sight Unseen

A survey commissioned by online brokerage Redfin of 2,134 Americans finds one in five buyers made an offer on a home without having visited it in person.

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Investing in Senior Housing

Investor interest in the seniors housing sector is strong and growing. Transaction volumes are at record high levels, pricing is close to a cyclical peak, and auctions are active and often fully priced.

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The Widening Gap Between Home Owners and Appraisers

For the seventh consecutive month,the gap has widened between what home owners say their home is worth compared to what appraisers say, according to Quicken Loans’ Home Price Perception Index. Home owner estimates now stand 2.65 percent higher than appraiser opinions, the largest gap in more than a year, according to the index.

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Banks Are Loosening Underwriting Criteria for Big Mortgages

The nation’s biggest banks are loosening their underwriting criteria for big mortgages, as lenders ramp up competition to grab a bigger share of the high-end housing market.

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Qualifying for a Mortgage with Bad Credit

You may still qualify for a mortgage loan even if you have a lower credit score if you pay a big down payment and don’t have much other personal debt in your name.

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FHA Loan Credit Requirements

FHA mortgage loan credit requirements tend to be more relaxed than the credit requirements for conventional loans.

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New Jersey Property Tax Appeals

Property tax appeals continue to rise in New Jersey as property owners seek to have their property taxes reduced to align them with lower property values since the housing peak of 2006.

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New Jersey Home Prices

Average home prices in New Jersey are still down about 20 percent statewide from 2006 peak prices, which is twice as much as the national average.

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Upcoming Changes to Fannie Mae

Fannie Mae starts a program this year that lets lenders include income from non-borrowers within a household (i.e. extended family members) toward qualifying for a loan.

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The Role of Community Banks in Real Estate

Community banks are filling the gaps in the residential mortgage market left by an exodus of big banks in the wake of the Dodd-Frank Wall Street Reform and Consumer Protection Act.

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New Jersey Foreclosures

New Jersey foreclosure filings spiked 24% in the first half of 2015 fueled largely by trouble in South Jersey housing markets including Atlantic City as well as Cape May, Ocean and Cumberland Counties.

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Configuring Property Depreciation Allowance

Property Depreciation Allowance = (Depreciable Basis)/(Useful Life); Useful life=27.5 years for residential property, 39 years for non-residential property.

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Gross Rent Multiplier

Gross Rent Multiplier = Sales Price/Gross Monthly Rent.

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The Effect of Bidding Wars on Property Value

Bidding wars and sales concessions can distort property values in a local real estate market.

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Shape Matters

Square housing lots are generally more desirable than oddly shaped lots.

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How Lower Interest Rates Affect Buyers

Lower interest rates push housing demand by expanding a buyer’s purchasing power

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Overpricing Your Home

When you overprice your home, you give the buyer too much power, leverage and control in the negotiation.

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Price vs. Value

Sellers determine price but the market determines value.

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How Short Sales and Foreclosures Affect Home Values

When short sales and foreclosures represent less than 30% of real estate market sales, they should be deemed outliers and not be considered in determining home values.

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How Home Buyers Price

Home buyers price from the bottom of the market up-starting with the least expensive, underpriced house.

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How Home Sellers Price Real Estate

Home sellers price from the top of the market down-starting with the most expensive, overpriced house.

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Strongest Housing Markets in New Jersey

The strongest housing markets in New Jersey are the ones closest to jobs, major highways and New York City.  

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5 Real Estate Market Vital Sign Indicators

5 real estate market vital sign indicators: existing home sales new home building permits mortgage loan defaults foreclosure sales interest rates

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Market Bottoms and Peaks

Real estate market bottoms tend to take more time to develop than real estate market peaks.

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Decline in Home Ownership Continues

The homeownership rate continued its multi-year slide, falling to a rate not seen since 1993.

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New Jersey Land Prices

New Jersey’s land is worth more per acre than any other state (almost 50% more valuable than the 2nd highest state).

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Pricing Your Home Accurately

When you overprice a home it takes more than three times as long to sell.

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New Jersey Luxury Homes

The biggest increase in NJ home buying activity recently is for homes in the $600,000-$2.5 million price range.  

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Future of New Jersey Housing

70% of New Jersey households have no children–this will significantly affect demand for large suburban single-family housing.  

