Moorestown, NJ

Are You In for a Trick or Treat?
Learn What Remains for Those Seeking a Home or Loan

The last weekend in October you were likely treated to a host of Halloween characters, all in search of treats, not tricks. People searching for a new home or a mortgage, whether they donned a costume or not, may have gotten a little of both.

Home loan seekers have been treated to great rates all year long since the Federal Reserve announced it would be purchasing mortgage backed securities, with rates diving below 6.00% since last December. However, if you are looking to buy a home, according to the Case-Shiller index, home prices increased for the fourth straight month, possibly signaling the end to home price declines. So, the question now is what lies ahead?

How About a Little Perspective?
Applications for home loans fell the last few weeks of October as average reported rates for a 30 year fixed rate climbed above 5.00% according to both the Mortgage Bankers Association of America and Freddie Mac. The reason most cited for the decline in applications was increasing rates. Which means that for many people a rate above 5.00% was the cause for a decline in applications.

Perhaps this could be for one of two reasons. The first could be that anyone who could refinance into a sub-5.00% rate had already done so. The second is that people could be thinking that either rates will fall below 5.00% again or that rates in the low 5.00% range are simply not that attractive.

If we were to take a look at home loan rates dating back to 1980, a span of nearly 30 years, the average monthly reported rate for a 30 Year Fixed Rate loan according to Freddie Mac was 9.07%. While the thought of a rate in the 9.0% range seems exorbitant today, today's rates were inconceivable prior to 2001...and especially in October 1981 when rates were a whopping 18.45%!

The chart below shows the average reported monthly interest rates since January 1980. This graph does not take into account the amounts paid to obtain these rates, which were as high as 2.6% in 1984, compared to 0.7% in 2009. The red line represents 7.00%, showing that rates below 7.00% were an abnormality prior to 2002.

The low rates we have seen this decade are largely attributable to the impact of the 9/11 bombing which launched global economies into a tailspin. The result was an aggressive lowering of rates from the Federal Reserve to stabilize the economy. The impact of low interest rates resulted in a rapidly and unsustainable appreciation in property values.

As property values started their return to "normal" we witnessed the plunge into our current recession. We also saw the Federal Reserve get into the mortgage backed securities (MBS) market, becoming the major buyer of MBS this year, driving rates to current and lower levels.

While rates may appear a little less attractive based on where they have been this year, do not let that cloud your judgment. Any home loan rate with a five as the first number followed by a decimal point is a fantastic rate, when all things are considered.

Just as Halloween Has Passed, So Will These Rates
In short, as the Federal Reserve begins to pull back their purchase of MBS, as was started in October, mortgage rates will rise. It is not inconceivable to believe we will see interest rates well above 6.00% at some point in 2010, in particular after March as the Fed is scheduled to wrap up its MBS purchase program on March 31, 2010. Regardless of where we have been, for those wanting a phenomenally low interest rate, acting sooner rather than later is the best decision.

Try These Numbers on for Size
For comparison sake, just to offer a little more perspective, if one were to look at borrowing $150,000 for 30 years, here are some principal and interest payments to consider. A rate of 5.25% would yield a monthly principal and interest payment of $828. The average interest rate of 9.07% since January of 1980 would yield a payment of $1,214 or nearly $400 higher. The highest interest rate of 18.45%, in effect in October 1981, would require a payment of $2,316, a whopping $1,488 a month more. Viewed from a different perspective, one could borrow $417,000 at 5.25% for $13 less a month.

Yes, admit it. We have become spoiled with the best home loan rates we have ever seen. Sure, everyone would love a 30 year fixed rate that starts with the number four. However, do not let rates off their lows deter you from making a decision that could save you thousands of dollars over the time you may have your next loan in effect.

What about Home Prices?
There is no shortage of data one can choose from to base an argument for whether or not home prices have bottomed. One thing is clear though; national data is only relevant for determining overall trends, not local realities. That said, the S&P Case-Shiller index is widely touted as an accurate assessment on both national and local levels for the areas they report on.

Indexed to 100 in January 2000, it is easy to see when home prices began their rise and how they became out of sorts with where they should have been. It's also easy to determine when home prices started their decline in mid-2006.

The chart below, showing a 20 city composite of home prices, also demonstrates what many like to point to in order to demonstrate that home prices have bottomed and are on their way to stabilization and appreciation. The last four months have each marked an increase in month over previous month comparisons; although still lower than the 12 month previous number that is often used for comparison.

The red line indicates the point that many are referencing as the bottom of home prices. Whether you are a buyer looking to take advantage of prices not seen since 2003 or a homeowner looking to refinance, this point of reference could be the trigger you need to make a decision to move forward. No one wants to pay more for a home than they could have and increasing values hopefully will make it possible for more people to rid themselves of higher priced loans.

Whether housing has made a bottom or not, first time home buyers (FTHB) have voted with their wallet, showing that home prices overall are now affordable and they have been buying en masse. Washington and the IRS, FTHBs have accounted for monthly sales volume as high as 50% or more of total sales this year.

