NJ Leads National Recovery in Home Sales

Along with being number one in blueberry and eggplant production, highway off ramps, and property taxes, New Jersey has now outpaced the rest of the U.S. in sales of homes. According to the National Association of Realtors, New Jersey was one of only three states that showed positive growth in sales volume from the fourth quarter of 2009 to the first quarter of 2010.
New Jersey’s growth in homes sales bucked both the national trend, where sales growth diminished by 14 percent, and the Northeast regional trend, where sales volume dipped by 17.7 percent. The quarterly growth in real estate sales in New Jersey, at 6.8 percent, was the best growth in the nation among high-volume states and was second among all states in the nation, exceeded only by Wyoming.

In a recent Op Ed for The Bergen Record, Jarrod Grasso, CEO of the NJ Association of Realtors cites several reasons for the Garden State's attraction to homebuyers including: the firming up of New Jersey's local markets, and the support for tourism and transportation not to mention proximity to the major markets of New York and Philadelphia.

The nationwide data show that the volume of existing home sales in New Jersey has increased in each of the last four quarters. The Garden State is one of only two states that can boast of this positive trend. Confidence in the market is high, home prices are both reasonable and appropriate, and mortgages are affordable and available.

Is it Cheaper to Leave NJ or Stay?

Prevailing wisdom insists that increasing taxes on New Jersey's 16,000 millionaires will cause an irreversible exodus along with the loss thousands of potential jobs in the companies they run. However records appear to indicate otherwise.
Actual tax return data from the New Jersey Department of the Treasury confirm that the number of tax returns with incomes of $500,000 and above has been growing. The current recession may tell a different story in more recent years, but in 2007 (the most recent data available), 48,500 tax returns were filed with incomes of $500,000 or more. This is nearly twice the number (25,500) filed in 2002.
In fact, it seems to be the middle class that is most sensitive to tax pressures, as demonstrated in this video by TheStar Ledger's Brian Donohue. Scroll down for the reader comments that follow,

The Take Away About Walking Away

More and more Americans are walking away from their mortgage obligations. A report released by Morgan Stanley indicated that more homeowners are defaulting on their mortgages even though they can afford to pay the loans. According to the New-York based global financial services giant, around 12% of the total number of mortgage defaults in February were “strategic,” up from only 4% in mid-2007.

The report stated that homeowners are more likely to default on their mortgages the higher their credit scores and the larger their loans. It notes that strategic defaults rise based more on how much more borrowers owe in housing debt than the price of their homes.

Industry experts have warned that borrowers who default on their mortgage pose a big risk to the housing market. Morgan Stanley’s report, however, acknowledged the efforts by the Obama administration to address the issue of rising mortgage defaults. The federal government’s policy change “gives us hope that policymakers are serious about curbing future strategic defaults,” the report said, referring to Washington’s plan to amend its anti-foreclosure program to encourage cuts to borrowers’ principal amounts, instead of just the payments they make. As many as 12 million foreclosures will hit the housing market over the next few years if lenders fail to effectively adjust borrowers’ debt.

How Solar Leasing Can Put Free Solar Panels on Your Roof

In the 4 years since we've started this blog, we've covered several exciting developments in solar technology that have made it more efficient and accessible to homeowners. Yesterday, at Essex County's Earth Day fair we checked out Milburn based Geoscape Solar's intriguing new concept. It's goal is to dramatically expand solar's accessibility and affordability to millions of homeowners. Geoscape Solar’s new leasing program requires no upfront payment - consumers only pay a monthly fee that is lower than the utility cost of the electricity produced by the solar system. The leasing program was created offer homeowners an affordable way to go solar, save money and make a positive impact on the environment. At the Earth Day exhibit, I keyed in my home address and saw my rooftop clearly displayed on Geoscape's computer screen. Calculating the size, pitch and exposure of our roof, our home may be worth considering for a lease arrangement. The catch? Geoscape gets the profits from selling your solar energy back to PSE&G. In return you save 25% off your electricity bills.

Solar energy systems are an investment in one’s home or business – one that provides immediate and ongoing benefits in energy savings and cash income, creating a better environment for families and communities. The company estimates that an average system will save homeowners more than $10,000 over the 15-year lease period. Studies show that the value of your home increases $20 for every $1 per year saved on electricity. Panels will actually extend the life of a roof since they protect it from the elements.

Spring Cleanup at Clarks Pond Today, 11 -2

Perfect weather to meet your neighbors and help make Bloomfield's Jewel on The Third River sparkle. More info on our Greenway Blog.

