Thomas McCormack

I love the Salt Creek Grille in Rumson, NJ. It's beautiful architecturally with a dark Craftsman aesthetic and stunning views of the Navesink River, especially at sunset.

There's much to love on the menu and it's suitable for a casual dinner with friends or a more formal affair.

Best of all, Salt Creek offers some great events such as Happy Hour Weekdays, Monday thru Friday, 4 to 6:30 pm featuring 1/2 Price Wines by the Glass (nice selection)... Plus they offer a very generous complimentary food bar. On Mondays its Mexican, Barbeque on Tuesday, Italian on Wednesday, Wing Night on Thursday and Seafood on Friday!

Plus, live jazz on Friday evenings.

Tell them Tom McCormack sent you! (It won't help you at all but maybe they'll remember me next time I'm there!)

On Oct. 11-14, nearly 200 luxury property experts met in Philadelphia for the 13th Annual Luxury Real Estate (LRE) Fall Conference at the Ritz-Carlton Philadelphia. In addition to the discussions of successful strategies and reports on current market conditions, more than a dozen LuxuryRealEstate.com members were honored with awards during a banquet on the final evening of the event.

It was the first LRE event I've attended and along with Carolynn Ozar Diakon, Broker/Owner of Resources Real Estate, I was very pleased to have met some of the most influential brokers nationwide, along with a few from the international real estate community.

There was much to be impressed with at this conference -- stellar marketing expertise, extraordinary properties, and huge production volume -- but most impressive was the generosity exhibited by many presenters who shared in-depth views into their business activities. This was not your typical real estate crowd.

My biggest regret was to not have been able to attend all of the workshops due to overlapping schedules but some of the highlights included a branding & marketing session conducted by Jacky Teplitzky, one of NYC's top brokers (Prudential Douglas Elliman); a group-hosted workshop on best marketing ideas which included a very thorough presentation by James Retz (Daniel Gale Sotheby's Int'l/Long Island.)

What struck me most was the utter lack of competition in the room; instead the conference attendees exhibited cooperation & goodwill, even among direct competitors. A centerpiece to the conference was the awards dinner with recognition ranging for everything from "Rookie of the Year" (awarded to Simon Turner & Michael Marquette of Marquette Turner, Sydney Australia, far left & right above, respectively) to "Biggest Sale 2007" ($19+million) to the latest inductees to the "Billionaire's Club" (individuals who have each sold more than $1 billion worth of property.

A special honor was presented to Lois Schneider of Lois Schneider Realtors of Summit, NJ, for lifetime achievement.

(from left: Shaun Dalton, Royal Realty, Naples FL, Diakon, and Jane Poppelreiter, Paragon Real Estate, San Francisco, CA.)

(McCormack and Maggee Miggins, Keller Williams, Maplewood, NJ.)

Lots of high points but perhaps what I'll remember most is a long chat I had in the Ritz Carlton lounge with Tim Murray of Alain Pinel Realtors (San Francisco) who had been acknowledged with the "Extraordinary Philanthropist" award... a truly inspirational man with a wonderful story to tell.

I look forward to incorporating many of the professional (and personal) insights I gained into my own practice.

(Please note: all figures for past years indicate year-end totals unless otherwise indicated.)

Sales in Rumson for the first 3 quarters of 2008 have been sluggish relative to the same period last year with unit sales down 32%. For last year during the same period, 94 homes were sold. It's clear that buyers have not been feeling the need to take action. For some this is because they are unable to move forward with a purchase until they've sold their current home. For others, the uncertainty in all markets has kept them on the sidelines until they're feeling more comfortable making such a large commitment to their future. Still others are not convinced that the downward pressure on prices has finished its work: some are predicting this trend will continue well into mid-2009. Encouragingly, October closed sales were strong but Rumson is on pace to still close about 25% under last year in overall unit sales for the year.

With less demand there has been a strong downward pressure on prices with average sales price down almost 10% since last year.

On a more positive note the gap between asking and selling price has held steady for the past three years at about 7.25% -- whatever added leverage buyers have realized over the past few years, further negotiating strength is not something they've gained. What's important to note here is that many who have been trying to sell have been unsuccessful due to their inability or unwillingness to price the home according to the current market. Buyers are less frequently "low-balling" an overpriced property, and more frequently making offers on homes that are relatively well-priced. The fact that the differential has not changed that much in the past few years would indicate that this aspect of buyer behavior remains strong: buyers are buying homes that are priced correctly.

Advice to sellers: Clearly, the homeowners who sell successfully are addressing price and providing some but not excessive negotiating room. Its never been more important to understand the market, be educated about its current condition: what was true even a few months ago may no longer reflect reality. Also important: if you are planning to make a purchase after your sale, be mindful of the financial advantage you will have as a buyer. To focus on the "spread" between those transactions is often more helpful than to fixate on actual prices... i.e. you may be getting less on your sale but you'll likely be paying less on your purchase. Please call (732-212-0440 x212) or email me to discuss selling a property in Rumson in this current environment.

