Jeremy Gryvatz

This New York Times Article is amazing. Did you ever hear of the shadow inventory. Apparemtly NJ has the largest such inventory in the nation, with over 40 months worth of homes to be sold that havent even hit the market yet. This article also talks about how this looming foreclosure inventory is ruing the party for us all!

Thanks to the writer, Antoinette Martin of The New York Times.

NEW statistics provide a glum holiday-time snapshot of the real estate market: shrunken sales pace, bloated inventory and a "shadow inventory" of foreclosed homes looming menacingly in the background.

Right now, according to one report, New Jersey has the largest shadow inventory in the country: 41 months' worth of homes to sell - and they aren't even on the market yet.

The foreclosure process is complete on these nearly 98,000 homes; a National Association of Realtors committee made the state-by-state count. But the banks or other lenders have not yet released them for sale.

"Some are occupied, and in the eviction process," said Bill Flagg of ERA Queen City Realty, a foreclosure sale specialist whose clients include Fannie Mae and Freddie Mac, the government-backed federal lenders. During the foreclosure process, he said, "the former owners were not pushed toward eviction while they were attempting a loan modification through a government program." (One result is that some former homeowners have lived free of monthly payments for two years or more.)

Even among houses that have been vacated, Mr. Flagg said, very few sales have gone ahead for the last two months. Fannie Mae, Freddie Mac and lenders put a hold on them during the flurry of legal challenges nationwide to alleged "robo-signing" of foreclosure documents, and other malfeasance imputed to foreclosure officials.

Fannie and Freddie recently indicated that they would release the hold on most of the properties they own through foreclosure.

Mr. Flagg said that the shadow inventory would "explode" onto the market in the next few months and that he was making plans to add staff members to handle business when that happened.

Jeffrey G. Otteau, the market analyst who heads the Otteau Valuation Group in East Brunswick, also foresees a gusher of foreclosed properties, possibly even a "royal market mess" that may not dissipate for years. Mr. Otteau's company issues monthly reports and sponsors seminars to brief real estate professionals on trends - at this time "mostly pretty brutal" trends, he said.

According to his most recent report, 67,800 houses on the market in October had remained unsold for a month or longer. That was 10 percent more than in October 2009; concurrently, there were 9 percent fewer sales than in 2009.

Mr. Otteau tied the downward motion directly to the loss of jobs in the state - an average 3,900 per month this year, while the country over all was adding 87,000 jobs monthly.

He performed his own calculation aimed at estimating the size of the foreclosure inventory that shadows the market's future:

"In the first 10 months of 2010," he said, "there were 9,318 completed foreclosures, which is only 0.41 percent of all homeowner households in the state.

"But there were a total of 51,119 mortgage delinquencies - the start of the foreclosure process. The difference between the two figures is 41,801 homes, which works out to be 1.83 percent of all owned homes." Mr. Otteau said that not all of those houses would come on the market at one time. He also said the gap, as a percentage, was more than twice as big in California as in New Jersey. But California has a more dynamic economy, creating new jobs that will ultimately lead to more home purchases.

"In New Jersey," he said, "if something does not happen to change the job situation, it is going to take a lot longer to burn off inventory backlog."

Certain areas already have almost impossibly large numbers of homes going begging for buyers, according to the latest numbers from the Otteau Group. In East Greenwich, a Gloucester County town that seemed to grow up almost overnight during the boom building years, there is now an eight-year inventory. There was one sale in October, with 96 homes on the market.

Gloucester County has an overall inventory of almost two years.

"I try to be the joker and keep spirits up in the office," said Joanna Papadaniil, an agent at Prudential Fox and Roach Realtors in nearby Woolwich. "As an agent, I don't want to disintegrate any sense of hope that's left. But the truth is, it's pretty bad down here."

Ms. Papadaniil said she used to sell numerous large new houses for $500,000 and up. But average prices in her area have fallen by 30 percent in the last three years or so; short sales and foreclosures predominate, and many formerly high-priced condominiums are being rented to people who have lost their homes to foreclosure.

More northerly, more urban parts of New Jersey are in less dire straits, according to the analysis of contracts signed on multiple listed properties.

The overall inventory for Hudson County was down to 13.3 months in October, from 15.1 in September. Contract sales stayed up at roughly 200 a month; the number of new listings was flat.

But in certain areas of Jersey City, and in Union City, there was unsold inventory of 17 months.

In Essex County, the town of Livingston, which had a sizzling market in April - only two months of inventory - had built up a 6.6 months' supply. Millburn (which contains the highly affluent Short Hills section) had a good month in October; inventory fell to 4.7 months from 6.3.