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Rent Vs. Own

Rental apartment demand continues to soar as mortgage lending requirements remain relatively strict.

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Income Drives Real Estate Sales

Income drives real estate sales. Even though more people in the US are working now than before the global financial crisis, the quality of jobs are lower and there are more part-time workers, so incomes are flat.

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The Importance of Rental Consistency

In order to maximize return on investment (ROI), getting a property rented fast to a good tenant is more important than getting the highest rent because just 1 month of vacancy can destroy your ROI and cash flow for the year.

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Paying Off Your Mortgage Early

Bi-weekly early mortgage payoff plans essentially make about 1 extra monthly mortgage payment for a borrower every year. You can accomplish this on your own without paying your lender a fee to join their program.

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Demand for Housing Near Mass Transit

Demand for housing in pedestrian-friendly downtowns near mass transit is increasing in cities throughout the US.

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First Time Home Owners

In 2014, first-timers made up about 33% of ‪home‬ buyers—the lowest share in nearly three decades, and well below the historic average of about 40%. This is due in large measure to high student loan debt.

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Homes that Spend More Time on the Market

Homes that spend more time on the market usually sell for less money.

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Functional obsolescence

Functional obsolescence reduces the desirability of your home to buyers and makes it more difficult to sell. Here are some examples of functional obsolescence: 1) No bathrooms on first floor 2) Bedrooms with no closest 3) Knob-and-tube wiring or fuses instead of a circuit breaker box 4) One outlet per room

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Housing Inventory

The break-even point for months supply of ‪‎housing‬ inventory is about 6 months–if housing inventory is higher than 6 months prices normally fall, when housing inventory is lower than 6 months, property prices normally increase.

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Eviction history

Eviction history is more important than personal credit score in determining whether a prospective tenant will pay their rent on time.

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Cleaning surface mold

When you clean surface mold in your ‪home‬, don’t mix ammonia or any detergent containing ammonia with bleach because the combination forms a poisonous gas.

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4 causes of excess home moisture to avoid/address

Moisture is the key cause of mold growth in ‪homes‬. 4 causes of excess home moisture to avoid/address: 1. Humidity 2. Leaking pipes 3. Poor ventilation 4. Flooding

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Useful Life of Your Roof

The excess weight caused by dirt, debris and snow accumulations may rot, stress and reduce the useful life your roof.

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New lending guidelines

The new lending guidelines announced by #mortgage giants Fannie Mae and Freddie Mac will soon help more low-income and first-time buyers afford #homes by allowing them to buy a home with a down payment as low as 3%.

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The 3 Keys To Buying Property That Will Make You The Most Money

Q: Which properties will make me the most money? (The 3 Keys To Buying Property That Will Make You The Most Money) June, Freeport, NY A: Good question, June. There are many factors that play into whether you’ll make money on a property you buy, but here are 3 key ones: 1. Picking the right area/neighborhood/street. This is critical because the right area will make your property more attractive to tenants if it’s a rental property and more attractive to buyers whenever you choose to sell your property 2. Picking the right kind of property-based on your budget (what you can afford to buy and maintain while you own it) and your exit strategy—exit strategy just means what you ultimately […]

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House Prices

Whenever house prices outpace income, a downward correction in home prices is forthcoming.

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Flood zones

Most ‪‎homes‬ in a flood zone never flood. Flood zones are determined by a probability index: that it may flood once within 100 years.

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Flood Insurance premiums

Flood Insurance premiums are determined by many factors including deductible amount as well the location, age, occupancy and type of property structure in the floodplain.

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Capital improvements

Capital improvements to a home add only 50% to ‪#‎home‬ value on average.

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Lending requirements

Tighter lending requirements affects 1st time home buyers most in a real estate market.

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Negotiating power transfers

Real Estate Insights: Whenever the pace of property sales slows, negotiating power transfers from sellers to buyers.

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Zillow Home Price Estimates

Zillow home price estimates are less accurate than property appraisals and realtor comparative market analyses because they use linear regression algorithms based on a point system to estimate home values.

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House Pricing

A 10% decline in house price is equivalent to a 25% decline in land value.

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Property appraisals

Property appraisals reflect prior market prices when purchase contracts were signed, not when properties are actually closed and sold.

