I’ve been asked by several investors recently to share my take on Section 8 multi family investing.  My partner is a landlord who owns a 22 apartment unit building.  Of those 22 units, 18 of them are rented to Section 8 tenants.  He has owned this building for almost 7 years and has only had to evict 3 tenants. 

The biggest benefit in investing in Section 8 is that you get paid by the third of the month.  The check from the Section 8 office comes to you by mail by the 3rd, and by the 5th of the month, the tenant pays their share.  Their motivation to pay is that they know if they don’t comply with the lease payment schedule, they will lose their Section 8 privelege.  This is one of the big reasons we like Section 8.  Tenants have a huge motivation factor to abide by the lease and respect your property.  The loss of Section 8 priveleges are PERMANENT if loss of privelege occurs.

The Housing Authority or Section 8 office will inspect your property before the tenants move in.  Additionally, they inspect the property annually.  There are typically minor repairs, but considering the payment schedule with practically no effort, these minor repairs are of no consequence and is rather inexpensive.

A few areas that Section 8 and the Return On Investment (ROI) is favorable is Hudson, Passaic, and Essex County.  Any home can qualify for Section 8 under specific conditions.  In our experience, a Cerfificate Of Occupancy (C of O)  inspection is more challenging than Section 8 approval;  C of O’s are not difficult to achieve either.  Another benefit is that Section 8 has a “Fair Market Rent Table”.  This table, which you can find HERE, states the maximum Market Rent that is due to the landlord, specified by number of bedrooms the property has. 

You can list your property for free by contacting the local Housing Authority.  They will give you a “listing sheet” that you need to fill out.  Hint:  The more info, the better.  All of this information is implemented in their book/database where tenants look for their preferred property.  Some landlords have found immediate occupancy by including a small and used furniture package.  Some include TV’s.  This all could be put into the listing and is likely to stick out to tenants.

As the landlord, it is up to you to screen the tenant and maintain your property.  If you are not up to the task, you can hire a property manager to do this for you.  You are also responsible for collecting any Security Deposit agreed upon between the tenant and yourself. 

The housing agency will pay a check to the landlord during the first couple days of the month for the difference between the jurisdiction payment standard and the tenants total payment.  The tenant would pay the difference between the total rent and the voucher amount. 

Damages to the property must be agreed upon between tenant and landlord.  If there is damage that the tenant is responsible for, you may enforce your lease and go after him for the damages or work something else out.  The Housing Authority does not provide compensation for any property damage.

If you have repeated issues with the tenant, you may enforce the lease and take the necessary actions against the tenant.  Keep in mind, that when making a complaint against a tenant, you must follow your local regulations.  If you write a “warning letter” to your tenant, you should send a copy as well to the Housing Authority.  In some cases, and depending on severity, the Housing Authority could take action and evict the tenant for you immediately.

As stated above, before the tenant moves into the property, the Housing Authority sends an inspector to preview the property.  Here is a list of the most common factors they look for:

• No chipping or peeling paint anywhere on the INSIDE of the property.
• No chipping or peeling of paint five feet and under on the exterior of the property.
• Cooking stove must be clean and in working order
• Refrigerator must be clean and in working order
• Heating system must be in working condition
• Must be hot and cold running water in kitchen and bathrooms
• Shower or bathtub must be useable
• Toilets flush with no leaks
• Bathroom must have a window to the outside OR and exhaust fan.
• No plumbing leaks
• Ground floor windows must have locks and exterior door must have working locks and deadbolt
• Outlets must have cover plates
• No missing, cracked, or broken windows
• No rook leaks
• Must be GFI outlets around all sinks
• Flooring cannot be torn which can cause tripping
• Smoke detectors must be in working condition
• Stairs and railings must be secured. 

In conclusion, Section 8 makes great investments.  The ROI on multi family dwellings can be much higher than a normal traditional rental.  You can’t beat getting guaranteed rent checks from the Housing Authority!   Contact us if you are interested in hearing more about Section 8 or looking to purchase Section 8 property.  We always have condusive buildings we look at for this matter.

CLICK HERE for article.

I love West Orange.  For most of you that know me know that I am from Montclair, practically the W. Orange border.  In my research, West Orange is in a little bit of a bind as far as inventory goes.  I think the overall appeal to West Orange is higher than most areas of Essex County, so our prediction stands that 2010 will see further declines, but not to be scared off.  If you find a home that is priced right and you absolutely love it, let’s sit down and look at the value where we will find an aggressive bidding price.