But in Newark - also in Essex, and the state's largest city - the backlog swelled to 26.3 months, or more than two years, from 14 months. In October, 420 houses had been on the market for a month or longer, and there were only 16 sales.

This is a great read. I came across this article which talks about two young professionals from Freehold New Jersey who left the life of the suburbs for something more trendy. The decision was made easy because the two were able to now work from home. Please read the article and pass it along..

Courtesy of the NYTimes.com Written by Joyce Cohen..

UNTIL last winter Puneet and Shelly Tandon were living in central New Jersey, just about equidistant from their offices. They paid $1,800 a month for a two-bedroom rental at the Avalon apartments in Freehold, and Mr. Tandon headed southwest to work, while Mrs. Tandon went northeast.

Mr. Tandon, 32, had a 75-mile trip to a town on the other side of Philadelphia to his job as a product manager for a consulting firm, and the drive became a habit. He knew, "every day, what's going on with N.P.R."

Mrs. Tandon, 29, a medical scientist who works with doctors who conduct clinical trials on H.I.V. medications, had an equally tiresome travel situation. Three times a week she headed either to New England or upstate New York, traveling by car, train or plane. The rest of the time she worked from home.

Last winter they were able to ease the burden. Mr. Tandon received permission to work mostly from home, so the couple decided to find a rental on the Hudson waterfront, nearer a transportation hub, to make Mrs. Tandon's commuting days easier.

They were glad to leave suburban central New Jersey for a more urban setting. "We are city people," Mr. Tandon said. "We were willing to pay a premium for living close to a city or in a city. We understood it comes with a price tag."

Renting suited them fine. At some point, after the arrival of children, they expected to "move to the suburbs and buy a place there just like everyone else," Mr. Tandon said.

The couple found a place that pleased them at the Peninsula at City Place, a condominium on the waterfront in Edgewater, N.J., about four miles from the George Washington Bridge. For a two-bedroom there with 1,300 square feet, including ample closets, the rent was $2,900.

But the building offered two free months on a 14-month lease, making the rent effectively $2,486. And the parking situation, with unlimited space at no extra cost, was ideal.

Storage space is important to the Tandons. They were married three and a half years ago in New Delhi, India, in a traditional Punjabi wedding that lasted four days. They needed space for their many wedding gifts - mostly kitchenware and appliances - as well as clothing. "When you get married, you get a lot of Indian clothes," Mrs. Tandon said, "so you have another wardrobe of Indian outfits. It just sits in the suitcase and I don't get to wear it, which is kind of sad."

After their 2009 move, the couple often worked in close quarters, which revealed two different schools of thought as far as home offices go.

Mrs. Tandon, who has a doctorate in pharmacy from the University of Maryland, made the guest room into her office, filling it with papers, school notes and pharmacy texts.

"Is she ever going to look at it?" Mr. Tandon asked. "But she gets emotionally attached to things. She is very organized and everything has to be noted down. She will have calendar entries for everything."

Mr. Tandon, who has a master's degree in computer science from the Rochester Institute of Technology, set up shop in the master bedroom. His philosophy is more spartan: "Toss, toss, toss. Everything is within my laptop or P.D.A."

Mrs. Tandon said: "Puneet's office has a lamp, a phone and his laptop. Period."

The couple knew their rent would rise after the lease expired, but they had many months before they would need to think about rerenting at a higher rate, moving or buying. Then, last summer, they received a wake-up call. They were notified that two potential buyers were interested in seeing their apartment. According to their lease, if the unit sold, they had 60 days to vacate.

"That whole thing made me queasy in the stomach," Mrs. Tandon said. "What if they like it as much as we do? I started cleaning because: Oh! Someone is coming to my place and I need to make it look good! Puneet is: Why are you doing it? You don't want them to like it!"

Alarmed, they began to hunt for a place to buy where they could settle for a longer stay. They wanted a relatively new home that would need little maintenance. "I am not at all handy and cannot do anything in the house except changing bulbs," Mr. Tandon said. He was willing to pay up to $650,000. Mrs. Tandon's goal was to keep the monthly outlay the same as the rent without sacrificing space, which would translate into a price closer to $400,000.

"Our concept of buying was a house in the suburbs with stairs and a huge backyard," Mrs. Tandon said. So that's what they went looking for.

They wanted to stay along the Hudson waterfront, where "we have friends, we know the roads, we know the area," Mr. Tandon said. "Everyone has their favorite setup in any given place, and we had all that." Besides, for Mrs. Tandon the travel situation from their new location was "working out to be great."

The closest they came to their suburban-house concept were town-house-style duplexes and triplexes at Bulls Ferry at Port Imperial in Guttenberg, N.J. The setup struck them as a happy medium between apartment-style living and "a house house feeling," Mr. Tandon said.