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The Housing Affordabilty Index

The Housing Affordability Index measures the degree to which a typical family can afford the monthly ‪‎mortgage‬ payments on a typical home.

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Eviction History

Real Estate Insights: Eviction history is more important than credit score or income in determining whether a prospective tenant will pay their rent on time

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3 Monster Mistakes People Make When They Sell A Home

1. Counting a room without a window or a closet as a bedroom 2. Not disclosing flaws and repair items to buyers 3. Asking for an unrealistically high price for a home

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Mortgage calculators don’t factor all the expenses

Most mortgage calculators don’t factor all the expenses that many borrowers are likely to have to pay after they buy a home. 3 examples of expenses that many homeowners, particularly first time homeowners will face that many mortgage calculators overlook are: 1) private mortgage insurance (PMI 2) Property Taxes 3) HOA (home owner’s association) fees and monthly condominium fees.

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FICO Changes May Ease Credit Access

Recent changes to the way Fair Isaac computes people’s credit score are welcomed, long overdue and benefit borrowers, creditors and real estate markets across the country. The revision to the credit score algorithm that eliminates medical bills from consideration is especially appropriate given the high incidence of mistakes and miscommunication. What a lot of people don’t know is that creditors report information to the 3 major credit reporting agencies on a voluntary and inconsistent basis which unfortunately means that mistakes are made all the time; AND the 3 big credit reporting agencies : Experian, Transunion and Equifax, really don’t have much of an incentive to fix mistakes on your credit report. The good news is that you can take control […]

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Gerald’s Real Estate Article Insights: 5 Housing Trends for Summer 2014

Looser mortgage lending standards and more real estate financing options for self-employed borrowers is welcomed news this summer. In many real estate markets, mine included, there continues to be a shortage of available homes for sale. Smart buyers must therefore be more patient than ever in order to get good real estate value—as I often tell my coaching students, you make your money in real estate when you buy. When you buy, you have the most control in a real estate transaction—when you buy you can always say no, walk away and live to buy another day. It’s hard to say no when everyone else in the market and the media is putting pressure on you to move quickly and […]

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Gerald’s Real Estate Article Insights: Reasons to Use Home Equity – 5 Good, 1 Bad

Untapped home equity can be a dangerous temptation for homeowners and real estate investors. You have to be careful before you take on additional debt, even if it’s mortgage debt which is normally considered to be good debt, because when you do, you increase your monthly fixed payments. People often tap home equity to renovate or upgrade a property. This may be a very good idea if you’re renovating an income-generating property so that it earns more money for you. However, I have seen many people over-renovate their primary residence spending tens of thousands of dollars on over-the-top kitchens and bathrooms that they didn’t need and didn’t really increase the value of their home!—also, don’t forget, you’re supposed to pay […]

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Why The Housing Market is Suddenly Struggling

The recent cooling of the US housing market is as much the result of unrealistic earlier expectations of another impending real estate boom as anything else. The first signs of increased real estate activity sent journalists into a frenzy. Economic fundamentals not media hype drive real estate, as all economic activity ultimately is driven by demand. Also, every residential property market is different and some markets aren’t cooling right now. Housing affordability in many places has gone down which obviously has a dampening effect on demand particularly for first time home buyers who are essential to all residential real estate markets. Click here for the full article!

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U.S. housing market in recovery…thanks to China?

More foreign buyers of US real estate is a natural consequence of increased global trade. In addition, housing bubbles in places like China make US real estate investment more attractive. The percentage of foreign buyer-driven real estate transactions throughout the United States is exaggerated. Foreign buyers are only buying in big numbers in a small select group of markets and they are only buying certain types of properties so their impact on US real estate in general is not as high as you may think. Ultimately, income and household formation are bigger drivers of real estate demand than foreign buyers. -Gerald Click here for the original article!

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U.S. Banks Move Away From Home

This latest data that shows a record low in real-estate-linked debt’s share of bank assets highlights the mortgage lending reluctance that we’ve been seeing in US real estate for quite some time. Unfortunately, good borrowers today are being penalized for the sins of the past. In a typical knee-jerk reaction, the pendulum has swung way too far in the other direction locking many responsible buyers, particularly younger, first time buyers out of the real estate market. The fact that Wells Fargo is cutting its minimum credit scores for loans backed by Fannie Mae and Freddie Mac however is a welcome sign. -Gerald Click here for the original article!