So inventory in West Orange stands high with 223 Homes for sale as of March 1, 2010.  The average listed price of a home is $514,654.

In January, 2010 there were only 13 homes sold with an average selling price of $430,438.

In February 2010, there were even fewer sales.  Only 9 homes sold with an average selling price of $439,944.

An Absorption Rate is the time an area will sell out of homes at the previous months’ sales pace.  That being said, the Absorption Rate for West Orange was 24.8 Months, above the national average.  This is not a healthy sign of inventory / absorption.  We predict values will continue to drop in West Orange until the buyers and sellers out there reconnect on what a fair price for the homes are.  With the amount of homes versus the amount of sales, we predict there will be a drop in values of 8-10% in West Orange in 2010.

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If you are looking for homes for sale in West Orange, NJ, chances are you have run across our website.  We specialize in West Orange real estate and would value an opportunity to work with you on your real estate needs. Contact us for a consultation.  Ask for Scott, that’s me.  Scott is a former All-American baseball player /alum of Montclair State University (1997-2001) and spent his college years bartending in West Orange.  Ya just might know me!!  After my 4 years at MSU, I went on to play with the NJ Jackals.  I am a local guy and everyone’s friend, but very experienced real estate pro when it comes down to business!

Before I forget, you can click here to view all available homes for sale in West Orange, NJ. Be sure to call us to set up a showing appointment.

Well, let me start by saying Happy New Year, West Orange, NJ!!

It’s been a rather interesting year in the macro economy and as a result, real estate values, prices, and inventory has fluctuated greatly.  Let’s see how West Orange did in 2009.  Be sure to read the entire article for our West Orange 2010 real estate predictions.

2008

• 456 SINGLE FAMILY HOMES sold in West Orange during 2008
• The average sales price of a single family homes sold during 2008 was $420,036
• 26 Multi-Family Homes sold in W. Orange during 2008
• The average sales price of a multi-family home sold in 2008 was $341,891

2009

• 398 SINGLE FAMILY HOMES sold in West Orange during 2009
• The average sales price of a Single family home sold during 2009 was $383,867
• 31 Multi-Family homes sold in W. Orange in 2009
• The average price of a multi-family home sold was $254,929

The statistics above show that Single Family Home sales volume dropped 12.8% in 2009 when compared to 2008.  They also indicate that there was an 8.7% drop in the average sales price of single family homes.

The statistics above show that Multi-Family Home sales volume in West Orange increased by 16.2% in 2009 when compared to 2008.  They also indicate that there was a significant 25.5% drop in the average sales price of multi-family homes.

Considering the circumstances, a drop in Single Family home values of 8.7% is rather good compared to other parts of northern NJ.  Prices on multi-family homes have dropped to very favorable prices.  While prices have dropped, rental rates have remained nearly the same, making the pro forma for an owner occupied dwelling or income property that much more attractive.

See volume and average selling price charts below.  Click graphs to enlarge.  Click Here to download the full W. Orange PDF Report

2010 Real Estate Prediction for West Orange

As of January 4, 2008, there are 296 homes for sale in West Orange.  During the month of December 2009, it was reported in the charts above that 33 homes sold.  This puts the current rate of absorption for West Orange at just under 9 months.  Note:  Builders use the number 4 as an indicative rate of absorption when looking into favorable construction markets.  Under 4 months of absorption is favorable to build.  Over 4 months is considered not favorable.  This is the case with most of the country, however.

During the first half of 2009, 155 homes sold in W. Orange.  During the second half of the 2009 year, 243 homes sold in W. Orange, an increase of 63.7% in sales volume.  Inventory levels have shrunk and prices are beginning to stabilize.

We believe that West Orange has experienced the bulk of any real estate correction.  In consideration of the 9 month rate of absorption, we believe that W. Orange property values will fall an additional 5-10% due to the large amount of inventory.  The expiration of the First Time Homebuyer Tax Credit will likely create a bounce affect.  Sales volume will likely decline slightly, however low mortgage rates ought to provide for extra buyer motivation.

