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Westfield Foreclosures? A Sign Of The Times.

Foreclosures continue to be a problem in New Jersey. According to Realty Trac (the nation’s leading source for foreclosure data and information) NJ was ranked #11 nationally in terms of foreclosure activity for the month of July. Right here in Union County, we have more than our fair share. But many of us think the issue is contained to the urban towns on the eastern and western ends of the county.

And increasingly, they’d be wrong.

Are the more affluent communities like Westfield immune from the county’s foreclosure epidemic? Unfortunately, the answer is no. While the number of mortgage defaults is relatively low compared to other hot spots in the county, new defaults in Westfield have risen in recent months.

What’s going on? And more importantly, what should distressed homeowners do?

Westfield Mortgage Delinquencies & Foreclosure – Getting Perspective

It’s important to step back and understand that when the media talks about “foreclosures’, they are often talking about 2 different things: 1) actual foreclosed properties, and 2) mortgage delinquencies. Recent estimates are that nationally, 1 out of every 7 households with a mortgage is either in some stage of foreclosure, or delinquent with the mortgage payment.

*Pause* Think about that number for a moment…it’s staggering. If you left your house today and drove down the street until you came to the 7th house, how long would it take? That’s the size of the problem nationally.

The government likes to focus on how their programs are reducing the total number of actual foreclosures. And while that’s a good thing, the number of homeowners falling behind on their mortgage is going up.

The graphic below shows that here in Union County (#2 behind only Essex Co. for the most foreclosures in NJ), we have a higher level of foreclosure activity than exists on either the national or state level. I don’t know how you feel about it, but to me, that’s kind of a big deal.

The next graphic shows the towns in Union County where the foreclosure activity is heaviest. And when you look at it, something startling is beginning to happen. Westfield, which has been trending upward each month in terms of new foreclosure activity, has now broken into the “top 10″ for the heaviest foreclosure activity in the county. Granted, the numbers are on a dramatically different scale than in some of the other towns. But it’s a trend that’s moving in the wrong direction.

Why Westfield you ask? As I talk to those neighbors facing foreclosure, as well as attorneys and other professionals dealing with this issue locally, I end up with the same conclusion: “It’s The Economy, Stupid!”

Sure…there has been the occasional case of someone who purchased a house beyond their means with an exotic mortgage product that blew up in their face. But more often, I’ve heard stories about good people who have experienced unemployment, underemployment, or an unexpected health issue. (And occasionally, all 3.) These crises have seriously challenged people’s ability to pay their mortgages on time.

But unlike some of the towns on the list with higher levels of foreclosure activity, many Westfielders had resources that carried them through…until now. At some point resources run out, and things begin to slip out of control.

If You Or Someone You Know Is Facing Foreclosure, Get Help.

The most important thing to understand if you or someone you care about is facing foreclosure is that time is of the essence. There are a wide range of options to help ranging from mortgage modification, to short sale. Not every solution requires selling your home… in fact, many don’t. But regardless of which solution you chose, they ALL take time end expertise. And once you’ve received a mortgage delinquency notice, the clock is running.

Feel free to visit another foreclosure prevention blog that I write to find resources that can help. Or, call me directly (908-216-4836). I’m one of the few broker/agents in this market that has the specific training and experience needed to get through these kinds of challenging situations.

But whatever you do, don’t just stick your head in the sand and hope things get better on their own. They usually don’t…

Tags: Foreclosure, Mortgage Delinquency, Westfield

Westfield NJ Homes For Sale – Life After Tax Credit

Did you hear the sound? You know…the “thud” that occurred in May, and then echoed throughout June?  It was the sound of the local housing market falling on its face as the home buyer’s tax credits expired. But for those who had Westfield NJ homes for sale, the market remained stable. Well…only for those that were priced properly!

Westfield NJ Homes For Sale: It’s STILL All About Price!

As an active real estate broker, I had my concerns that the home buyer’s incentive could be creating a “bubble” in the local housing market. Many in the industry worried that the credit might not actually stimulate as many new buyers as hoped, but rather move the existing buyers into an earlier buying decision. If that was the case, then buying activity could exceed recent trends prior to the phasing out of the credit, and then drop off dramatically afterward.