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Crowdsourcing Comes to Commercial Real Estate

Crowdsourcing, the practice of obtaining services, ideas, or content by soliciting contributions from a large group of people, especially from an on line community is shaking up the economic status quo in many ways. Crowdsourcing in commercial real estate is providing access to major real estate developments for individual investors previously locked out of that sector. As with any investment, there are risks, particularly now as these new crowdsourcing models evolve. Nevertheless, why should accredited investors have all the fun? A truly free market should allow access to these kinds of investments to regular people too. -Gerald Click here for the original article!

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Why Millenials Rent

A lot has been written recently about the changing attitudes among Millenials regarding home ownership. This change is obviously driven primarily by current economic and credit realities in the US. The desire for home ownership is high among Millenials like previous generations, however, current economic circumstances make buying more difficult. Income ultimately drives everything in our economy—the American Dream of home ownership is alive and well but for many in the Millenial generation it is a dream deferred. -Gerald Click here for the original article!

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Nearly 10 Million Mortgaged Homes are Still Underwater

One of the main reasons real estate prices throughout much of the US have risen so precipitously recently is because of the lack of supply of houses to buy. That shortage of supply is due in large measure to the millions of homeowners whose mortgages are still underwater and are unable to sell. The ‘technical’ end to the recession occurred a long time ago but the mortgage crisis still looms large in many places particularly in working class and lower-income neighborhoods. -Gerald Click here for the original article!

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Housing Recovery Leaves Millennials Out in the Cold

The percentage of 1st time home buyers is shrinking. Tight lending standards are partially to blame. As a result of improved technology and globalization, the US economy requires fewer workers—this in turn is contributing to high unemployment among young adults. We’re still missing 1.3 million people working since the beginning of the recession and many of the jobs that have been created are low wage service jobs. Increasing job opportunities and income among young people is critical for the overall economy and is critical for sustaining a real estate recovery. When a young person buys their first home from someone who’s outgrown that home, the purchase and sale triggers another purchase and sale of a higher priced home—this is what […]

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NJ Still Drowning in ‘Underwater’ Mortgages, New Study Reveals

Real estate price swings in the US are most dramatic on the coasts. Many property owners who purchased real estate when prices were sky high during housing bubble, particularly in urban areas are still underwater without any equity. The truth is that the value of a property only matters when you buy it or sell it just like a stock or another asset. The price, the value and your equity position while you own a property is less important than whether you can afford to keep up with mortgage payments and maintenance costs. Although having negative equity in a property is disconcerting, the key to thriving as a property owner is being realistic about what you can reasonably afford when […]

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All Cash Homes Sales Hit Record High

Cash purchases for homes are at all-time highs for two primary reasons: 1) more wealthy foreign buyers see US real estate as a safe place to park assets 2) a low interest rate environment has institutional buyers chasing higher returns wherever they can find them. Despite increased competition for real estate, you should never allow the fear of losing a deal trick you into paying too much for a property. There will always be new buying opportunities– patience is the key to sound real estate investing. -Gerald Click here for the original article!

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Consumer Financial Protection Bureau Taking Mortgage Complaints Seriously

After all the fraud, deception and now infamous robosigning that went on during the housing bubble, it is hard to believe that there’s someone out there looking out for the mortgage consumer. The CFPB states as its mission to make markets for consumer financial products and services work for Americans. Giving consumers the information they need to understand the terms of their agreements with financial companies is a worthy goal that is sorely needed in our country given how little financial education Americans at all age levels have. Click here for the original article!

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New Jersey Foreclosures Are Slowest in the Nation

The way that home foreclosures are handled varies enormously from state to state in the United States. For example, the time it takes for a home foreclosure to work through the system in the state of Georgia is typically weeks, in New Jersey it often takes several years. It’s important that homeowners and real estate professionals are aware of the idiosyncrasies of the local real estate markets where they live and do business. There is no “real estate market” per se; there are lots of local real markets each with its own unique laws, regulations and procedures. -Gerald Click here for the original article!