Keeping Up and Down With FEMA

Living in a Federally declared disaster zone can have benefits that extend beyond those directly affected by the recent flooding. Taxpayers who live or operate businesses in counties designated as federal disaster areas will have certain IRS deadlines postponed until May 11, including the April 15 deadline for filing individual income tax returns, making income tax payments and making 2009 contributions to an individual retirement account. In New Jersey, Atlantic, Bergen, Cape May, Essex, Gloucester, Mercer, Middlesex, Monmouth, Morris, Passaic, Somerset and Union counties were declared federal disaster areas.

On the other hand,home buyers and sellers trying to close a home sale thugs month are facing unexpected hurdles. FEMA has informed mortgage company servicers that "Any appraisal with an inspection date of 3/29 or prior will require re-inspection by the original appraiser and contain the following wording: "...I certify that the inspection revealed no physical damage to the property OR neighborhood…"
If that weren't frustrating enough, all properties under contract in Flood Areas still require flood insurance that can't be bought until Congress extends that provision in yet another bill that was delayed until after their Easter Break.

In Case You Were Looking for Good News ...

...Standard and Poors Case-Shiller reports that their home price index is improving comparing January 2010 to December 2009. S&P reports that their ten city composite is almost unchanged from where it was 12 months ago (which is a heck of a lot better than a decline). Home prices are trending up in most cities despite a national average 2.5% dip.
On the other hand, it also revealed the sobering fact that 25% of home loan holders are under water. No fooling.

Overdue Bailout for Unemployed Homeowners

The administration unveiled major expansions to its foreclosure prevention plan Friday – expansions designed to help underwater and unemployed homeowners and push it closer to meeting President Obama’s goal of helping 3 to 4 million borrowers save their homes.
Treasury Assistant Secretary Herbert M. Allison pointed out “nature of this housing crisis has changed over the past year,” from a subprime crisis to problems stemming from unemployment and negative equity. Allison says these new program adjustments will give mortgage servicers and originators the flexibility they need to assist “responsible homeowners who have been affected by the economic crisis through no fault of their own.” Faith Schwartz, executive director of the HOPE NOW industry alliance, called the announcement “an important step forward for homeowners, who will now have more options to retain homeownership.” According to ABC News, to qualify for this program, out-of-work homeowners must be eligible for HAMP and be receiving unemployment benefits. The monthly payment would be no more than 30 percent of the homeowner’s unemployment benefits.
To expand the use of principal write-downs as part of the Home Affordable Modification Program (HAMP), participating servicers will be required to consider an “Alternative Modification Waterfall” in their evaluations, which includes writing down some principal for loans that are over 115 percent of the current value of the property (LTV). This alternative modification approach will include incentive payments for each dollar of principal write-down by servicers and investors.

Bailing Out Main Street. What's Up With B of A?

Bank of America is introducing a program to offer homeowners who owe significantly more than their homes are worth the opportunity to have their loan balances reduced. The program, which starts in May, would potentially help about 45,000 homeowners nationwide. In launching the effort, Bank of America is jumping into the debate about how to address millions of homeowners whose mortgages exceed the value of their homes and who have complicated government efforts to reduce foreclosures. The B of A plan is limited in scope. Borrowers must have missed at least two mortgage payments and be significantly underwater to qualify, owing 20 to 30 percent more than their homes are worth. It is also limited to borrowers with certain types of risky loans, including subprime mortgages or other loans with a two-year adjustable rate.
Bank of America expects to forgive about $3 billion in principal on loans as part of the program. The effort expands a settlement agreement that the bank made in 2008 with several states to modify thousands of mortgages. So what happens now? Homeowners who up till now has managed to make all their payments in time, learn that they don't qualify precisely BECAUSE they made all their payments on time. Wonder how long will that $3B goal will last...

The Big Bailout off Main St.

Our Century 21 Office is just up Main Street from the worst of March Madness in Little Falls. Down Main, at the lowest level in the Signac section, is where hundreds of residents have been forced out for most of the past week. Over the years a tight community has developed among flood prone residents that has resulted in an increasingly active online forum. A couple of posts say a lot about how they are coping:

I am also hoping it misses the 1st floor because that is a whole lot more damage to deal with. I think in 1984 it just missed by a few inches. It also depends where you are on the street, every house is different. Some houses sit in dips along the street. Some of my neighbors only a couple of houses away are a lot higher than me. Unfortunately, it's very hard to say how high it will go in each house. Good Luck!! (Monday 11:49AM)
Three times in 5 years is just ridiculous!!!