So what actually happened?

The charts below show the homes placed under contract from January through June. The first is Union County, and the second is Westfield, NJ. Pay close attention to the yellow line in both graphs (which represents 2010). Notice how pending sales exceeds 2008 & 2009 in through the spring. But when the Home Buyer Tax Credit expired on April 30th? Ouch!

The Westfield market took a while to get going this spring (again, the yellow line), but by March, it exceeded both 2008 & 2009 in terms of pending sales. But the elimination of the buyer incentive was felt here as well, as pending sales fell below previous levels in May & June.

So what does PRICE have to do with anything?

As I mentioned in a previous post, homes that come to market priced properly (with the original list price within 5% of the final sale price) sell faster, and for a higher percentage of their original last price. So which homes went under contract AFTER the tax credit expired? Those that were priced properly!

Take a look at these two graphics. They represent the 22 Westfield listings that went under contract AFTER April 30th AND closed by the time of this posting. The first chart shows the homes that came to market priced RIGHT (original price within 5% of the final sale price). The average return was a whopping 99.39%. For those who priced too high out of the gate, the return was only 85.7%

And what about time on market? Those that were right priced sold in an average of 15 days. And those that came on too high and needed to have a price adjustment? The average here was 98 days on market.

So what is the take away here?

At first blush, it looks like the home buyer tax credit DID move buyers into an earlier decision, rather than stimulate additional buying activity. (We’ll need a few more months of data to know for sure.) But if this IS the case, then the pool of available buyers could be smaller than usual in the upcoming months.

Sellers MUST understand that PRICE is critical. This is NOT the time to “test the market” with an inflated price. Buyers know value when they see it.  As this data proves once again, if you come to market with no more than a 5% cushion for negotiation, you’ll sell faster and retain your price. If you ask for too much, the market will wait for you to get it right.

And if the buyer pool is smaller for the remainder of the year, you could be waiting a LONG time!

Tags: Westfield NJ Homes For Sale

Why I Became A Short Sale Specialist.

Despite signs that the economy continues to grow (albeit slowly), foreclosures continue to rise in New Jersey. In fact, right here in Union County, foreclosure notice have nearly doubled over the past 3 months.  I think we can all agree that this is a very troubling statistic. The current US housing market and financial crisis has caused enormous stress and heartache throughout our area. And the end result is that some very good people…maybe people you know… are facing the very real possibility of losing their home.

Maybe it’s my social work background, but I just couldn’t feel good about being a real estate broker without doing what I could to help. That’s why I took the time to earn the Certified Distressed Property Expert (CDPE) designation, and why I’m focusing an increasing part of my efforts reaching out to distressed homeowners.

Foreclosure Avoidance IS Often Possible.

What many people fail to recognize is that in many instances, foreclosure avoidance IS possible. But it requires 3 things:

1. Put Your Ego Away.
   • The biggest reason why people lose their house through foreclosure us that they bury their heads in the sand. Embarrassment is a major reason for this… I get that. Many decent, smart and hard working people can get foreclosed due to hardships beyond their control. But time is not your friend when facing foreclosure. The sooner you can get put your ego in check, the better.
2. Reach Out For Professional Help.
   • The fact remains that nearly 70% of all foreclosures nationally occur without any visible intervention from a real estate professional. It doesn’t have to be that way. As one of the very few agents in our market with specialized training to handle distressed properties, I know the proper resources to get you help! Sometimes, the most important first call is to your lender. If you qualify for a mortgage modification, they would MUCH prefer it over a foreclosure. Lenders report that on average, the foreclosure of a $200,000 home can cost them between $70,000 -$100,000.
   • Sometimes, a foreclosure avoidance counselor is the right person to call. They have the training and knowledge to help you explore your best options.
   • Whichever is best for you, feel free to give me a call and I’ll point you in the right direction.
3. Be PERSISTENT.
   • This may be the hardest part. Emotions run high, and these systems move slowly. Be persistent. Keep a record of your interactions with the date, time and name of the contact person you talk to at EVERY STEP along the way. I promise…you’ll need to reference it at some point in the future.