Condominiums there, built in the late 1990s, were available in their price range. But the couple were deterred by the high property taxes.

They liked the interiors at Independence Harbor in Edgewater, a 14-building condo complex completed in 2002, that included some duplex layouts. But the architectural style - especially the textured facade - was not to their taste.

Something else didn't sit right. The sellers were often couples with young children, moving because they needed more space. The Tandons felt that they were looking at themselves in the future.

"Four years from now, we will be in the same boat," Mr. Tandon said. They were reluctant to spend in the $600,000s for a place they would need to leave relatively soon.

"I don't want to put that kind of investment down," Mrs. Tandon said. "I would do that in a bigger place where I am going to be there for 20 years."

Only then did it dawn on them: they needn't keep looking. They could buy the place they were already renting, which was listed at $465,000, well within their budget.

"It was anxiety because we've never bought a place - what do we do?" Mrs. Tandon said. "Why didn't we think of that before?" They began to fear that if they didn't move quickly, their place would be snatched from under them.

The building went up in 2003 as corporate rental housing. Its conversion to condos began in 2007, and 136 of the 201 units have sold, said Sheena Guido, a sales associate for the Marketing Directors, the company handling the building's sales.

Their place "was working fine for us," Mr. Tandon said. There was no reason to "invest $150,000 more in a property just for a little bigger space when all we need is this. Would we love a bigger place? Yes. Would we love being on the water and having a full-blown view of Manhattan? Yes. But are we happy with what we have? Yes."

The Tandons bought the apartment late last summer for $435,000. The common charge is less than $700 a month, with taxes of $5,500 a year. Their monthly outlay is just $10 more than when they rented.

They still find themselves surprised that their first purchase was an apartment-style condominium and not a house with stairs and a yard. That will come when the time is right, they now say.

On the one hand, owning provides them with a sense of satisfaction, Mr. Tandon said. "We have more peace of mind that we don't have to vacate."

On the other hand, ownership is a big responsibility. "If something goes wrong," Mrs. Tandon said, "we get worried about it now."

Divorce is usually a painful and over extended issue and further complicated when real estate becomes a factor.

Divorce rates are always at their highest levels and most owners who are in the divorce process suffer because the house may not be worth the note.

I found this amazingly local article where an agent from Colts Neck New Jersey shares her experience while trying to broker a sale where divorcing parties are involved.

Article written by Sarah Portlock of The Star Ledger.

Sarah Bandy always knows something is up when she helps a couple try to sell their home, but hears back from only one spouse.

"They don’t tell us in the beginning," said Bandy, a real estate agent who brokers deals for luxury homes in Colts Neck. But lately, when she presents clients with a home valuation report, the answer is almost always, "Oh, we can’t do that. It’s too low."

"Then they end up confessing, especially the wife," Bandy said.

The couple is divorcing, and they need to get rid of the house. But today’s housing market has reversed what once was a hallmark of divorce settlements — who gets to keep the house. Now, the home might be worth less than its mortgage, and there are no guarantees it will sell in the near future, much less for a profit.

Couples then are left with a series of unforeseen puzzles — who takes on the financial responsibility, how to split any possible debt and at what point it makes sense to move on.

"This has become one of the prime issues that I’m dealing with," said Robert Kornitzer, a matrimonial attorney in Hackensack. "I don’t want to say it’s slowly developed. It’s hit us with a sledgehammer."

One day this fall, two of the three cases Kornitzer mediated involved houses worth less than what was owed. Later, an adversary in court told him their case was the only one of six that morning that didn’t involve such debt problems.

Divorce rates have risen only 2 percent since 2006, according to state data. But Bandy said 30 percent of her clients are now either divorced or heading that way, and are struggling to sell their home and quickly find a new, affordable one.

Lawyers today also are forced to wear many hats — financial adviser, real estate agent, career counselor, therapist.

"It’s devastating for us as divorce attorneys because there are no real answers for people," said Vikki Ziegler, a family lawyer in Roseland.

Each blip in the economy has vast ramifications for how a couple will structure its settlement. Lawyers now maneuver deflated retirement accounts and how to set alimony when one spouse has been laid off. But the housing market’s effect on divorce proceedings has surprised even veteran attorneys.

"It makes it more difficult to settle a divorce case," said North Brunswick-based matrimonial attorney Len Busch. And Busch said the more a couple squabbles over these details, the more legal fees rack up and the process slows.

Lawyers said they have had to develop a more focused approach in an economy that, according to real estate valuator Jeffrey Otteau, has seen the inventory of unsold homes in New Jersey climb 10 percent from last year.