Basic clean-up steps involved.... #8 03/15/10 12:41 PM

This is a very basic list and clean-up can be very involved, but just so you have an understanding of what the basics are:
1. When flood levels drop low enough the town will turn on the pumps again. Once the pumps are turned on the water drops rapidly and you can usually go back to the house within hours.
2. Once home, take lots of pictures of the damage. Call your flood insurance right away and notify them that you are going to start removing materials. They should not have any objections and will ask you to take pictures.
3. Next start ripping out 4' high of drywall, insulation and carpeting. The insurance company usually covers materials up to 4' high. If the water level went beyond that speak to your insurance. While you are doing this, ask someone to go out and get plenty of bleach. The Red Cross usually comes around with some, but you are going to use a lot. Also, if you don't have a dehumidifier, go out and get one now.
4. If you have a powerwasher, use it to wash the crawls space, studs, etc. I know it seems crazy to be spraying water when you just got rid of it, but since everything is already soaked you might as well get it cleaned right. The water is sometimes muddy and you don't want that stuff sticking around. This is also a good time to start making calls to your plumber and HVAC to have your furnace fixed or replaced.
5. Mix bleach and water in a big spray can (the big pump kind), ventilate the area really well and spray everything down. I usually do this 3 times over a two day period.
6. Next you want to start drying everything out with dehumidifiers and fans.
7. If the water made it to the air ducts you are also going to want to call someone in to clean them out.
Hope this helps a bit. To answer you question, you usually can move in right after your utilities are back up and running. March is too cold to be living with now heat and hot water.

House Logic

Houselogic.com is one of the newest of the dozens of homeowner oriented web sites, yet it is one of the few that requires no registration or password to access nearly all of its resources. It also covers perhaps the widest range of subject matter. Whether you are a homeowner or an aspiring homeowner, this site can help resolve any problem that comes to mind -- from financing and taxes to maintenance, repairs, and improvements.
Sponsored by our own National Association of Realtors, it's stated mission is to "help you become the best, most responsible homeowner you aspire to be, we want to provide you with free information and tools you can use to make smart and timely decisions about your home."

The Ultimate Solution for Housing Market?

Fred Glick is an outspoken realist for the mortgage and real estate world who has appeared on CNBC and NPR's Marketplace. His latest idea could help steady the shaky real estate market AND create thousands of new longer term jobs.
The downward pressure on housing prices is largely due to the rising tide of lower priced foreclosures. The main purchasers of these foreclosures are investors with cash -- not the buyer who needs a home. He is rarely able to get a mortgage for such distressed properties. The buyer usually ends up paying a retail price after the investor flips it.
Why not let the government have these properties fixed up to standards that an owner occupant can finance properly before moving in? This would provide jobs for the construction trades that are hurting and recoup the "bailout", with interest, when the home closes. Fred's bottom line:
 "We gave people jobs, we moved property faster and for more money, we added to the number of mortgages in the system with quality property that made mortgage backed security investors happy and to top it off, we stimulated an economy with the taxpayers making money"

Maybe the Fed Should Listen to Fred.

Greener Gadgets for the Home

For four years, the Greener Gadgets Conference has explored sustainable alternatives for the electronics we use in our homes and workplace every day. It has served as a forum for discussing green technology solutions for communication, poverty and education across the globe. Examining eco-friendly products and energy efficient gear, the conference shows off the best ideas from designers worldwide. Each year seems to produce the ultimate in useful innovations. Participants are invited to vote online for their favorites.
The 2010 event, held February 25 in NYC, offered ideas for an entire green lifestyle beginning in the home. The winning design from India(above) was The Go Mechanical Charger)

Digging Out

Our latest Snowmagedden brought back memories of one of the earliest comic books I can remember reading. Little Lulu was a plain Jane ageless pre-teen with a thimble-hat, whose parents were rarely seen or heard, but had countless humorous encounters with her boy friend, Tubby, brother Alvin and her curious puppy.
For this snow-deprived California born lad, her most memorable adventure was digging out of her home alone after a blizzard that left drifts above the roof line. My comic book collection is long gone, but Google brought the circa 1950 story back to life. Loved the fact that she could dig a tunnel for blocks that beelined to the front door of her favorite soda fountain. Holsteins here I come!
(click on images to enlarge)

Housing Affordability at Near Record Level

(photo of Levittown model home)
The typical American family, who makes the nation’s median income of $64,000 a year, could afford to buy 70.8% of all homes sold in the United States during the last three months of 2009. By comparison, only 55% were affordable in the second quarter of 2008.
The National Association of Home Builders judges a home to be affordable if a family making the median income could devote no more than 28% of their take-home pay toward housing costs.
There was a huge variation in affordability around the nation. All five of the most affordable major housing markets were in the Rust Belt, led by Indianapolis, which has been the nation’s most affordable major metro area for more than four years. More than 95% of all home sold there were classed as within the budget. Detroit was the second most affordable major market with 93.4%. The least affordable city? New York, at 20%.