The goal of every Certified Distressed Property Expert is to help keep people in their homes. But sometimes, selling the home and avoiding foreclosure is the best option. Too frequently, people are afraid that because they owe more than their home is currently worth, there is nothing they can do. NOTHING could be farther from the truth!

A properly executed Short Sale (selling for less than is owed and having the bank absorb the loss) can be one of the best ways to avoid foreclosure. But they are difficult and time consuming. They are a part of this business that most agents avoid like the plague. Unless you really know what you’re doing, it’s virtually impossible to have success.

As an experienced real estate broker, I have SIGNIFICANT experience in this area. And now as a Certified Distressed Property Expert, I have even more knowledge and expertise to help you achieve the best possible outcome.

So if you or someone you know is worried about losing your home, give me a call. Together we can start to explore solutions!

Tags: Avoiding Foreclosure, Distressed Property

New Jersey Foreclosures – In The Nation’s Top 10.

New Jersey foreclosures are on the rise. Back in March I wrote a piece looking at the impact of foreclosures on your property value. What I was seeing then were New Jersey foreclosures well below national level (we were 39th out of 50 states in foreclosure notice filings at the time). But I shared my concern about their growing numbers, and speculated on what it could mean.

Last week Realty Trac (the nation’s leading source on foreclosures information) released their May 2010 foreclosure report. The report cited a month-over-month decline in national foreclosure filings, and was generally optimistic. But the devil is in the details…

New Jersey Foreclosures Break Into National Top 10.

The report shows that 10 states account for 70% of all the nation’s foreclosure notice filings. But as the tide seems to be stemming across the nation, New Jersey foreclosure notices are not keeping pace. This report shows NJ landing in the Realty Trac Top 10 for the first time that I can recall. (There are lots of reasons for this, which go beyond what I want to cover here today.)

Right here in Union County, some towns are seeing a DRAMATIC increase in default notices. Take a look at this chart showing the increase in foreclosure notice filings reported by Realty Trac between February 2010 (the data used in my previously cited post) and today:

Surprised? I have to say that despite seeing this trend coming, I was taken aback at just how quickly the change occurred. And look at the towns that are seeing the largest increase. Probably not what you expected, right?

Help For Those Facing Foreclosure

Keep in mind that receiving a default notice does NOT necessarily mean that you’ll lose your house. Good people find themselves in this situation for lots of reasons. A severe reduction in income through job loss or an unexpected health crisis are among the most common reasons why people fall behind. The most important thing to do is put your ego aside, and TAKE ACTION while there is time!

The US Department of Housing and Urban Development is one of the best starting places for those looking for foreclosure help. Here you’ll find strategies for avoiding foreclosure, options for refinancing, and ideas about what to do if foreclosure seems inevitable. Believe me…I’d much prefer to see people keep their homes and sell them on their own terms! But as a full service real estate broker, I can help you explore your options if selling seems to be the best course of action. I have the knowledge and experience to help you sell your house…even if you’re underwater and need to sell short.

Remember…taking action is the most important step. I’ve seen reports that show nearly 70% of all foreclosed homeowners never reached out for help! Don’t make that mistake. I can be reached most easily by calling the cell at 908-216-4836.

Tags: New Jersey Foreclosures, Union County Foreclosures

REFINANCE NOW!! Why These Mortgage Rates Won’t Last.

World geo-political events have wreaked havoc on wall street in recent days. But what you might have missed is that this has caused mortgage rates to fall to record lows. TODAY would be a good time to call your lender about refinancing!!!

Investor Emotions Push Mortgage Interest Rates Lower

As I’ve said before, mortgage interest rates are NOT set by the government. They are market driven. And financial markets are emotional creatures. Sometimes the markets are driven by predictable events, like the government’s release of existing home sale data or other such numbers. But as mortgage expert Dan Green points out in this post, the market has been hammered with a bunch of unexpected events lately. From volcanic  eruptions in Iceland to tensions between North and South Korea, the world has become a very unpredictable place. Oh yeah…and can anyone say GREECE?!

