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).
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