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[quote="Cranbury Press"]Home sales still steady
Property priced right is moving well
Thursday, October 23, 2008 11:04 AM EDT

The burst of the housing bubble has caused a decrease in the price of properties, but area homes priced at market value are still selling at a steady pace, according to Realtors in South Brunswick, Cranbury and Monroe.

Realtors also said that the frozen credit market, which the U.S. Congress has attempted to thaw with its $700 billion bailout of investment banks, has not stopped qualified buyers from receiving mortgages, though subprime lending to risky clients has dried up.

James Hughes, dean of the Edward J. Bloustein School of Public Planning and Policy at Rutgers University, said that New Jersey has not been as hurt by the housing bust as some other areas of the nation.

”There is tremendous variation right now. Florida, Arizona, California and Nevada were the epicenters of the housing boom, and they are now the epicenters of the housing bust.” Dr. Hughes said. “Those markets have virtually collapsed because they were largely based on speculation. New Jersey did not have the speculative excesses of other places, so we are being spared some of the big problems.”

In addition, Dr. Hughes said that properly priced homes are still selling.
   Local Realtors say that one of the more difficult parts of their job lately has been getting sellers to understand what the market value is for their home.

”A lot of people have watched the news and thought that value of everyone else’s house has gone down but theirs. I guess it is human nature,” Christopher Geist, associate broker/owner at Century 21 in Monroe, said. “The peak of the market was in ‘05-and-a-half, since then home sales have gone down about 30 percent every year and prices have gone down a 20 percent overall. We advise our sellers to be very aggressive in their pricing, because if they overprice now it won’t sell, and they might have to drop it down even further two months down the line. At market range though, houses priced properly will sell quickly.”

Mr. Geist said that most of the homes he sees priced within market range in town are selling within 60 days of the listing for about 96 percent of the list price.

Donna Mar, broker/owner at Remax Classic in Dayton, agreed.

”We help sellers figure out the right price for their homes, and show them the recent prices,” Ms. Mar said. “It started happening about two years ago, and it has been a steady change. There are some disappointed looks from people, but they know what’s going on. It’s all over the news. If it is priced right though, it is selling.”

Claudia Stepien, business sales manager at Weichert Realty in Kendall Park, said most of the people in the market are motivated buyers.

”There are no tire-kickers out there right now, anyone in the market is looking to buy,” Ms. Stepien said.

Marianne Jarvis, a sales associate at Century 21 in Cranbury, said that things are better than they have been portrayed.

”I think the media has made it out to be a much more dreadful place than it actually is right now,” Ms. Jarvis said. “Some people have had resistance to dropping their prices, they say they just want to see what they can get. We tell them that if they do that their home is just going to sit. A home that would have gone for $1.2 million is now in the $900,000 range. Some others have dropped $30,000 or $40,000 in price. If they drop the price it will get offers though, and in many cases multiple offers.”

Contributing to the slowing of home sales throughout the nation has been the tightening of credit standards as subprime loans have turned toxic. Subprime lending was the practice of some mortgage security companies of extending credit to those who would not qualify for a traditional mortgage.

”Essentially what happened was that people’s income was not growing, but their ability to buy a house was because interest rates were lowered, along with credit standards,” Dr. Hughes said. “It was a national phenomenon. The country’s home ownership rate went from 64 percent to 69 percent, and almost all the people in that 5 percent should not have been home owners. They were calling the loans exotic for a while, but now they are being called toxic.”

As the mortgages have begun to go bad, several large lenders, including Lehman Bros. Inc., have gone out of business, casting doubt on how well capitalized the nation’s large lending institutions are. The doubt has trickled down to homebuyers, who are not sure how available credit is for purchasing a home.

”I have had a lot of people have been coming to me and asking if it is really hard to qualify for a loan right now,” Mr. Geist said.

While the doubt exists, the local real estate brokers say clients seeking traditional mortgages are still able to get them.

”I think it is a bit of a misnomer out there right now that people can’t get credit. You just have to be able to qualify for it, which you haven’t had to do for the past eight years,” Mr. Geist said. “It is no different than the early 80s or the mid 90s. The last eight years have been the exception, not the rule.”
   Ms. Jarvis said she has had no problem with clients qualifying for credit.

”I have not had any clients that have encountered credit problems with regular, conventional mortgages,” she said.

Ms. Mar said that she has seen more people shying away from online mortgage brokers.

”There are more people going with banks than some of these online companies, I think people are feeling like they want a good, solid bank,” Ms. Mar said. “People with good credit ratings are still able to obtain mortgages; the tightening has been on people who couldn’t afford them anyway.”

Dr. Hughes said that the country is likely to go through an economically lean period while the housing and credit markets are correcting.

”Looking forward, better lending standards have already begun, and I think subprime loans are probably history for a long time. Lending standards will go back to how they were in the mid-90s, and lending institutions will protect themselves,” Dr. Hughes said. “There will be a significant period ahead, and possibly a long recession. It could be 2010 or 2011 before things get straightened out, and even that is not guaranteed.”

http://www.packetonline.com/articles/2008/10/24/cranbury_press/news/doc49008c1586881417585851.txt[/quote]

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