Hey…I know I said that mortgage interest rates would rise back in April. But these unexpected world events are keeping rates unnaturally low!  Hey… who knew?!

The end result is that the world’s investors are diving for cover, and it translates into lower mortgage rates for you! According to Bankrate.com, rates at the time of this posting were under 4.9%!! (Keep in mind that I’m talking about conforming 30-year fixed mortgages…not some weird specialty product). 

But the chaos won’t last forever. And when it subsides, rates will drift upwards. They always do…

So if you live in and around Westfield and you’re considering refinancing (and hello…it might be a good idea), TODAY would be a great time to call your favorite lender for a quote. If you need a recommendation for someone good, call me and I’ll pass along a few names. I can be reached at 908-216-4836.

Tags: interest rates, mortgage

HELP! There’s Lead Paint In My House!!

One of the things that attracts so many people to our community is the lovely older homes. Many were built around the turn of the century, and some even earlier. We decided to purchase our Westfield home (built in 1927) because we love its character and architectural style.  But trust me…when your home is this old, one thing is certain: repairs and renovations!

EPA Issues New Lead Paint Renovation Compliance Rules

If your home was built prior to 1978, chances are pretty good that they used lead paint somewhere. It was in this year that there was ban placed on using leaded paint, because of the damaging health effects on children. (In New Jersey, if you purchase a home built in or before this year, you’ll need to sign a lead paint disclosure form acknowledging the risks.)

Since the ban on lead paint was put into effect, the number of children poisoned by the dangerous metal as declined significantly. But the EPA still estimates that a millions (with an “M”) children are still impacted annually. And that’s waaayyyy too many!

When we think of homes that present a lead paint hazard, we often think of decaying urban structures with peeling paint and falling walls. And while these do present a problem, that’s not the whole picture. Re-modeling and renovation projects to upscale suburban homes can also present a significant risk.

Remember…the danger is in disturbing the lead paint and sending the dust into the air where it can be inhaled.

To address these risks, the EPA has now issued new rules for re-modeling projects. These rules went into effect on April 22, 2010. These rules don’t apply to individual homeowners doing minor repairs. But if you’re paying someone to do the  job, your contractor will need to be properly certified to do the job safely. Failure to comply with these rules will lead to big fines, and possible health risks to you and your family.

To learn more about what these rules say and how they might impact you and your re-modeling project, check out this video. Or, feel free to give me a call with any questions.

 

 

Tags: EPA, lead paint, remodeling

Online Agent Reviews: Would You Use Them? Should Agents Be Afraid?

It’s well know throughout the real estate industry that despite all of our marketing efforts, the most common way that a client finds a Realtor is through a personal recommendation. When asked how they found their agent in a recent NJAR survey, buyers cited ”referred by a friend” 3 times more often than the second most popular choices (and there was a tie here)  ”used in a previous transaction” and “internet website”.  

Those agents fortunate enough to have “raving fans” find that their business grows steadily through word of mouth referral. But sometimes, people are moving to a new area where they don’t know anyone. And sometimes they don’t know who to ask. Then who do you do?

Online Real Estate Agent Review Sites

We live in a world of online reviews. Whether you’re buying a new car, a BBQ grill or even a book for your weekend reading, there are scores of places online where you can learn what others are saying about that product. Increasingly, sites like Angie’s List and Yelp! are gaining momentum, and consumers are sharing their experiences with contractors and businesses.

But the real estate community has been reluctant to engage…

Let me clarify…there are already sites like Incredible Agents and Rate My Agent which exist to provide just the service I’m describing. But a quick search shows that most agents aren’t registered. And those that are have almost no reviews. Why?

And the Houston Association of Realtors is introducing a controversial new application designed to provide information for the consumer about agent productivity. Now that’s a level of transparency that I’ve not seen in the industry before!

I’ve spoken to many agents who are afraid of these online review sites. They worry that if a transaction goes bad, a disgruntled client could trash them online. And we all know that once your reputation gets hammered online, it can create a firestorm! (Just ask the folks at DELL about how this post by Jeff Jarvis changed their entire business plan). And consumers tell me that they worry about sites like this being “gamed”, with bogus testimonials singing the praises of a lousy agent. 