That being said, we believe that any drop in real estate values that we predict could be negated or alleviated by utilizine the First Time Homebuyer Tax Credit, as well as taking advantage of historically low rates.  We believe that West Orange will see a general stagnation in values over the next 12-15 months, however we encourage those looking for homes to begin shopping now.  There are great deals out there and if you love a home, this year may not be the year where you can hope that it will “be there tomorrow.”  West Orange has a high turnover ratio with an average of over 33 homes per month selling.

Remember!!  A nice home, priced correctly sells quickly.  If you find a house you love, look into making a bid on it.

I wanted to write a post to thank the thousands of monthly visitors who have helped make our website the way it is today.  I take great pride in providing up to the minute information on New Jersey real estate.  We achieved numerous goals in 2009 and plan for our website to dominate the global industry in online real estate marketing for New Jersey.  For those of you who haven’t met me, my picture is in the thumbnail!  You will get much more of my ugly mug as 2010 progresses as we plan on going more “video” on our site.  I hope you also enjoy our monthly market updates as much as we like to write them.

If there is one thing I would like for you to remember is this:  It is a proven statistic that 84% of people looking to buy or sell their home, begin their search for an agent or a home ONLINE, typically using Google, Bing, Yahoo, AOL, etc as their search engines.  We are happy to say that we are the most powerful website when it comes to overall exposure in all of Northern New Jersey and is one of our most powerful tools in getting homes sold, getting great deals, and giving buyers and sellers the competetive advantage of online global marketing of your real estate.

Five 2009 Goals:

1. Attract over 5,000 unique visitors per month to our website :  ACHIEVED BY A LONG SHOT
2. Offer an exclusively customized MLS search tool that is user friendly for real estate searches in Northern New Jersey :  ACHIEVED
3. Coordinate our staff and agents to make one of us immediately accessible in all areas of northern NJ :  ACHIEVED
4. Help at least 5 homeowners go from near immenent foreclosure to short sale :  ACHIEVED
5. Launch a northern NJ syndicated radio show regarding macro economic local news :  ALMOST THERE!!!!

During the first quarter of 2010, we are going to launch video blogs where yours truely and my associates/partners will be doing online podcasts, giving you a more intimate real estate experience.  Additionally, we are going to be holding real estate seminars regarding investment property and home ownership in NJ.  Stay tuned for those dates!

Our ultimate goal is to learn from you as you can learn from us.  As the owner of NJ Real Estate Guys, and at only 31 years old, I have learned more good/bad lessons in a short time than most learn in a lifetime.  These lessons stem from both personal and corporate level experiences when I was National Director of Business Development with “the bank”.  At minimum, I hope I can share some things with you that will make you a better homeowner and/or real estate investor.  Going forward, we will continue to implement strategic plans in the process of building wealth through real estate.  Real estate is all about education, networking, and marketing.  You can build a powerful business using those three factors.  Remember:  Education without application nets you nothing.  Be smart and when the time is right for you, we would value an opportunity to get your consideration to work with us.

Thank you again for reading and making us who we are.  We look forward to meeting you in 2010 and may this year be prosperous to us all.

Sincerely,

Scott Allan

and all of the New Jersey Real Estate Guys

So instead of talking about the past and looking in the rear view mirror, let’s discuss my predictions for 2010 and look into our crystal ball.  We’d love to hear your predictions and feedback in our commenting section below. 

Isn’t it funny to hear all of the people in real estate, Wall St, etc saying that they saw this crisis coming from a mile away?  I worked with a large construction lender in 2005-2006, and one of the glaring issues I saw was that almost 90% of their entire portfolio was sub prime.  I pulled a few random files and noticed a common school teacher in Michigan on a $55,000 fixed income, with no other sources of income.  The bank had allowed her to close on 4 Constuction to Permanent loans totalling over $1.2 million.  Her intention was to flip the properties and establish quick wealth, something many people did.  Not sure you call that guilty, because everyone likes to have the American Dream in their sights.  Although I did not underwrite nor have anything to do with her loans, I thought to myself that this woman could be SOL and completely screwed if / when the homes were finally built. 

I have kept in touch with this woman as she contacted me in regards to the procedure to take to modify her loans once the homes were actually built.  The market tanked and she was left holding the bag on homes she could not afford and without modification capabilities.  The bank was forced to foreclose on all 4 of her loans.  In hindsight, I should have gone to Washington D.C, Wall St, and on CNN evening broadcast to expose this problem I saw.  I didn’t.  So that is my quick story on hindsight and why its easier to look ahead instead of what’s behind us.  I am a better, more educated real estate professional because of these experiences and if there is any good to come out of a crisis, it’s the big “Live and Learn” cliche.

