Chilly forecast for North Jersey home sales
This spring — traditionally the busiest time in the housing market — buyers may find they’ve got fewer choices than they’d like, because the inventory of homes on the market is down, compared with last year. In Bergen County, the number of single-family homes for sale dropped 25 percent in January and February, and in Passaic County, about 15 percent.
One big reason is that many sellers have held off because of the unusually harsh winter weather, and they’re likely to list their properties soon, which may bring a surge of properties to the market.
But other homeowners — especially those who bought during the housing boom — still can’t sell without taking a loss, and those properties are likely to stay off the market, shrinking the potential pool of available homes.
“There are still sellers waiting for the market to improve in order for them to get out,” said Jeff Adler, a Keller Williams agent in Ridgewood.
“A lot of sellers have been taken aback by the amount of decline from the peak to where the market is now,” agreed Jorge Ledesma, a Re/Max agent in Teaneck. “It’s a bitter pill to swallow when you see so much equity in your home, and through no fault of your own, you see it go away.”
Home prices in the region are still, on average, about 20 percent below their 2006 peaks, so owners who bought during the housing boom may well be “underwater” — that is, owing more on the mortgage than their home is worth. Others may not be underwater but still have 2006 prices stuck in their heads as the “real” value of their home, and are reluctant to sell for less.
As home prices rise, more of these homeowners will be willing and able to sell, observers say. With prices up statewide an estimated 4.3 percent last year, many homeowners are already moving out of the underwater category, said Jeffrey Otteau, an East Brunswick appraiser who follows home prices statewide.
“We will see more [home selling] activity as equity gets restored,” Otteau said recently at a seminar for real estate agents in East Hanover.
According to CoreLogic, a provider of real estate and financial information, about 269,216 — or 14.3 percent — of mortgage-holders in New Jersey owed more on their mortgage than the home was worth in the fourth quarter of 2013. That’s down from 381,424, or 20 percent of mortgages, that were underwater in the first quarter of 2013, CoreLogic said.
That means, of course, that many homeowners can move forward without taking a loss. Sally Kelen and Rick Herman, for example, recently got an offer on their five-bedroom Victorian, which overlooks the Celery Farm nature preserve in Allendale. They have lived there for 14 years and put the home on the market two months ago, asking $925,000.
“We love the place, and it’s kind of hard to leave,” said Herman, who produces meetings and events for corporations. “But it’s five bedrooms, way too much for two people.” And after shoveling a lot of snow this winter, he found himself asking, “Do I want to be doing this 10 years from now?”
Though home prices weren’t a factor in the couple’s decision to move, Herman said he noticed that prices have risen from two years ago, when they first discussed the idea of selling with a real estate agent.
Jessica and Ben Leto of North Haledon also benefited from rising prices when they recently sold an investment property, a two-family home in Garfield. They had bought the property in 2011 and completely renovated it, relying on Ben’s background in renovation and property maintenance as owner of BVL Property Restoration.
The sale was bumpy; two contracts fell through, and the third buyer took longer than expected to secure a mortgage. In the end, however, the couple made a 15 percent profit on the deal.
“It was a solid investment,” said Jessica Leto, a high school tennis and lacrosse coach.
Some homeowners who might want to sell and trade up to another home have held back because a tighter lending market means they can’t qualify for a new mortgage, said Ron Aiosa, a Coldwell Banker agent in Butler. That’s especially true if they lost their jobs and had to take lower-paid or part-time work during the recession, he said.
“You might not be able to get another mortgage if your income has come down,” Aiosa said.
The bad weather was a factor in many sellers’ decision to delay listing their homes, real estate agents say. Ledesma said he knows of sellers who held off because they couldn’t do exterior painting and other “curb appeal” chores during the bitter cold. Other sellers didn’t like the idea of buyers tracking snow into the home.
Robert Funabashi of Terrie O’Connor Realtors in Saddle River said that many homeowners, especially in high-priced towns, were reluctant to sell while their landscaping was covered by snow.
“If you’re going to sell, you want to put your best foot forward,” Funabashi said.
“Normally our spring market starts in March, but it’s really late this year because of the weather,” said Ellen Horowytz, an agent with Prominent Properties Sotheby’s International Realty in Franklin Lakes. “People have been waiting; they’re saying, let’s wait till things start to bloom a little bit.” She expects a surge of listings soon.
– See more at: http://www.northjersey.com/news/chilly-forecast-for-north-jersey-home-sales-1.842686#sthash.gd2p5Pp7.dpuf