Not withstanding the media hyperbole about the state of the Real Estate market, I don't think that all of the doom and gloom is warranted. Sure, sales are slow. Some buyers are unable to get financing as lenders tighten up. Other buyers are holding back, waiting for prices to slide even further. There is no senses of urgency to buy as houses sit on the market for many days. And there is the affordability issues. Families earning the NJ median income can only afford 70% of the median price of a home. While home prices soared , high paying jobs were, and still are being lost to other, more business friendly venues.
As if this isn't enough, unsold inventory is still extremely high, and many sellers are still unrealistic about asking prices. And, NJ population growth is slowing and in two years we will be in negative territory, further exacerbating the supply and demand imbalance.
However, there may be light at the end of the tunnel. And maybe it's not a train. Houses are being bought and sold in New Jersey. There ARE and will always be people who will need to, and be motivated to buy or sell a home. Some sellers may even stay in NJ and buy another home here. (sic) There ARE a lot of people who can afford a home. There ARE lenders who are offering a variety of mortgage products geared to individual needs that can allow people to get into that new home. And, in New Jersey there ARE several programs that assist first time home buyers with grants, savings programs, and lower interest rates. And, don't forget, interest rates ARE historically low
Regarding home prices, to be sure, there had been an extraordinary run up in average prices staring the early 80's through 2005, with an 87% increase just from 2001 to 2005, far out pacing income growth and resulting in the affordability crisis. While we have lost some ground since then, and will continue to for the next two or three years, (but at a slower rate) it will rebound and prices will remain high but at more sustainable levels. For sellers, at least those that have been in their homes for 4 or 5 years, they can price the house in keeping with the current climate and still come out ahead. Buyers should realize that the other side of the high price issue is value. It pays to own in the long run.
More .good news, all local markets have not suffered equally. Locations that are accessible to New York, particularly on a train line that can get riders in within ½ hour are doing quite well
So, my message to the buyers and sellers out there is this: Don't be caught up in all of the negative press that will have you believe that the sky is falling. As Chicken Little found out, it's only an acorn. If you are selling a house, price it right and they will come. Many sellers are realizing that this is not the spring of 2005 and are selling there homes, albeit for less that they would have then. For those who are thinking of buying, it's a good time to do so, with the low interest rates, and long term return. Real Estate WILL continue to be a good investment. Much of the sluggishness is due to fear garnered by the media, that knows that bad news sells.
To my fellow Realtors, I say please help counter the negative spin by the media. While the market downturn is real, it due as much to fear, procrastination, distorted perceptions and unrealistic expectations of both buyers and sellers, than to real economic factors.