Insight from Jim Weichert
The beginning of a new year is always a time to reflect and consider goals and opportunities for the year ahead. As we begin 2012, there are many reasons for encouragement when it comes to the economy and real estate. If recent economic and real estate trends are any indication, 2012 will be a year when good things can happen not only for potential homebuyers and sellers, but for the country as a whole. For example:
Existing-home sales rose again in November, and remain at levels above those of a year ago. What’s more, pending home sales also continued to gain in November, reaching the highest level in 19 months, an indication that there will be more future sales.
In November, sales of new single-family houses rose 1.6 percent from October and were 9.8 percent above November 2010. Additionally, housing starts surged to a one-and-a-half year high in November, and permits for future construction were the highest since March 2010.
In a sign that the overall economy is strengthening, U.S. employment has grown solidly for the past six months, generating 100,000 jobs or more in each month for the first time since April 2006.
The Conference Board’s Index of Leading Economic Indicators showed two months of solid gains, signaling that the economy was gaining momentum and the risks of a recession were receding, and its Consumer Confidence Index improved to levels seen in April 2011.
Basking Ridge Market Activity
Three closings so far this year:
2 Commonwealth Drive, 2 bedroom Fairfax model in Spring Ridge, listed for $248,000 and sold for $232,500.
72 Gerard Avenue, 4 bedroom bi-level, listed for $549,000 and sold for $540,000 in only 36 days.
380 Potomac Drive, 2 bedroom Essex model in Spring Ridge, listed for $289,000 and sold for $275,000 in only SIXTEEN days!
Twenty-one new listings – three condos, four townhouses, a bi-level, a tudor and twelve colonials. Many of these homes were listed last year, came off the market for the holidays and are now back on the market.
There have been eight contract sales since the first of the year – actually, only seven. 11 Archgate Road was logged into the MLS once it was already under contract (it is scheduled to close at the end of the month).
What happens first, what can wait for what? Appraisals, inspections, second deposits, oh my!!
Here’s how it goes: you make an offer, accompanied by a $1000 good faith initial deposit. Your Realtor will likely hold this check until the offer is negotiated and you will get it back if the deal doesn’t get agreed on. Your Realtor cannot hold a check for more than five days – so if it takes longer than that to negotiate, it might be deposited into the escrow account and will be returned to you if the purchase agreement is not executed.
Negotiate the contract, sign the contract.
You have three days to get the executed contract to an attorney in order to start attorney review. The duration of attorney review varies based on the availability of all parties to discuss the contract, make and agree to changes.
Once attorney review is completed you will schedule the inspection and apply for your mortgage. These two things happen concurrently. This is an important point to make – you cannot wait for the inspection contingency to be satisfied before you apply for your loan. This means that you can’t hold off on ordering the appraisal either. If you wait too long to order the appraisal because you don’t want to spend the money you run the risk of missing your mortgage commitment date because you can’t predict what sort of issues might come up and you need to leave time to resolve them. Losing the money you spent on the appraisal is a risk you have to take in order to continue the process in good faith.
Your second deposit will also likely be due before the inspection contingency is cleared – you can’t wait to write that check; you have to write it when it’s due; you will receive your deposit monies back if the deal falls apart over inspection items (as long as your contract allows for that).
I have had two deals in the last two months that almost fell apart because the buyers held off on making their deposit and ordering their appraisal until they were confident that inspection issues were resolved. In one case we were having issues with repair requests – tempers were flaring and both parties were upset with the way things were going…having held back on the deposit led the sellers to believe that the buyers were not serious about the transaction and in turn that made them not want to work on the repairs… In the other scenario, the buyers didn’t want to spend the money on the appraisal until they had resolution on some of the inspection issues (which, by the way, ended up being non-issues, but that’s for another post). Unfortunately, their appraisal came back with a glitch that in ten years neither I nor the buyers agent had ever encountered before! More than likely this glitch will be resolved but as a result it is holding the sellers up from making their next purchase. If the appraisal had been ordered when it was supposed to be, there would have been plenty of time to resolve this issue.
Keep your deal on track…. it’s the right thing to do.
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Many people think that next to the winter holidays, the summer is the worst time to sell a home. I have to disagree! Just this weekend - a holiday weekend - I negotiated a contract on a Society Hill townhouse, fielded a call from another agent looking for comp information as she was negotiating a contract, and my partner Gerry and I both showed homes. There is a definite market out there. In fact since June 20th, there have been 14 contract sales in Basking Ridge.
A few years ago, I wrote about selling your home in the summer months - now I have some additional tips for you:
Summertime means barbecues, outdoor fun and lots of sunshine, flowers and greenery. The commonality among all of those rites of summer is that they draw attention to a home's landscaping and outdoor spaces. Homeowners who are selling their home in the summer months should make an effort to highlight their home's usable outdoor space.
In addition, sellers with their home on the market during the summer should keep these considerations in mind:
These tips will help ensure that as potential buyers are considering their options, your home will outshine the competition!
Good Luck and have a safe and happy Fourth of July!
There are several things going on in my Basking Ridge Real Estate world that I thought I would share.
Moving sale at 11 Archgate Road in Basking Ridge
Friday, 6/24 from 9am - 2pm and Saturday, 6/25 from 9am - 12pm. Priced to Sell. Loads of kids toys, clothes, games and books. Household items, furniture, storage, etc. Too much to list. Take Lyons Road to 11 Archgate Road.
Featured Open Houses
22 Lyons Place from 1:00-5:00 on Sunday, 6/26. The list price on this home was just reduced from $519,000 - a great opportunity for a first time home buyer or someone looking to renovate, remodel or build on what is almost an exact acre in the heart of Basking Ridge.
258 Alexandria Way from 1:00-4:00 on Suday, 6/26. This open house is still tentative - watch the internet for confirmation. A Greenbriar model in Spring Ridge, this unit features a newly finished basement, newer windows, hardwood floors, new carpet and a gas stove.
Loan limits
On September 30, the cost of a mortgage could rise significantly as Congress is consiering lowering the mortgage loan limits for FHA and GSEs. Currently, in Somerset County the FHA loan limit is $729,750 but it is proposed to be reduced to $625,500. This will add a hurdle for even well qualified buyers by reducing affordability. This is not something we need now, not as our markets are just starting to level off. The real estate community is working hard to keep mortgages affordable - campaigning to keep the current loan limits.
Basking Ridge Real Estate - information for you
If you are considering moving into or out of Basking Ridge, this might be the best time to do so! Get your house on the market and SOLD before the loan limits change. Summer typically is a slow time, however, the last few offers I have written were presented in competitive bid situations - there ARE buyers out there and I can help you find them for your Basking Ridge home.
Search homes for sale in Basking Ridge or get your home's value in today's Basking Ridge market.
Four closed sales in Basking Ridge this week
Current inventory is 138 properties, absorption rate is 5.75 months.
Township residents received their notices of property tax assessment for 2011 at the end of January. Neither the multiple listing system or the Vital Services website have been updated yet so I am reaching out to some past customers for their numbers. Stay tuned for a blog post featuring some examples. Of the handful of people I have already spoken to 2011 assessments are higher than the 2010 assessments. Land assessments went down and building assessments when up. I am not sure if the townhouses are any different, once I have more data I will post it.
No obligations, just information. Basking Ridge resident with almost ten years of real estate experience. I cover all of the Somerset Hills, into Morris, Hunterdon and Union Counties.
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