What Now?
Whether you are looking to refinance or purchase a home, the best way to determine what you may be eligible for is to speak with a professional. They can assess your situation and help you make a decision that is in your best interest.

However, in order to make the best decision and take advantage of rates that historically will be viewed as the lowest we may see in our lifetime, sooner is better than later to pick up the phone. Regardless of what happens to home prices, we do know that interest rates are on the rise. The Federal Reserve will end their program for purchasing MBS next March putting pressure on home loan rates to rise.

Go on, pick up the phone, call your mortgage professional and say "Trick or Treat!" Sure, you might be a little late according to the holiday calendar but you just might find something to be thankful for.

Karl Peidl

Loan Officer

Pleasant Valley Home Mortgage Corp.

305 Harper Drive

Suite 3

Moorestown, NJ 08057

856-252-1200 x1224

856-252-1240 (fax)

877-296-5454 (toll free)

www.pleasantvalleyhomemortgage.com

Moorestown NJ July 2009 Homes Sales

# of Homes For Sale = 205

# of Homes Sold = 15

# of Months Supply = 13.7

Type of Market = Buyers

address	subdivision	bedrooms	bathrooms	sold_price	days on market	seller concessions
61 Foxwood Dr, Moorestown, NJ	Blason Woods	3	2.2	$547,500	97
115 Oakmont Dr, Moorestown, NJ	Laurel Creek	4	3.5	$838,000	36
610 N Lenola Rd, Moorestown, NJ	Lenola	2	1	$143,000	329	$4,850
710 Worthington Dr, Moorestown, NJ	Meadowbrook	4	2.5	$655,000	49
8 S Close, Moorestown, NJ	Moorestown Mews	3	2.5	$310,000	181
599 Devon Rd, Moorestown, NJ	None Available	4	2.5	$380,000	22
2 W Spruce Ave, Moorestown, NJ	None Available	4	2	$480,000	32
200 Laurence Dr, Moorestown, NJ	None Available	3	2.5	$505,000	115	$5,050
1444 Georgian Dr, Moorestown, NJ	North Riding	3	2.5	$455,000	131
2 Walnut Ct, Moorestown, NJ	Northwest Estates	5	2.5	$725,000	65
735 Lippincott Ave, Moorestown, NJ	Northwest Estates	4	4.5	$999,000	7
609 E 2nd St, Moorestown, NJ	Second Street Walk	4	2.5	$612,000	370
309 W Main St, Moorestown, NJ	Town Center	5	2	$469,500	31
220 E Central Ave, Moorestown, NJ	Town Center	5	2.2	$899,900	29
6 Castleton Ln, Moorestown, NJ	Wexford Estates	4	3.5	$710,000	116

Have a great day

Make This YOUR Best Year Ever

Leander McClain, Burlington /Camden County, NJ Realtor & Real Estate Consultant, Keller Williams Realty, 1814 Route 70 E Cherry Hill, NJ 08003 856-685-1677 Direct

Search NJ & PA Home Listings @ www.NJSouthRealEstate.com

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GOODBYE CIRCUIT CITY

 

As you may have heard, Circuit City is going out of business.  My clients in Burlington County, New Jersey have asked me  many questions about this closure (I guess I am the local circuit city expert??).  Anyway, here is some information that I found that may answer some of the most common questions regarding the closure.

Have a great day and 

Make This Your Best Year Ever

 

Leander McClain, Burlington Township Realtor & Real Estate Consultant, EXIT Buyers Plus Realty, 15 E. Broad Street, Burlington, NJ 08016 609-505-6578(cell)  

 

 

Will Circuit City stores continue to accept Circuit City GIFT CARDS?

• Yes, customers holding Circuit City gift cards may redeem them at full

value at our stores during the liquidation sales. Once the stores are

closed and the company is out of business, the gift cards will have no

value.

Are Circuit City’s EXTENDED WARRANTIES affected by the liquidation?

• No. Circuit City Advantage Protection Plans® (extended warranties) have

been backed by third-party independent companies for more than 15

years and as a result, are not impacted by Circuit City’s closing.

• Currently, all Circuit City Advantage Protection Plans are fully backed by

the Assurant Solutions companies. Assurant Solutions operates as

Federal Warranty Service Corporation, Sureway, Inc., and United Service

Protection, Inc. Assurant Solutions is part of Assurant, Inc. (NYSE: AIZ),

and its extended service contacts are backed by an Assurant insurance

subsidiary rated A “Excellent” by A.M. Best Co.

• Because they are backed by third-party company Circuit City Advantage

Protection Plans WILL be available on products purchased during Circuit

City’s liquidation sales.

What number do I call about my Circuit City Advantage Protection Plans®

(extended warranty)?

• If you have questions about your TV (in-home) or appliance coverage, call

1-800-878-1167.

• If you have questions about your coverage for computers, computerrelated

products, small/portable electronics, and carry-in products, call 1-

800-555-4615.

• If you have questions about coverage purchased in Puerto Rico, call 1-

877-311-0611.

Who do I call if I have questions about the status of Circuit City Rebates?

• You can check the status of your Circuit City Rebate at the following Web

site: https://www.ccityrebates.com/promocenter/circuitcity/index.jsp

• Please note that manufacturers' rebates are the responsibility of the

various manufacturers.

