CNBC reported that new housing starts are "free-falling". And that we are back to 1991 numbers as far as housing starts. Is that a problem? I think not.
Take a look at the towns around you... how many new condo's have been built in the last 10 years. Builders and contractors have been extremely busy over the past 10 years. They had to hire a lot of workers, invest in a lot of new equipment and spread themselves a bit thin. Hopefully, the experienced builders who have seen cyclical markets squirreled their excess capital for today's rainy day. We are just returning to a more normal market.
An average "middle-manager-salary" town would be Waldwick NJ. Population of about 10,000 with approximately 3200 housing unit, its own high school and comprised mostly of single family detached homes with an average sale price in 2007 of $452,828. If you look at the change from 2006's average sale of $478,387, the market has adjusted just 5.6%. Since Waldwick's average home price doubled from 1998 to 2004, the market is just stabilizing. Waldwick is located in the northwest portion of Bergen County a bedroom community located just under 1 hour outside Manhattan. (see articles at
http://www.liberty100.com/news/index.cfm )
Nationally, Real Estate values historically rise at approximately 6.4% annually. Waldwick increased 11% in 2003 and another 17% in 2004. If the market gave back 5.6% of value from 2006 to 2007, the market is just stabilizing.
What does a buyer do? Consider this:
1) There is a wonderful choice of single and two-family homes to choose from
2) Make offers that fit your budget. If the seller does not wish to negotiate... try the next property
3) Interest Rates? Look around... as of this writing, you can find a 30 year fixed rate under 6% interest with zero points.
4) Worried about a small down payment or mediocre FICO score? Take a look into the tried and true FHA programs
In the Northwest Bergen County area (Waldwick) and in 10 years from now, we will look back at this time as the bottom of the market.
"Oh boy, I wish I bought 2 houses back then!"
Thomas G. Johnson
Broker
Liberty 100 Realty
www.liberty100.com