Homeowners Renting Out Rooms to Avoid Foreclosure

Economic setbacks are forcing increasing numbers of people to reevaluate where and how they live. In addition to former homeowners becoming renters, those who cannot afford their mortgage payments have decided to rent out rooms in their homes to make ends meet. A recent story in The San Jose Mercury News suggests that we are now becoming a nation of “sharers,” as homeowners continue to take in tenants to pay their mortgages. Some may even take in multiple tenants although many towns have restrictions on "Rooming House" zoning. College towns tend to be more tolerant of such setups. My cousin paid off the mortgage on his modest 3BR Palo Alto Ranch home by taking in as many as eight Stanford students at a time for over 30 years.

Snowpocolipse in a Warming World

Dr.Jeff Masters puts it in context in his Wunderblog post: It’s not hard at all to get temperatures cold enough for snow in a world experiencing global warming. According to the Intergovernmental Panel on Climate Change. the globe warmed 0.74°C (1.3°F) over the past 100 years. There will still be colder than average winters in a world that is experiencing warming, with plenty of opportunities for snow. The more difficult ingredient for producing a record snowstorm is the requirement of near-record levels of moisture. Global warming theory predicts that global precipitation will increase, and that heavy precipitation events—the ones most likely to cause flash flooding—will also increase. This occurs because as the climate warms, evaporation of moisture from the oceans increases, resulting in more water vapor in the air.

Open House on Orange St.

Had an interesting encounter with a gent with a different approach to open houses. He's not licensed as a Realtor, but apparently gets paid to snag passers by(like me) who he sees pausing in front of these condo steps -- from the relative warmth of his minivan a couple of houses away. He then shares info about the units and gets a fee from management for showing them. We discussed the sluggish condo market in Bloomfield and he reported that half the 14 units are still unsold after over two years on the market.

Meanwhile, several blocks away on Montgomery Street, sits another just completed block of a dozen townhouses with no sign of life on a Sunday afternoon. They're asking about 100k more. Their 339k unit is the highest priced in Bloomfield. It has been on the market for 443 days. For yet another 100K you can move up to the Brookdale section of Bloomfield where Bloomfield's last woodland forest has been clear cut in half to make way for a much larger development of 42 townhouses.

I've written earlier about my discussion with the aforementioned Liongate developer who seemed unaware of the declining market for condos and townhouses in town. He seems to have had a reality check since the only development to the site in the past year has been a growing pond of stagnant rainwater. Developers continue to be attracted to Bloomfield's proximity to the high end gloss of Montclair and express RR and Bus service to NYC. Commuters are just starting to appreciate the advantages of Bloomfield, but not so much the advantages of condo living.

Top 5 Home Improvements Updated

HomeGain.com, one of the first websites to offer Web-based free instant home values, has released the results of its nationwide home improvement and home staging Home Sale Maximizer survey.

HomeGain’s recent survey shows the top do-it-yourself home improvements that Realtors recommend to home sellers. According to their survey, the top five home improvements that Realtors recommend to home sellers based on cost and return on investment (from highest to lowest ROI) are:

1. Cleaning and de-cluttering ($200 cost / $1,700 price increase = 872% ROI)
2. Home staging ($300 cost /$1,780 price increase = 586% ROI)
3. Lightening and brightening ($230 cost / $1,300 price increase = 572% ROI)
4. Landscaping ($320 cost /$1,500 price increase = 473% ROI)
5. Repairing plumbing ($385 cost /$1,250 price increase = 327% ROI)

Cleaning and de-cluttering continues to rank as the top suggested home improvement recommended by 98% of Realtors, costing less than $200 and returning a value of nearly $1,700 to the home’s sale price, or an 872% return on investment.

“Many Realtors agree, especially in a buyer’s market, that sellers who make these recommended home improvements often get their homes sold faster and at higher prices,” stated Louis Cammarosano, General Manager at HomeGain. “We have customized our Home Sale Maximizer online home improvement tool to help identify and prioritize the projects that can increase the salability and selling price of a home.”

LEEDing the way in Bloomfield

The Leadership in Energy and Environmental Design (LEED) Green Building Rating System™ encourages and accelerates global adoption of sustainable green building and development practices. LEED is a third-party certification program and the nationally accepted benchmark for the design, construction and operation of high performance green buildings. LEED for Homes is a rating system that promotes the design and construction of high-performance green homes. Green homes use less energy, water and natural resources, create less waste, and are more durable and comfortable for occupants.

One enterprising Bloomfielder we know has spent the last year turning his recently acquired home into the first LEED Platinum home in NJ. We recently photographed the Innards before the drywall was installed. The home includes a geothermal heating and cooling system, energy efficient lighting and plumbing, closed cell foam insulation, zero-VOC paints, sustainable materials, and much more. Tomorrow we tour the nearly completed home. Stay tuned.