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Looking To Buy? Best Cities for First-Time Home Buyers

Buying a house for the first time is daunting and all the paperwork & forms can be intimidating. Nevertheless, applying for a mortgage is a good financial exercise that among other things forces you to pay attention to your personal credit, which increasingly has enormous impact on your financial life. However, beware of generalizations you read in the financial press like “Best cities for first-time home buyers”! You don’t buy an entire city or a real estate market, you buy an individual property which is why it’s so important you do all the necessary due diligence to make certain you buy wisely—buyers have the most control in any transaction, so do your homework before you sign a purchase contract. Click […]

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3 Reasons THIS Spring Could Save Chilled Housing

The nasty winter weather we’ve unfortunately had to endure over the last few months has negatively affected real estate activity. In my state of New Jersey, we had 13 snow storms in January and February! The good news is that significant snow and bad weather only affects home sales temporarily. Housing demand just gets pushed a little further into the future—buyers who didn’t make offers in the middle of winter because they were snowed in don’t suddenly change their minds about buying—they just wait until the weather breaks. This bodes well for real estate sales this spring. -Gerald Click here for the original article!

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Home Sales Woes: Fewer People Moving Out

The 2 things that affect residential real estate the most are new household formation and income. Since income has enormous influence on new household formation, it’s really income that drives real estate and the economy. The key to income growth is jobs—particularly jobs for young people entering or trying to enter the workforce for the first time as well as older displaced workers. Unfortunately, in the U.S., we’re still missing 1.3 million full-time jobs since the beginning of the recession. Household formation will remain tepid until younger people are able to get the jobs and additional income required to move out and form new households. -Gerald Click here for the original article!

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Underwater Mortgages Tick Up But Trend Down

We’re not out of the woods yet with respect to people being upside down on their mortgages.  This is particularly true in many coastal real estate markets that tend to experience bigger price swings.  In New Jersey, my home state, home prices tend to increase between 4-5% annually.  Based on that average appreciation, New Jersey home prices at the height of the real estate market bubble in 2005 reached 2020 price levels!  We have a ways to go, but I’m an eternal optimist and things are getting better. Click here for the original article!  

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Buying A Home Is Now 38% Cheaper Than Renting

Rent-versus-buy declarations like this one from Trulia’s chief economist often paint a misleading picture for people trying to decide whether it’s time to purchase a home.  The actual mortgage rate a borrower will pay depends on many factors that averaged mortgage rates don’t capture.  In addition, rent prices, property taxes and home insurance rates vary greatly from place to place.  If you’re buying property in a flood zone, you’ll have to add the additional cost of flood insurance to your calculation.  It’s important that any prospective homeowner do their own individual rent-versus-buy determination based on their credit profile and local housing market. -Gerald Click here for the original article!  

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New Jersey Leads Nation In Share of Distressed Mortgages

New Jersey is among several ‘judicial’ states in the US that process foreclosures in the court system.  This judicial review provides a layer of protection for struggling homeowners, giving them more time to avoid foreclosure by working out loan modifications or by selling their homes via a negotiated settlement called a short sale.  One consequence of this policy is much higher numbers of New Jersey homes in active or pre-foreclosure.  The actual number of distressed homes varies enormously from city to city within New Jersey based on income and unemployment levels as well as local housing demand.    The higher number of distressed homes also provides buying opportunities for savvy buyers and investors. -Gerald Click here for the original article!  

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Housing Inventory Continues to Fall

Housing inventory is low in many real estate markets across the US now due to a number of factors: 1) many homeowners who bought or refinanced at the height of the real estate market are still upside down on their mortgages which prevents them from selling without doing a short sale 2) there is still substantial “shadow inventory” from unresolved pre-foreclosures particularly in states like New Jersey that adjudicate foreclosures in the court system 3) Many builders are reluctant to start new construction projects because of fear of tepid demand -Gerald Click here for the original article!

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Why We Fall in Love—With Houses

It is often said that people make buying decisions with emotion and then justify them with logic.  This is especially true for home purchases.  This unfortunate tendency can be particularly destructive if you fall in love with a property that is intended strictly for investment and end up overpaying for it.  Emotions must be held in check, and subdued with cold, calculated, logic when you are making buying decisions on investment property. -Gerald Click here for the original article!  

