The MILLION DOLLAR Question: What will the 2009 Real Estate Market Bring?

I recently interviewed Robert Abbott, Broker - C0-Owner of Abbott & Caserta Realtors, about what the crystal ball sees for the NEW JERSEY real estate market in 2009.

What will happen to the real estate market in 2009? Some will say it is doom and gloom with no hope in sight, while others, more realistic and level-headed, have high hopes for the Northern NJ real estate market in the coming year. What do you foresee and why?

Robert Abbott

"First, we have to understand that all markets are not alike and each market will react differently at different times. Northern NJ is one of the strongest real estate markets in the country. The seven year appreciation rate for New Jersey homeowners is 80.4%, more than double the national rate of 37.8%! *1 

A diversified economic community, top schools, one of the highest per capita income levels and the highest property values, all mean that this is a "blue chip" area. "Blue chip" areas hold their values with less fluctuation than other areas. According to the National Association of Realtors®, the Northern NJ median sale price of homes ($450,700), are the highest in the state of New Jersey. Bergen County did not have the over development and speculation like Florida, Nevada, Arizona & California --- which will take much longer to recover.

Secondly, history has shown that the cycle of a down market is approximately three to four years. The Bergen county market has been in a down cycle in the number of units sold for the past three and a half years. Therefore, the timing is right for a balancing of the market!

Don't assume when you hear that the market is down that it equals home prices are plummeting --- rather it is a function of the number of units sold. According to the 2007 New Jersey Home Buyer and Seller Profile, the typical seller has lived in their home for seven years. A June 2008 report issued by the NATIONAL ASSOCIATION OF REALTORS® found that within those seven years the typical New Jersey homeowner will have accumulated nearly $156,300 in housing equity.

Thirdly, buying today is the smart investor's choice. Price adjustments have already been made in the marketplace and a number of financial factors make buying attractive:

1.  lowered interest rates

2.  first time home buyer tax credit

3. increased Federal Housing Administration (FHA) loan limit.

Contrary to public belief, mortgage money is available through your local public banking institution. All of these measures will encourage Garden State residents to enter the housing market. The timing is right to buy for the first time buyer as well as to buy up for a larger home. The phrase "TIMING IS EVERYTHING" cannot be truer than it is today!"

Thanks Robert --- As always, I appreciate your help, insight & experience and so will my readers, sellers and buyers, too.

*1.Source: NATIONAL ASSOCIATION OF REALTORS®.