I believe that unemployment will peak out in 2010.  Unemployment is the biggest driving indicator for the recovery of the housing market.    Until we see improvement in the labor markets, you can expect our homes to stagnate in value.  The four main drivers of today’s sudden surge in sales activity are the following:

1. Lower and more affordable prices
2. Additional foreclosure pressures
3. First Time Homebuyer Tax Credit
4. Low Interest Rates

So in 2010, where are we going?  Well, we can expect great sales months for about the first quarter of the year.  But let’s look at what is available out of our 4 drivers listed above after April, let’s say

1. Lower and more affordable prices
2. Additional foreclosure pressure
3. First Time Homebuyer Tax Credit
4. Low Interest Rates

As of today, rates are all over the board, however just 4 months ago, a mortgage with rates in the mid 4’s were not that hard to come by.  Today, on FHA we are looking at about 5.25% and slightly less on conventional financing.  I expect mortgage rates to end 2010 higher than what they ended in 2009.  Furthermore, I expect a “Cash for Clunkers” type of result when the First Time Hombuyer Tax Credit expires on April 30.  Unless the government extends this Tax Credit, which I doubt they will (If we need to I’m all for it though), then we will see a noticeable change in absorption rates.

In early 2008, the national average absorption rate was about 11 months of inventory.  An absorption rate indicates the number of months it takes to sell the current inventory at the present rate of sales.  Today, we have dropped to about 7 months of inventory.  My opinion is that we will settle in by Q3 of 2010 somewhere between 8 – 9 months.  I also believe that the inability of the Federal Government to purchase additional Mortgage Backed Securities will have an negative affect on real estate. 

That being said, I truly believe that today is a great time to buy.  At least get off the fence and start looking.  Look at it this way.  I believe that we will see an overall lower price of homes by mid year, lower than what they are today.  We are past the huge downward correction so any further declines may be subtle, but they will be there.  Buy a little bit higher today at lower rates and get your tax credit.  Or you can buy later in 2010 and POSSIBLY get lower prices with no tax incentives and no rates at what is considered par right now.  It’s kind of Catch 22′ish, don’t ya think? 

In conclusion, let’s wrap up with discussing Northern NJ.  Home sales in Hoboken dropped from 80 homes in October to 60 homes in November.  However since April, there has been a V-Shaped recovery in inventory sold (see graph).  I don’t expect a V-shaped recovery to sustain, but I see consistency.  With the extension and expansion of the First Time Homebuyer Tax Credit, we will see sales in Hoboken get stronger.  As jobs are created again, Hoboken will get stronger as we rely heavily on the financial markets similar to how NYC does.

Jersey City is leading the way and having a dominant Q4.  I believe that Jersey City will experience the same as Hoboken’s recovery and will lead Hudson County in overall performance in the early to mid part of 2010.  Same as Hoboken with employment.  As employment gets stronger, Jersey City will receive a big boost.

In the suburbs, I expect areas like Wyckoff and Montclair to make a push for growing markets.  For instance, at this time last year, Montclair’s absorption rate was nearly 9 months.  As of today, Montclair’s absorption rate is a strong 4 months.  I wrote an article in February 2009 about a pocket of homes listed for under $400,000 in Upper Montclair.  Those homes have sold and the homes left on the market for under $400k are far more inferior than the homes that were available in February.

So without further ado, I’d like to pass along the invitation to give me your thoughts and predictions.  Again, this is only my opinion and I do not want this to act in any advisory manner.  These are just my gut feelings that we are all entitled to express.  Looking forward to reading some of your thoughts!

If you are in the market to purchase a home

Narrowing down your options for a buyer’s agent can seem a bit overwhelming at first, but asking yourself these four simple questions while screening available agents will ensure the best results.

Do You Feel Comfortable with the Agent?

The simple truth is that you will be working closely with your buyer’s agent as you search for the perfect home and as you negotiate a deal with the seller. Therefore, it is essential for you to feel comfortable with the agent you select. Not only do you want to feel as if your buyer’s agent is truly operating in your best interest, but communication is key to finding your ideal property as quickly as possible. So, be sure to work with a buyer’s agent who you feel comfortable talking with and who you believe is truly listening to you when you discuss your needs and wants.

