12/18/2008 Clifton, NJ
“Are we at the bottom of the Real Estate market at this point in time?” and “How much lower can the prices of homes in Clifton, NJ go?” are probably the two questions that I hear the most from both the buyers and the sellers. My answer is “I do not know”. We all know that there are some models out there showing the prices declining another 10% or even 20% from today. There is also some anecdotal evidence that the market is bottoming at this point. I think the buyers are beginning to see the advantage of buying something now when they compare the rental cost to the purchase cost in our area.
Case in point: I just had a price reduction on a three bedroom Cape Cod in the Albion section of Clifton. See the listing here http://clifton-nj.com/55PlochRd/index.htm. The price was reduced by $15,000 from $289,900 to $275,000. After about a week after the reduction we had five offers on the table. Five offers in this market isn’t this something!
After that, I ran the numbers for a purchase of this home with 20% down ($55,000 down, $220,000 mortgage at 5% interest $5,600 for tax and $800 for insurance) and compared it to a rental situation (I think this home should rent for $1800 per month). Even at the full price purchase the total payment comes to $1,713. Now add the $7,500 government incentive and this looks really good for a buyer.
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