Bergen County Real Estate – 2012, A Look Ahead
It is a time of year for reflection on where we have been and a look into the crystal ball to prognosticate where we are going.
Over the last few years, the main questions people would ask me knowing I was a Realtor is, “where is the real estate market going? Is it going to continue to slide downward?” My reply was, “ I don’t have a crystal ball, but if someone can tell me when the job market is going to pick up and unemployment is going to decrease, then I can tell you about the real estate market.”
If we look throughout the United States, Bergen County Real Estate has fared much better than most dropping only about 20% - 25% from the peaks of 2006. Most of the USA averages about a 30% - 35% drop. Northern parts of Bergen County Real Estate fared even better with only about a 15% drop or less in some towns.
But it all comes down to jobs. I cannot tell you how many people over the last few years wanted to buy a home but told me they would not purchase a home right now because they were not sure they would have a job in the next year.
Lower prices have made homes more affordable to people who thought they would never be able to purchase a home. Mortgage interest rates being at historic lows have even increased the affordability of homes. However, qualifying for a mortgage has gotten much tougher. The days are gone where if you could fog a mirror you qualified for a loan and the pendulum has swung to the opposite side. You must have total documentation of your financial position before you get a loan, even though you may make a salary that enables you to carry a mortgage much higher than what you are requesting.
Personally I have some guarded optimism for 2012. I believe the Bergen County Real Estate market will start to move upward this year. I base this on the fact that over the last six out of seven months, pending sales have increased over the same period in 2010. Also, the available inventory of homes continues to decrease from the levels of 2010. Less inventory will drive up prices if demand is present. If interest rates start to move upwards, some people who are on the fence waiting for the market to bottom may move forward with purchases.
This is all good news. Looking around the shopping malls this past holiday season you could not convince me that local residents felt the need to save money. Consumer confidence is rising.
I am convinced however that once again the Bergen County Real Estate market will follow the local job market and unemployment. There has been some slight increases in jobs in the private sector over the last year. But when fears of job retention have been eliminated or at least eased, the real estate market will follow.
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