Is the Agent Familiar with the Market I am Interested in?

Finding a buyer’s agent who is familiar with the area in which you are interested is also essential. The more familiar the agent is with your market of interest, the better he or she will be able to locate properties on your behalf. Furthermore, the more experience the agent has with your market, the better he or she will be able to judge the value of the property and advice you on the price you should offer and expect to pay.

Does the Agent have Reputable References?

Any time you work with someone who provides a service, it is important to check on his or her references. Before hiring a buyer’s agent, be sure to check references and to use other resources to learn more about the agent you are considering hiring. Performing a Google local search or checking for testimonials on yelp are two great resources to explore.

Does the Agent’s Process Make Sense to You?

Finally, you should ask the buyer’s agent to run down the process that he or she uses for finding a home and for helping to negotiate the price on your behalf. If the process doesn’t make sense to you and if the agent is not willing to provide clarification that makes sense to you, you should move onto a different agent.

About the Author:

Eric Bramlett is the broker & co-owner of One Source Realty, a boutique Austin real estate company.  Eric & his team specialize in a number of Austin areas, including downtown Austin condos & Steiner Ranch real estate.

Three (3) Family Home priced at $280,000

Located off of Central Ave in East Orange.  Built in 1940 and completely gut-renovated in 2008.  All Units have a washer/dryer, Central A/C, Vinyl Siding, Privacy fence in back, and security system.  Owner pays water.  Tenants pay Electric, Gas, Heat.  Building has a total of 16 rooms, 10 bedrooms, and 3 Full Bathrooms.  Underground utilities.

1. First Floor unit has a total of 5 rooms which includes 3 bedrooms and 1 bathroom.  This unit is rented for $1,300 per month.
2. Second Floor unit has a total of 6 rooms which includes 4 bedrooms and 1 bathroom.  This unit is rented for $1,550 per month.
3. Third floor unit has a total of 5 rooms which includes 3 bedrooms and 1 bathroom.  This unit is rented for $1,300 per month. 

 Let’s now look at how the numbers work as an investment property.  The pro forma will be based off of today’s (1/8/10) investment mortgage program using a 75% Loan To Value and 5.75% rate

Purchase                              $280,000

Down Payment:                     $70,000

Mortgage Principal:               $210,000

Monthly Gross Rent:            $4,150

Monthly Expenses

• Debt Service:                              $1,247
• Taxes                                         $626
• Insurance                                   $150
• Property Mgmt (if applicable)        $332 @ 8%

Total Expenses:           $2,355

Surplus Cash:               $1,795 or $2,127 if managed by owner

Net Operating Income :  $21,540

*Mortgage could be paid off in 12 years on a 30 year term.

If you are interested in setting up a showing appointment, request additional details, or would like more information on how to purchase this home, please contact us and we will assist you in the entire transaction. 

As the working week comes to an end, and while you are pondering your thoughts on how much rum and egg nog you could possibly drink this weekend, I want to leave you with some real estate thoughts that stuck out to us during one of our visits.  If you are looking for your primary home or an investment, this Kearny Two Family Home for sale should be right up your alley..

It is a 2 family home located in the Arlington section of  Kearny, NJ.  For the price and current market inventory it is one of the largest in its group and also one of the nicest in terms of the overall condition. (The thumbnail picture is the actual home). 

The home is located within walking distance to bus stops and is less than 100 meters from Roosevelt School.  There are wood floors, gas forced heat, and Central A/C.  There are 2 separate gas and electric meters and as a bonus, the roof was replaced in the last 2 years. 

The building has a total of 12 rooms, 5 Bedrooms, and 2 Full Bathrooms.  The basement is partially finished and is HUGE, which can be used for storage, however is finished enough to use as a recreational room.  Taxes on this home are approximately $9,500.

Currenly, the first floor is occupied by a physician as a Medical Office.  It is not known at this moment if the tenant plans on staying put, but if not, no worries.  Our property managers can assist in finding a new tenant, which we would recommend as medical, law, office, or retail.  You also have the choice of simply renting it to a normal tenant who plans to live there.  Either way, you have excellent options since that first floor is zoned Commercial (C-3).  The first floor commands a rental of $1,200 to $1,400 per month minimum.  The second floor commands nearly the same, closer to $1,200. 