"There are so many additional decisions you have to make now," Busch said. "You can’t just say, ‘Let’s split up the assets and we’ll have a decent life.’ It can take a lot of sacrifice on one person’s part for the sake of the kids."

For those who decide to sell, it’s a daunting task for people trying to split up. Do they keep the house now and try selling it next year? If they wait, will its value go up or down? Can they rely on a short sale? What happens if they just stop paying the mortgage? Is one spouse willing to buy out the other, own the home and assume all risk? There is no obvious solution.

"It’s a gamble," Kornitzer said. And, he added, "it makes it harder to make decisions because of the uncertainty."

TETHERED TOGETHER

In particularly dire situations, a "substantial majority" of Kornitzer’s clients have opted to live under the same roof during divorce proceedings to save money on extra rent.

Ziegler has seen the same trend.

"Most people are not [renting] unless it’s a dire emergency, or they just can’t live together anymore," she said.

Others stay put even after the process is finalized, but before the house sells — a decision judges frown on for fear of possible domestic violence. Pressure and stress from financial and emotional concerns can escalate fights and introduce new ones.

Michael Diamond, the presiding family court judge in Passaic County until he retired in October, recalled a woman who called and asked if she could move back into the house several months after the divorce was finalized. He allowed it, but warned her to be aware of the risks, find ways to minimize frayed nerves and make arrangements to lead separate lives.

"I don’t know how they do it," Diamond said. "You say, ‘Well, how do you stay in the same house?’ Their answer is, ‘We have no choice. We can’t afford to get out.’ "

Tensions can get high, and Diamond said he warned couples to be careful.

"They have to understand that because of the tension, and if there’s a substantial dislike of each other, they have to be prepared not to get in a domestic violence situation," he said.

The prospect of losing everything scares some of Bandy’s clients, who choose to stay together once they realize how challenging the alternative might be.

"Then I see the other side where they don’t care, they’re leaving, they want to be happy and they will deal with the consequences later," Bandy said.

"It’s just sad."

In New Jersey, a landlord cannot evict a tenant without first obtaining a court ruling. In certain instances, despite evidence provided by the landlord, the tennent may recieve up to six months to find another suitable living arrangement.

Landlords are handcuffed in certain instances such as a property conversion where there are current tenants of senior status. These tenants however need to have things working in their favor such as a certain income and at least two years rentership prior to the proposed conversion.

This may seem unfair but it works both ways. Both parties have rights and must follow rules as per what can and cannot be enforced. If the landlord refuses to sustain the property as habitable by humans, then the tenant is within their right to post a claim of constructive eviction. In this case, the the renter can stop making payments and move out of the unit before filing the complaint.

Conversely, if its the renter who fails to meet his or her obligations then the landlord can sue for actual possesion, to reclaim complete possesion of the property.

Here are some of the possible viable reasons for justified eviction of tenant by a land lord in New Jersey

NON PAYMENT OF RENT

DISORDERLY CONDUCT

DAMAGE TO PROPERTY

CONTINUED LEASE VIOLATIONS

Know that if you are either the owner or renter in these situations, it is wise to seek advisement from a credible attorney who perhaps specializes in this kind of real estate law.

There are millions of underground oil tanks buried on residential properties in the United States.

Although commonly found on such commercial proerties as gas stations and auto shops, the problem exists also on some plants, treatment facilities, and all types of manufacturing factories.

Some tanks are still in use today but for most residential units the tank has been forgotten or "forgotten." This neglect allows for the substanse contained in the tank do spill out onto the grounds and soil surrounding the house as well as other neighboring properties.

As agents we need to be extremely aware of these tanks to protect not only our buyers and sellers, but ourselves as well. Disclosure issues are common when it comes to underground oil tanks and sellers are reluctant because often time for a sale to go through, the Department of Environmental Protection must determine what level of remediation, if any, is needed.

This remediation can be extremely costly depending on the amount of damage caused, sometimes requiring an entire structure to be raised from its foundation to allow for proper cleanup. Government has imposed sanctions on homeowners in these situations because the spilled oil can affect wildlife and our locoal water supply. Here are the aspects of oil tanks that government watches:

Installation

Maintainance

Corrosion prevention

Overspill prevention

Monitoring and Record Keeping

Personally I have been involved on either side of transaction dealing with oil tank issues on several occaisions. At times there has been little problem the vast majority of the time, they will "find" something at least that needs to be remediated.

Its imperative that we educate our buyers and sellers about the possibility of such an occurrence and how it may hold up a deal for long periods of time ruin it all together.

Be careful of these situations but like I said, Underground oil tanks need special attention but aren't always a deal breaker.