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Wealthy Americans Pick Real Estate As Best Investment For 2014

Real estate has always been a predictable way to build wealth.  Real estate is also a good hedge against inflation.  Other financial benefits of real estate investing include cash flow, tax benefits and leveraged asset appreciation.  After a banner year on Wall Street, it shouldn’t surprise anyone that many stock investors are taking some of their profits off the table and looking to park them in a real, tangible asset like real estate. -Gerald Click here for the original article!  

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Welcome Relief for Homeowners, Then the Tax Bill

We’re still anxiously awaiting Congress’ extension of the Mortgage Forgiveness & Debt Relief Act (MFDRA) for 2014.  I am optimistic that Congress will extend the MFDRA to provide relief to homeowners.  Even without the extension of the MFDRA, the IRS allows exceptions that may eliminate any tax burden after the cancellation of mortgage debt.  Ask your accountant about IRS Publication 908. -Gerald Click here for the original article!  

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The Forecast For Housing in 2014: Higher Prices, Rates

It’s anyone’s guess where rates or housing prices are going to go over the next year.  You don’t need to be Nostradamus, you need to be like Macgyver.  The key is to try to be as prepared as you can for whatever the market throws at you.  Mortgage rate increases will definitely reduce the amount of house you can buy—about a 9% reduction in purchase potential for every 1% mortgage rate increase.  You should also consider non-traditional sources of financing, like seller financing, financing from private individuals and ‘hard money’ lenders for short term real estate rehab projects.  It’s not one size fits all—the type of financing you’ll need or can qualify for will depend on the amount of time […]

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Real Estate: Look For Value in 2014

Look for value in 2014? You should ALWAYS look for value in real estate or any other investment you make!  As billionaire investor, Warren Buffet once said, “Price is what you pay and value is what you get; if you’re a smart investor, the first will always be less than the second.”   You should never change your basic investing criteria based on what ‘the crowd’ is saying.  You make your money in real estate when you buy—when you buy at a discount, your profit is baked in from the start.  If there is less housing inventory and more competition out there, then you may have to make more purchase offers and wait a little longer to get a good deal.  […]

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It’s The Price That Sells a Home

Correct pricing is critical to selling a home at the highest possible price. When the asking price is too high, your house will only help sell other houses in your neighborhood. The more you overprice a property, the more likely you are to eventually sell it below market value.  If you want to sell, you should price your house to attract as many buyers as possible. The more buyers that come to see your home, the more they will compete for your house, which will drive your sales price up. -Gerald Click here for the original article!  

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Gerald’s Article Insights: Real Estate in 2014: A Need-to-Know Guide

Although mortgage rates remain at historic lows, lending standards for home buyers remain stringent.  New regulations intended to prevent risky mortgages from entering the market will keep underwriting standards strict.  With average FICO credit scores for conventional loans well above 700, establishing and maintaining good personal credit has never been more vital to obtaining a mortgage loan. -Gerald Click here for the original article!  

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Gerald’s Article Insights: Fannie, Freddie Give Non-Investor Home Buyers ‘First Look’ Period

Fannie Mae and Freddie Mac are giving first time homeowners an additional 5 day head start on investors to make offers on some of its properties.  First time homeowners now have 20 days with no competition from investors to view houses and submit bids.  Some of the property listings also come with attractive mortgage terms like 5% down payments and no mortgage insurance.  Fannie Mae’s listings can be found on homepath.com and Freddie Mac’s listings on homesteps.com. -Gerald Click here for the original article!

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Gerald’s Article Insights: NJ Foreclosure Pipeline Clogged

‘Judicial’ states like New Jersey and New York that require home foreclosures to go through the court system normally have more houses in the foreclosure pipeline and usually require more time to resolve mortgage defaults.  Homeowners who fall behind on their mortgage in these states have more time to find the most knowledgeable and experienced people to help them resolve their financial hardship. -Gerald Click here for the original article!

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Gerald’s Article Insights: Underwater Homeowners Could Face Extra Tax Burden in 2014

The Mortgage Forgiveness and Debt Relief Act has provided tax relief to homeowners upside down on their mortgage facing foreclosure who would otherwise have owed taxes on forgiven mortgage debt.  The original Mortgage Forgiveness and Debt Relief Act was introduced in Congress in 2007 and after first expiring in 2009 has been extended by Congress each year since 2009.  The Act expires again this month (January 2014).  With millions of homeowners around the country still upside down on their mortgage and facing foreclosure, hopefully Congress will extend the Act again for at least another year. -Gerald Click here for the original article!  