The price of this home is just under $340,000.  For the location, it speaks for itself.  It is only 4 miles to the Meadowlands where the world famous XANADU is opening its doors in mid 2010, and you are also less than 7 miles from the Lincoln Tunnel!  Inside of 10 miles, you have anything else you could ever imagine…Entertainment, fine dining, nightlife, etc…

Here is how the numbers would work if you purchased on a 30 Year Fixed Mortgage at 5.5% rate.  Rates are significantly lower for owner occupied home loans.

$1,500     Monthly Debt Service (Mortgage)

$791         Taxes Escrowed Monthly

$2,291     Total Debt / Escrows

Taking into considerating that you rent out the first floor at $1,300, your leftover monthly payment would be $991 per month if you are an owner occupant (This is actually cheaper than renting).  An investor would get a positive cash flow of about $300 per month.  Although the capitalization rate is slightly low for an investor (to some), this home has the perfect location and condition to nearly assure you a much higher future value and be in a league of its own in regards to available inventory for sale now or in the future. 

If you are interested in viewing additional pictures or would like any other information on this home or other Kearny NJ homes for sale, please do not hesitate to contact us.  We are your real estate experts for all of Hudson County multi family homes, single family homes, and condos for sale.  CONTACT US NOW

Let’s take a look today at multi-family investing in Essex County.  I am noticing more and more that prices are beginning to level off in the Newark multi-family market.  There are a lot of short sales, some REO, and other traditional sales out there.  No need to get into a bidding war on a listing that has multiple offers.  There are bigger fish to fry.  Multi family homes make great income producing investments and have been a staple in some of the wealthiest investors in New Jersey’s portfolio.

I’ve recently come across several Newark multi family homes for sale that appear from the pictures to be in great condition, some newer construction, and some older.  I’ll take one in particular that look good to me.  See numbers below:  (We handle purchases and assist in selling via listing the properties in Newark with our thorough international marketing strategies)

4-Family Home:  Located off South Orange Ave in Newark:  100% Occupied

Asking Price:  $199,000

Purchase @ $199,000 – 30 Year Fixed Mortgage at 5.25% for investor financing.  Less if owner occupied.  Let’s look at the higher rate for investors for conservative sake.

Principal Amount:         $160,100

Monthly Mortgage Payment:                                  $884  +/-

Annual Real Estate Tax: $5,200 Annual  or              $433 per month

Insurance:  $1,500 Annual or                                 $125 per month

Mortgage, Reserves & Escrow Debt TOTAL:                $1,442  per month

Rental Income @ $850, $875, $875, $900:            $3,500

Less Expenses & Debt                                       $1,442

Monthly Surplus Income:                                 $2,058

Annual Surplus Income:                                  $24,696  (Positive Cash Flow)

Capitalization Rate:                                            12.4%

The nice thing about purchasing multi-family homes that are already occupied is that your lender will offset the mortgage debt with the current rental income, which will give you more leverage with your Debt To Income ratio.

So there you have it.  That is just one example of a how the numbers can work out if you are looking for investment property or are looking for your own home that could off-set your mortgage. 

Be sure to contact us if you are looking to buy or sell multi-family home(s) in Newark or anywhere else in Northern Jersey for that matter.  We are in it to win it, just for you!

So January started out a bit slow.  I always blame slow January’s on the ever-changing bank guidelines that always come out in fury at the beginning of the year.  Let’s not use that as an excuse though.  I still predict that the second half of 2010 will be quite indicative of a possibly soon recovery.  You have the First Time Homebuyer Tax Credit expiring in June, the Fed is going to stop purchasing Mortgage Backed Securities (MBA’s), and Consumer Confidence could sink when they turn on CNN.

Anyway, this is all hearsay.  I am an advocate of letting the market play it out itself.  February was VERRRRY slow for single family home sales in Montclair.

Let’s start with Inventory Levels.  As of March 1, 2010, there are 95 Single Family Homes for sale in Montclair with an average listed price of $990,214.

During the month of February, only 7 homes sold in Montclair. The average price of a home sold was $733,414.  Indicative of changing bank guidelines is the lack of closings during February despite 35 homes currently in contract or Attorney Review at the moment.  So despite a slow sales volume month, there are a few dozen homes written up, which is positive.