My personal opinion is one that welcomes the idea of online agent reviews. I think this is increasingly the way that consumers look for information about products and services. Today’s agents need to be OK with this level of transparency. Yes…there could be a bad review posted on occasion…real estate transactions can be complicated, emotional endeavors. But on balance, I have to believe that the good reviews should outnumber the bad.

So I put the question to you the real estate consumer: If agent reviews were readily accessible online, would you use them? Should agents be afraid? I’d love to know your thoughs on this…

Tags: Agent reviews

Honey, I Shrunk The House.

Home Sizes Decrease As Boomers Enter Retirement Age

The average American home size has been decreasing in recent years. The reason? More boomers are retiring and don’t need the extra space. Check out this month’s National Market Report from Keller Williams for details.

Tags: Baby boomers, Home sizes

The House I’m Buying Just Exploded! What Happens Next?!

Imagine this: You’re days away from closing on the purchase of your new home. Then, the unthinkable happens. Utility workers hit a gas line in the yard, and the house explodes!!

Well for one unfortunate home buyer in our area, that’s exactly what happened this week. The picture on the left is all that remains of the home being purchased by Gilberto Estupinan.

The good news is that there were no serious injuries. But the question several of my friends asked me is: What happens next? Does he still have to buy the house?!

Buying A Home and Risk Of Loss

The short answer is probably not.  Now let me be clear…I’m NOT a lawyer. Heck, I don’t even play one on TV. But I can give you a loose “broker’s interpretation” of contract law as I understand it.

When buyers and sellers enter into a binding contract, the buyer establishes what’s known as equitable title in the home. That is…they have an ownership interest in the property, but haven’t taken possession until closing. And since they have an ownership interest, they assume the risk and rewards that come with owning the property.That would be really cool if they found a diamond mine or struck oil on the land. But if you’re Mr. Estupinan in our situation above, it could really stink!

Risk Of Loss Is On The Seller

If you’re working with a Realtor or a good real estate attorney, you’ll probably be covered. The standard NJ real estate contract redirects the risk of loss back to the seller. Section #15 of the standard contract reads as follows:

“The risk of loss or damage to the property by fire or otherwise, except ordinary wear and tear, is on the seller until closing.”

So the simple rule of thumb is this: Until you get the keys at the closing table, you’re probably not at risk for a loss like this. (Oh and BTW…this is why your lender requires proof of insurance before they let you walk out of the closing!) 

Just pray that lightning doesn’t strike on the way home! 

Tags: buying a home, equitable title, risk of loss, selling a home

Mortgage Rates On The Rise

As expected, mortgage rates are on the rise this week. (Hey, I never like to say ” I told you so“, but…umm…) The average rate on a 30-year loan has jumped from about 5 percent to more than 5.3 percent in the past few days. As mortgages get more expensive, more would-be homeowners are priced out of the market. As a result, many homebuyers are now scrambling.

Mortgage Rates Are NOT Set By The Fed

It’s important to understand that contrary to popular belief, mortgage interest rates are not set by the Federal Reserve. When the big kahunas meet in Washington they typically tinker with things like the Federal Funds Rate…the rate that banks charge each other to borrow money overnight. Mortgage rates however, are set by the price of mortgage-backed securities. And recently, the Federal Government…biggest buyer for these products… stopped buying.

That left rates nowhere to go but up.

Mortgage Rates Are Like A Roller Coaster

Dan Green (one of my all time favorite mortgage guys and author of The Daily Mortgage Report has taken the actual rates of the Fannie Mae 5% bond and plotted it as a roller coaster ride. The true-to-life mapping represents the rate changes during the period from 5/08 – 3/10 when the Fed was buying mortgage backed securities, and keeping mortgage rates artificially low.  Come along for the ride, but I’ll warn you…bring your Dramamine!

The Take Away… If you’re in the housing market as a buyer OR a seller, mortgage rates have a huge impact on how things will turn out. If you want to know how today’s rates will impact your ability to buy or sell in this market, give me a call.

Tags: Federal Reserve, interest rates, mortgage