Kristof Tabor

12/18/2008 Clifton, NJ

“Are we at the bottom of the Real Estate market at this point in time?” and “How much lower can the prices of homes in Clifton, NJ go?” are probably the two questions that I hear the most from both the buyers and the sellers. My answer is “I do not know”. We all know that there are some models out there showing the prices declining another 10% or even 20% from today. There is also some anecdotal evidence that the market is bottoming at this point. I think the buyers are beginning to see the advantage of buying something now when they compare the rental cost to the purchase cost in our area.

Case in point: I just had a price reduction on a three bedroom Cape Cod in the Albion section of Clifton. See the listing here http://clifton-nj.com/55PlochRd/index.htm. The price was reduced by $15,000 from $289,900 to $275,000. After about a week after the reduction we had five offers on the table. Five offers in this market isn’t this something!

After that, I ran the numbers for a purchase of this home with 20% down ($55,000 down, $220,000 mortgage at 5% interest $5,600 for tax and $800 for insurance) and compared it to a rental situation (I think this home should rent for $1800 per month). Even at the full price purchase the total payment comes to $1,713. Now add the $7,500 government incentive and this looks really good for a buyer.

I just updated my sold statistics for Clifton, NJ and no surprise there; the prices are again sliding down. In the past three months single-family homes in Clifton lost about 3% of their value. The annual decline is about 11% (from November of 2007). There were only 20 closings for single-family homes in November 2008. This is an extremely low number for Clifton even at this time of a year. Another, disappointing news was that the average time on the market increased to 93 days from 77 days one month ago. Also the statistics show the difference between the average asking price in November which was $351,000 and average Sold Price of $322,000 increased dramatically. The difference is equal to 8.3%. This number is really alarming since it usually stays around 3-4% (in 2007 the average was around 4% and until October 2008 the average was around 4.5 %.) This high number means that there are many sellers willing to substantially cut the price in order to unload the property.

You can see all of the statistics here: http://clifton-nj.com/Statistics.htm

I have been selling homes since 1996 and to be honest with you I have never seen such a market in our area. What is even worse that there are some real estate models, from well respected sources, showing the prices in the New York City Metropolitan area declining another 15% to 20% in the next 18 months. The news is bad for sellers. The buyers on the other hand... :)

Kristof Tabor
Broker Salesperson
www.clifton-nj.com
RE/MAX Legend
730 Clifton, NJ 07013 Clifton, NJ
Office: 973-778-9900
Mobile: 973-930-5222
Contact Me by E-mail

Statistics and charts are based on gsmls.com closed transactions data for Clifton, NJ single-family homes only. Information deemed reliable but not guaranteed. Each RE/MAX office is independently owned and operated.