Absorption Rate:  An absorption rate indicates the number of months it takes to sell the current inventory at the present rate of sales. As of March 1, there are 95 Single Family Homes for sale.  February showed only 7 closings which mathematically puts Montclair’s rate of absorption at 13.6 Months, the worst its been in a long time.  Typical absorption rates in Montclair is between 3-5 months.  Using home sales volume over the last 9 months, I would say that we can chalk February up to just a bad month.  Nothing too concerning here unless this absorption rate repeats itself in March and April.

So, could the expiration of the First Time Homebuyer Tax Credit have the same outcome as the expiration of Cash For Clunkers?  If you remember, once Cash For Clunkers expired, car salesmen were sitting in their office playing tiddlywinks.  Things slowed drastically.  Let’s hope that real estate is different than the auto industry, but time will only tell.  The second half of the year will be interesting for sure.

That said, there are still great deals out there.  If you fall in love with a house, don’t hesitate to look into possibly bidding on it.  Good homes at the right price are still selling quickly.  If the home you love is a good deal, make a play for it before someone else does.

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January 2010 Real Estate Recap | Sales | Absorption

Well, chalk up one in the books as January is over with.  A strong December in Montclair was followed by a modest January.  We expected sales to dip a little in January with the new year and the fact that banks implement a new set of guidelines.  Typically it takes about 45 days to return to normal market conditions.  The absorption rate for Montclair fell from 3.38 Months in December 2009 to almost 4.9 in January 2010.  The current rate of absorption is not worrisome as Montclair is below the national average again….signs of a recovering housing market.

During the month of January, 17 homes sold with an average sales price of $737,941.  The average home sold had been on the market for an average of 82 days.  This is a tremendous improvement from 1 year ago.  In January 2009, only 8 homes sold and the average price was $634,263.  The recent January in 2010 showed almost a 100% improvement in sales activity and a close 15% increase in average selling price.

I am currently at the airport as I type this, but tomorrow I will update this report with charts and graphs to give you a better feel for the market.  Till then, take it easy!

Annual Recap | Real Estate Report

Happy New Year, Montclair!! After a rather interesting year, I think the real estate market deserves a “State of the Market Report”. In this report, we will look at last months statistics, overall yearly results, and comparisons to 2008. Some of you may want to sit down before reading, but all in all, we currently see a great opportunity in one of NJ’s best bedroom communities with immediate access to New York City. Can’t beat today’s value in Montclair.  Be sure to browse all Montclair NJ Homes for sale via our exclusive MLS / IDX system.

Without further ado, here goes! All information is comprised from the Garden State MLS.

2008

• 341 Homes Sold During 2008
• Average Sales Price: $740,717

2009

• 307 Homes Sold During 2009
• Average Sales Price: $591,192

Based off of 2008 – 2009 sales activity, there was a 10% drop in sales in 2009. Overall prices are down 21% in Montclair, NJ in 2009 when compared to 2008.

Charts below will show 2008-2009 activity.  Click to enlarge

• In December, 2008 a total of 21 homes sold in Montclair with an average sales price of $627,416.
• In December, 2009, a total of 34 homes sold in Montclair with an average sales price of $538,800.

Absorption Rate:  An absorption rate indicates the number of months it takes to sell the current inventory at the present rate of sales. As of January 1, 2010, there are 115 Homes for sale in Montclair.  During December 2009, there were 34 homes that sold.  The rate of absorption in Montclair today is 3.38 Months.  A year ago today, the absorption rate of Montclair was over 6 months.

As the charts above indicate, prices have plummeted from peak values.  Sales activity is up and prices are beginning to stabilize.  Assuming Montclair experiences any further downward value adjustments, the tradeoff would be the First Time Homebuyer Tax Credit and Low Mortgage Rates as we do not anticipate any further drastic price adjustments.  The combination of the 2 should negate the Catch 22 affect, thus creates an opportunistic time to buy real estate in Montclair.

A previous report written by us in February 2009 pointed to bargain homes in Montclair listed at under $400,000.  We mentioned the state of the market as a reason why you were seeing great deals in Montclair.   Today, those homes are long gone and the only homes listed in this area for under $400,000 are far more inferior than the ones we referred to.