(Advice to buyers: it's important to understand the specific market you're buying in, be very familiar with direct comparables, and to put together a strong offer... many buyers right now are throwing numbers out and not formulating a real offer. Call me to discuss.)

www.thomasmccormack.com 732-212-0440 x212 tom@thomasmccormack.com

First the good news: Due to the ongoing financial crisis playing out on Wall Street (as well as around the world), everyone is finally waking up to the fact that in order to pull us out of this mess, the housing market needs to get back on firm footing and because of this recognition we're more quickly approaching the bottom of this cycle. That means that the small glimmer of light on the horizon is not an oncoming train but rather the beginnings of a recovery.

Ok, now the bad news: We're not there yet. According to Jeff Otteau of the Otteau Valuation Group, we're still about 10 months out. Otteau says that in New Jersey, while we had been experiencing a 1/2% monthly value reduction, we're now facing a full 1% monthly reduction. This means we've got 10% more to go until we reach a critical point in affordability... where the median home price meets the median income level. For the state this equates to a 28% value reduction since the market downturn in August 2005. Of course, this is a state average... according Otteau, Monmouth County fares a bit better with an estimated 25% change.

The take-away: Keep in mind that unless you're paying cash, you'll want to factor in the cost of financing a home purchase in addition to the actual purchase price. Interest rates in the long term are expected to rise and since every increase of 1% in your interest rate equates to 9% increase in cost, those looking to "time the market" should begin now to educate themselves on their desired market, the housing inventory and real values. There are some very good buys right now and both first-time buyers and investors are making their first moves now. If you'd like to discuss your market strategy (for both buyers & sellers), please send me an email or call (732-212-0440 x212).

First-time Home Buyers are beginning to discover that now is a wonderful time to leave the world of renting and become homeowners. There are many reasons why the next six months will be "prime time" for this group who has largely been shut-out of the real estate market for the past seven years or so.

Let me be clear, this is not the time for folks who have poor credit, no job and no visible means of support... hopefully we will no longer see loan programs that allow anyone with a pulse to qualify.

But if you are employed, have been paying your bills and have established a decent credit score, you may not only qualify but you'll find there are various programs available that may help you save big money. In addition, prices have been falling and will soon have reached a critical point of affordability: where the median home price meets the median income for New Jersey residents. And while Monmouth County's median home price is high, it's wonderful open space & beaches, great schools and proximity to New York make it highly desirable.

STATE FUNDED PROGRAMS

The New Jersey Housing & Mortage Finance Agency offers a below-market, fixed interest rate to first-time homebuyers. A first time buyer is defined as anyone who has not owned property in the past 3 years. Down payments of as little as 3% are required and must come from the borrower's own assets. Loans are 30-year fixed rate. Certain closing costs can be gifted by family members, non-profit organizations or government agencies. HMFA loans can be written as conventional or FHA loans. In addition, the HMFA has the Smart Start program which gifts the down payment to the borrowers, up to 4%. Visit their website for qualifying guidelines.

MORTGAGE PROGRAMS

Companies like Wells Fargo are helping first-home and other buyers afford a new home with creative programs such as their 3-2-1 Buydown.

What is a Buydown? A regular temporary buydown allows for payment changes to occur once every 12 months (1% max per year) for the first 3 years; in the 4th year the rate is locked for the remaining term (i.e. it becomes a 30 year fixed rate at that point.) This 4-30 year fixed rate is confirmed when the loan is originated so you know up front what the rate will be. This is not a negative amortization loan.

Example: On a 3-2-1, assuming a note rate of 6%, the following would apply:

• Year 1 interest rate - 3%
• Year 2 interest rate - 4%
• Year 3 interest rate - 5%
• Year 4-30 interest rate - 6%

What is the cost? The cost of the interest rate buydown may be paid by the seller at the time of closing. The cost will be paid for from the proceeds of the sale of the home (as a Sellers Concession.) The cost of the 3-2-1 buydown is based on the mortgage that the buyer takes from the bank. A 3-2-1 buydown cost is approximately 4% of the mortgage amount.

Example: Loan amount of $300,000 at 6% = cost of $13,056 to be paid by the seller. Given the current market this may very well be an acceptable amount for the Seller to contribute as part of the contract negotiation. This is a direct savings to the buyer of over $13,000.

For more information, guidelines & restrictions about this program contact Steve DeLizza at Wells Fargo.

AVAILABLE HOMES IN MONMOUTH COUNTY

For a list of affordable homes in Monmouth County, visit my website and click the First-Home Buyers button on the left for homes listed for $350,000 or less. You can also search the MLS and create your own specific searches and save them in your password-protected account (free!) If you need help setting it up, just send me an email.

If you're interested in getting your search started right away, feel free to give me a call... I love first-home buyers!