Bergen County Housing to be weaker in the Fall of 2011? Can’t be!

 
According to a report by RISMedia on June 17, 2011, the NAHB is predicting that the cost of credit will increase. Beginning October 1, 2011 there will be a decrease in the GSE-Government Sponsored Enterprises such as Fannie Mae and Freddie Mac (Freddie?) or any loans insured by the FHA. This means that there will be tighter conditions for credit requiring higher down payments and higher interest rates.


Okay so the simple question is, how does this affect us in Bergen County? NAHB’s analysis of this will “…affect 204 counties, containing 1.38 million owner-occupied homes in the affected price ranges.” These affected price ranges and 204 counties affect 27% of the homes in the nation.

How does this affect Bergen County? While we are in a bad situation, it affects everyone, including Bergen County Home sales tremendously. While the County has remained stable in pricing, on average as compared to the rest of the state, it means nothing. Prices have not stabilized as yet. Realty Trac has stated that they expect prices to stabilize by the end of 2011 and then we can start moving forward.

Foreclosures are going to be released into the market shortly as all of the problems have finally been resolved here in New Jersey. This makes matters worse even worser (  :-)  ). Our friends at Realty Trac have confirmed that New Jersey is the worst state when it comes to litigating these foreclosures. That’s one reason, it will be harder than it should be or should have been. It can take 900 days to finalize a foreclosure in New Jersey

What this really means is that our government, you know the ones we elected, don’t get it. They are ignorant. Ignorant to the fact that the housing market, that is real estate and the purchase and sale thereof, makes the world go round! When will they start doing something that will help rather than tightening up restrictions, they should be figuring out what will help rather than hurt. How about get the bums out Washington and put some of these high priced executives and politicians in jail for getting fat over the last 10- years. Let’s get businessmen to run the country rather than pontificators. They broke the law, but we don’t see any of these people going to jail. Madoff went to jail, big deal!

Oh, I forgot, they gave us the tax credit thing last year. That hurt us more than helped us. How, you ask? Simple, it accelerated the buying decisions for the year of home buyers as well as incentivized sellers to sell faster than they normally would have. The effect was that the majority of home purchases happened before and in the first 2 quarters of 2010. No more homes were sold in 2010 because of the tax credit-NONE. It cost us, the taxpayers, a LARGE fortune.

Hey Washington, wake up and use the education your parents paid for!

Short Sale vs. Foreclosure in Bergen County?

 
You make the call!


I get the question from people all the time all around Bergen County, New Jersey: short sale or foreclosure, which is the better option? My knee-jerk reaction is always “Are you kidding? Short sale, of course!” This has been mostly because I was always under the impression that a short sale, although still a ding on your credit, was gentler on the score than a foreclosure.

But according to a recent blog post by FICO Banking Analytics, there is no real difference in the affect a short sale or a foreclosure has on your credit score. Both the impact in points and the time to fully recover is about the same for both events.

This put me in a precarious situation. All this time I had lauded the short sale as vastly superior to foreclosure, largely because of its less adverse affects on credit. So I was forced to do further research into which was the better option. In doing so I learned about benefits of a short sale I wasn’t even aware of, and found that the FICO blog was way off.

Each borrower’s credit situation is different, and the way that a creditor reports a short sale to bureaus is different. The reality is that hundreds of thousands of distressed homeowners who have chosen a short sale have experienced a lesser impact on their credit than those who have chosen foreclosure.

In a short sale, a distressed homeowner may be able to obtain another mortgage sooner than someone who has a foreclosure on his or her record. Also, more and more employers pull credit before hiring a potential employee, and a foreclosure can keep you from getting a job. Some employers pull credit reports on existing employees, and a foreclosure may not bode well in certain industries.



These benefits stacked against the negatives of foreclosure, including the embarrassment of public announcement and literally being kicked out of your home, make, in my opinion, short sale the reigning champion.

Now you make the call!

Bergen County Real Estate and what is going on in May, 2011

 
When it comes to Bergen County real estate, I ask everyone if they really care.  I know I care.  The ones that really understand what is going on in the economy, care!
Here is the thing:  When the politicians, worldwide, not just in the United States, finally figure out that housing makes the world go 'round, then life will be so much easier economically.  They just don't get it.
It just seems to me that the government officials just don't get it.  With this Dodd-Frank bill including the "Qualified Residential Mortgage" I want to say ARE YOU KDDING ME?
A lot of people will say I'm nuts for saying it's a bad thing.  Well think about it this way:  Not many people like the designated hitter in baseball, but now that it's here and has been here for so long, you ain't never getting rid of it.  It is to much ingrained in our baseball society, from little league on up to MLB.
Okay, so change the qualifications and make it tougher to get a mortgage.  I agree.  Everyone should have good credit, money and a job in order to buy a house.  Don't make such drastic changes.  The Dodd-Frank overhaul is like taking 10 steps back in what some are calling an economic recovery.
These two need to actually do some research rather than reading their own headlines and stay away from the mirror.
As far as Bergren County real estate is concerned, here is the latest information that has been compiled.  It is my monthly Bergen County market update:  http://budurl.com/j9ld