What payment types will be accepted at the liquidation stores?

• Stores in liquidation will accept cash, Circuit City gift cards, Circuit City

Rewards Certificates, and most credit cards. Personal checks will not be

accepted. All sales are final.

How much will merchandise be marked down, and can customers negotiate

prices for the merchandise?

• There will be clearance pricing, but specific discounts are not being

announced. All sale prices are at the discretion of the liquidator. Prices

are non-negotiable and all adjustments must be approved by the

liquidator’s on-site managers.

 

Do customers who hold Circuit City-branded credit cards need to pay off

their balances immediately? Can they just stop making payments now that

Circuit City is in liquidation?

• Customers should continue to follow the current payment terms /APR that

they’re currently operating under. Circuit City’s credit card program is

administered by Chase and customers will continue their credit

relationship and repayment of their obligations with Chase.

Will Chase close-out or transfer accounts for Circuit City-branded credit

cards?

• This is a Chase decision since they own the credit card relationship with

the customer and Chase is not going out of business. If there are

modifications to the card type, then Chase would notify the card holder.

Customers with a Circuit City Rewards Visa can still use their card at any

company that honors VISA.

• No new Circuit City-branded credit cards will be issued and no new reward

points will accrue from a Circuit City purchase.

Will Circuit City stores in liquidation stores accept Circuit City-branded

credit cards for purchases? If not, why not?

• No, Circuit City-branded cards will not be accepted in the liquidation stores

because we are not offering promotional financing or rewards in the

liquidation stores and we want to avoid any customer confusion.

Can I use my Circuit City Rewards Certificates?

• Circuit City Rewards Certificates will be accepted during the liquidation

sales. Just bring your Circuit City Rewards Certificate to your local store,

and the points will be redeemed for credit toward a purchase.

So, the financing offers spelled out in your national newspaper circulars on

Sunday, January 18, 2009 will not be honored?

• That’s correct. Those ads were printed weeks before the Bankruptcy

Court approved Circuit City’s liquidation on January 16 and were in the

circulation pipeline before the hearing. The liquidation order supersedes

any other business the company had in the works, including advertised

promotions.

• Circuit City will cease marketing and advertising immediately. Any

marketing for the liquidation sales will be the responsibility of the

liquidators.

Will Circuit City’s price matching policy or the One Price PromiseSM apply

during the liquidation sale?

• Because the liquidation company is in charge of the sales at the closing

stores, their policies are in force. So, One Price Promise does not apply

during liquidation events, nor does the company’s Unbeatable Price

Guarantee. All sales are final.

What about returns and refunds?

• Customers can return products they purchased prior to January 16 for a

14-day period for exchange or refunds. All other terms of return policy are

in force.

• When closing sales begin, on or around January 17, 2009, all sales will be

final.

• For products covered under the Manufacturer’s Warranty, customers

should call the manufacturer.

 

Will delivery service be available for products purchased from liquidation

stores?

• No.

Will Circuit City offer home theater installations during the closing sale?

• No.

Will Circuit City offer PC services and repairs at liquidation stores during

the closing sale?

• Services already underway at the liquidation stores will be completed

promptly, but no additional jobs will be accepted at these stores.

Will car electronics installations be available at liquidation stores during

the closing sale?

• Yes, Circuit City will continue to offer car electronics installation during the

closing sale.

What if a customer purchased products at one of the closing stores and the

product needs service?

• For products covered under the Manufacturer’s Warranty, customers

should call the manufacturer.

• For products covered under Circuit City Advantage®, guests can call the

toll-free number that is printed on the bottom of the product receipt.

 

Here’s the Moorestown Real Estate market update for October 2008.  Pended units for October were down 8 and Sold units were flat compared to October 2007; listed units were down 18 versus 2007.  This has led to a current inventory of 197 units.  Moorestown has been averaging 16 units sold per month which means there is currently 12 months worth of inventory in Moorestown. This trails the overall Burlington County market, which has 10 months worth of inventory. Year to date listed units are down 56 (a 13% decrease), pended units are down 23 (a 13% decrease) and sold units are down 34 (a 21% decrease).  See how this compares to the Burlington County Market.

Over the last 3 years the average number of units pended and sold in October was approximately 17 & 16 respectively.  This October, there were 8 pended and 12 sold. The average Days on Market for the year is 103.

What does all this mean?  If you are thinking of buying or selling right now it’s important that you seek the advice of a full time professional realtor who can best advise you as to how to take advantage of this market. 

The chart below provides you with the 10/2007-10/2008 numbers for listed, pended and sold units. 

Below is a chart that shows the average list price and average sold price for Moorestown from 10/2007-10/2008.  The average sold price is down 22% from October 2007 ($538,728) to October 2008 ($471,595).

 

If you are thinking of selling or buying in the near future, please don't hesitate to contact me directly at 856-222-5829. Or you may always visit me on line for tons of useful tips and ideas at no cost or obligation to you. I look forward to helping you reach your Real Estate goals.

 

*Market statistics as of 11/17/2008.