Taking into consideration the convenience to New York City, infamous downtown district, expansions of Montclair State University, and beautiful Upper Montclair section of the Township, we anticipate that prices stagnate over the course of 2010.  We have seen a healthy improvement in affordability which is the reason for increased sales. With a more affordable market within the NYC metro area, we expect prices to stagnate during 2010 and begin historical appreciation trends in Q1 2011. That said, our prediction is that Montclair provides a very good opportunity to buy as it seems the market is tinkering with the bottom of the housing market.  Watch Q3 of 2010 as the First Time Homebuyer Tax Credit should expire.  Lower real estate prices will predominantly be the driving force behind the Montclair housing market.  With unemployment expected to peak and smoke beginning to dissipate in the recession, our crystal ball should be pretty close!

If you are looking to buy or sell real estate in Montclair, look no further than NJ Real Estate Guys.  Scott Allan, founder, is from Montclair and takes great pride in the real estate market and his unique knowledge and service to both buyers and sellers.  Contact Scott today for a consultation.  We’d love an opportunity to work with you on your real estate needs!

November 2009 Report | Montclair NJ Real Estate (statitstics comprised from Garden State MLS and based on Single Family Homes)

As most of you know, I am from Montclair.  Went to college there, and know every street in fine detail.  So let’s do a report on the housing market, homes for sale, etc.  Montclair has a wide range of homes consisting of beautiful Georgians, Vintage Victorians, cottages, and spacious colonials.  The housing market has been active lately, a nice sign for the local real estate market.  If you are looking to sell or buy a home in Montcl

All sales cover the last 60 days and information provided is from the Hudson County MLS.  You can click on the links of the buildings to access the building’s exclusive pages where you can learn all you need to know about them and see up to date available condos for sale.

Click here to see a full Hoboken Condo Sales Report

Hudson Tea Building:  2 Condos sold.  A condo on the 2nd floor was listed at $469,000 and the sales price was a much lower $345,000 or $456 per square foot.  This was a short sale. 

The second condo, a studio, had more upgrades and a better view than the first condo.  Listed at $499,000, the actual sales price was $470,000, or $639 per square foot. 

Garden Street Lofts:  3 Condos have sold.  The first condo, a 1 bedroom, 1.5 bathroom unit was listed at $607,500, and eventually sold for $545,000 after 561 Days on Market.  $477 per square foot.

The second condo, another 1 bed, 1.5 bath unit was listed at $660,000, and eventually sold for $545,000 after spending 531 days on the market.  $519 per square foot.

The third condo, a 1 bedroom, 1.5 bath unit was listed for $625,500, and eventually sold for $575,000 after spending 566 days on the market.  $503 per square foot.

Maxwell Place:  2 Condos have sold.  The first condo, a 2 bed, 2.5 bath unit was listed at $1,349,990 and eventually sold for $1,204,195 after spending only 26 Days on the Market.  $681 per square foot.

The second condo, a 1 bedroom, 1.5 bath unit was listed for $650,000 and sold for $625,000 after spending 185 Days on Market.  $583 per square foot.

Sky Club:  1 Condo sold.  This 2 bedroom 2 bathroom condo was listed for $494,900 and sold for the asking price of $494,900 after spending only 20 days on the market.  $391 per square foot.

Harborside Lofts:  1 Condo sold.  This 2 bedroom 2 bath unit was listed at $959,900 and sold for $867,500 after spending 176 days on the market.  $478 per square foot.

Vesta Hoboken:  4 Condos have sold.  The first, a 2 Bed 2 Bath unit was listed at $498,000 and sold for exactly that after 270 days on the market.  $434 per square foot.

The second condo, another 2 bed 2 bath unit was listed at $585,000 and sold for $526,500 after spending 293 days on the market.  $461 per square foot.

The third condo, a 2 bed 2 bath unit was listed at $595,000 and sold for $563,000 after spending 48 days on the market.  $434 per square foot. 

The fourth condo, a 3 bed 3 bath unit was listed at $1,320,000 and sold for $1,080,000 after spending 213 days on the market.  $488 per square foot.

So there you have it.  There were 13 sales total in the last 60 days in these buildings over the last 2 months.  As you can see, there is negotiation room in many of the buildings and the Hudson Tea seems like a great building to look into if you are looking for a solid deal for your own home or investment condo.  Please call us at 877-688-7582 to set up a showing appointment in any units.  Please feel free to browse our “Advanced Search” in our MLS/IDX tool on our site.  You can specify the building or address you are looking for to see all availability.