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Opportunistic Time in Suburbs

The New Jersey Real Estate suburbs in the NYC metro areas offer a very steep discount on prices from “the good ole days”.  Prices haven’t been this low since before the year 2000.  In some areas in Passaic and Essex County, a first time homeowner can purchase a 2-family house for under $300,000, where after considering rental income vs. expenses the monthly mortgage payment balance is less than what he or she was paying for rent in their previous place.  This is a wonderful wealth building block.  Off-setting unwanted down payments can be alleviated in the form of FHA financing where a buyer can keep their cash and take advantage of 97% financing on government insured mortgage loans.  Most homes we are seeing in these areas were originally purchased for over $450,000 and are now being offered as short sales or are already owned by the bank.

Staying in the same area, we have looked into the Montclair/Clifton border for townhomes.  Buyers can take advantage of major discounts from the original mortgage on the property.  We recently researched a beautiful section of this area and we found townhomes that were purchased in 2005-2006 for an average of $500,000 with an average size of 2500 square feet.  This equates to $200 per square foot.  Today, we are seeing those same exact homes that were purchased now BACK on the market in short sale or foreclosure status asking $350,000 to $375,000.  With those prices, your current price per square foot is about $144 per square foot.  This is more than a 25% discount that the banks are offering!

Heading a bit northeast, we researched a beautiful section of Wyckoff.  Homes originally purchased for over $1.2 million are now being offered at just over $800,000.  All homes in our criteria had a minimum of 4 bedrooms, 3 bathrooms and over 3,800 square feet with updated kitchen and bathrooms at the minimum.

As you can see, there are plenty of great deals out there.  We have heard from some clients that the market is still still declining.  This may be true when considering the overall economy, however with mortgage rates very low and the leverage the banks have today after the Congressional Bailout, we feel that home prices are near the bottom and buying now will not only ensure you a home that you truly love, but also ensures you that you will not miss the boat on a very discounted market.

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