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Gerald’s Article Insights: 7 Ways to Stage Your Home For This Holiday Season

Staging helps make a home easier to sell because people buy on emotion and staging makes it easier for potential buyers to picture themselves in a home.  When staging, little things matter (odors, appearance and lighting all count).  Also, less is often more—you don’t have to go overboard furnishing every inch of a home, just the basics, neat and presentable—it’s a good idea to leave enough empty space for your buyers to imagine their belongings in the house. -Gerald Click here for the original article!  

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Gerald’s Article Insights: Home Equity And The Five-year Rule

It’s a good idea to have at least one exit strategy when you buy any asset especially one as expensive as a house.  Nobody can predict the future, but you can and should think about how you would deal with a job transfer, job loss, an extra mouth to feed or some other unexpected life event.   If you had to sell, do you have enough money to pay closing costs and transfer fees?  Would you be able to rent your property if you needed to?  If so, what is the current market rent and would the monthly rent cover your mortgage payment and other housing-related expenses?  There are no guarantees in life, but in real estate as with most financial […]

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Gerald’s Article Insights: Unrecorded Mortgage From ‘Bank of Mom’ Fails to Qualify for Interest Deduction

Your mortgage must be secured and recorded to be tax deductible.  If you borrow from a big financial institution to buy a home like most of us do, you shouldn’t have to worry about your lender making sure their collateral is safe and your interest payments are deductible.  Your lender should send you a statement every year indicating the amount of mortgage interest you paid—it’s a good idea to check that statement to make sure it matches the scheduled interest to be paid for that year on your mortgage loan’s amortization schedule.  There are some politicians who have recently suggested we reconsider the powerful mortgage interest deduction that property owners benefit from.  Eliminating or restricting the mortgage interest deduction would […]

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Gerald’s Article Insights: How Cash Income Can Cost You When Applying for a Mortgage

In addition to bank account cash deposits, you must be careful about all your credit card purchase activity for the few months before you close on your mortgage.  A big purchase like a car for example, may affect your debt-to-income ratio which could derail a mortgage approval.  As a precaution and part of your mortgage planning, I suggest you ask your mortgage broker or banker exactly what activities may spoil your mortgage confirmation; avoid all those activities until your mortgage is approved AND funded! -Gerald Click here for the original article!

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Gerald’s Article Insights: “How Much Should You Save to Buy a House?”

The ultimate cost of owning a house unfortunately goes well beyond the initial money required to purchase a home.  There are regular maintenance, upkeep and replacement costs you’ll have to pay for over time, particularly if you do not purchase a new home.  Home ownership is a worthy goal and in order to maintain your home, make certain you put aside enough reserves to pay for unexpected repairs and replacement of major items like a roof.  In order to do this, it’s a good idea not to spend your last dime when you purchase your property–leave some money left over for unanticipated costs which almost always occur. -Gerald Click here for the original article!  

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Gerald’s Article Insights: Now Americans Are Going Crazy About Tiny ‘Micro’ Apartments

The new micro-housing trend seen in cities across America underscores broader demographic changes that will affect the US economy and urban real estate markets for many years to come.  More than 2/3rds of all households have no children and housing demand in general is becoming more concentrated in areas where there are jobs.  In addition, people are living longer and seniors normally require less living space after they retire.  Smaller households require less living space which is why this micro-housing trend will continue. -Gerald Click here for the original article!  

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Gerald’s Article Insights: Congress Urges Loan Limits Stay Put

This letter sent by 13 Senators, one of whom is my Senator from New Jersey is a welcome sign that at least some of our representatives in Congress are paying attention to something other than raising money to get re-elected. While encouraging private growth in the mortgage market is an admirable goal, as the saying goes: the road to hell is paved with good intentions. Lowering the Freddie Mac and Fannie Mae loan limits may turn out to be a dangerous experiment that we can ill afford right now in the middle of an encouraging yet fragile real estate recovery. -Gerald   Click here for the original article!

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Gerald’s Article Insights: “Your Credit Score Needs to be This Good to Get a Mortgage”

Your credit score has an enormous influence on your ability to borrow money to buy a home or even to qualify to rent an apartment.  Your credit score also has a profound impact on many other aspects of your life like the qualifying to get a job, qualifying to get student loans, car loans or credit cards as well as the amount of interest you’ll ultimately pay on those loans.  There’s only one true credit score that is used by lenders to decide whether you qualify for a home loan, a car loan or some other kind of credit–that one true credit score is your FICO score; FICO stands for Fair Isaac  Corporation.  Proof of the fact that your FICO […]

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Gerald’s Article Insights: “Foreclosures dog even wealthiest home buyers”

Defaulting on your mortgage payments is rarely what you have in mind when you buy a property—but if you don’t have the money, then you can’t pay.   As the saying goes, you can’t get blood from a turnip.  The good news for people who did default on their mortgage during the financial crisis is that there are lots of other people who found themselves in this identical position.  With millions of people in the same unfortunate situation, it’s in the best interest of both banks and the federal government to find a responsible way to lend to previously foreclosed-upon homeowners who have since recovered financially.  It will most likely take more time and require more paperwork to get approved for […]

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Gerald’s Article Insights: Real Estate Matters | “Why You Need a Home Inspection Contingency”

You should always have a home inspection contingency in a real estate contract you sign to protect yourself from unforeseen problems with a property like termites, a leaky underground oil tank or major structural defects. In a hot real estate market where there is lots of competition between buyers, people often get frustrated are often tempted to cut corners just to win a bid and make a home purchase–this is a huge mistake that may come back to haunt you later. You have the most control in a transaction when you buy, if you waive the inspection contingency in real estate contract you sign, you may end up stuck purchasing a property with major problems that make the property uninhabitable […]

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Gerald’s Article Insights: “Why Real Estate Could Be the Next Hot Investment, Even Now”

Real estate is always a good investment if you know what you are doing regardless of whether the writer of this article says it’s the next hottest investment or not. Also, you should not use averages and macro trends like # of housing starts or # of new permits to make an individual real estate buying decision. There are people who make money and people who lose money in EVERY real estate market–you just want to make sure you are one of the former. The writer does give two good pieces of advice: 1) “Investors should should filter opportunities based on the project partner and project’s ability to generate yield & 2) investors should come in with an understanding that […]

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Gerald’s Article Insights: “5 Red Hot Housing Markets”

Headlines like RED HOT HOUSING MARKETS are compelling and attention-grabbing, but it’s important not to lose sight of the fact that banks are still saddled with tons of foreclosures and pre-foreclosure properties. Because there are still so many homeowners upside down on the mortgages or behind on their mortgage payments, banks are deliberately manipulating housing inventories giving the impression that a housing recovery is happening. Ultimately, income drives everything and a long sustained housing recovery is not going to happen until the economy and people’s incomes start rising again. Do your homework and get intimately familiar with your local real estate market because every residential real estate market is different—each local market has its own property characteristics, its own regulations […]

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Gerald’s Article Insights: “FHA gifts prior offending homeowners a shortened wait to purchase another home”

By the reducing the waiting period for a government-backed mortgage, this new FHA rule change represents a huge benefit to homeowners who’ve experienced financial hardship and found themselves unable to meet their mortgage obligations. The welcomed change incentivizes homeowners in mortgage default to resolve their current financial hardship quickly rather than languishing in pre-foreclosure limbo. The rule change should help homeowners in crisis to get back on the road to financial solvency and homeownership more quickly which is a boon for the real estate industry, the banking industry as well as the overall US economy. -Gerald Click Here to Read The Original Article!

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Gerald’s Article Insights: “HOA Horrors and How Not to Fall Victim to Them”

Proper due diligence is critical to making wise real estate buying decisions. While nobody can predict the future, you should always take the time to do your homework before you sign a purchase contract to buy real estate. Unexpected surprises that can affect your property are not limited to homeowner association documentation. Towns, gated communities and condominium associations may also have rules or ordinances that can have an enormous impact on your real estate investment. Here are 5 additional questions you should answer before you buy a property: 1. Are there any deed restrictions on the property you want to purchase? (Control) 2. What is crime rate in your property’s neighborhood? Are there any registered sex offenders in the neighborhood? […]

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