They have named me Matias! 
I have come forth having benefited from all that has been lived. 
I know I am Free,
I know I am Powerful,
I know I am Good,
I know I am Love,
I know I have Value,
I know I have Purpose. 
Please remind me when you meet me -
"You Are Loved. All is Well!"

The Hunterdon County real estate market continues to evolve and change consistent with the expectations of those who have chosen to participate in the market.  There are great opportunities for Qualified Buyers to purchase a home and Sellers must remember homes continue to sell when they are priced at there Buyer perceived market value.



The Hunterdon County real estate market has seen 1560 homes listed for sale in the first five months of 2008.  396 of those homes have closed escrow during this five month period which represents 25.38% of the available inventory.  The average sale price of the homes sold during this period was $466,815 which was done from the average sale price at market peak (2006) of $493,995.  The inventory levels have averaged 19.5 months during this five month period.   At the current rate of adsorption, 5.26% of the inventory per month, in some townships, particularly at the higher price points, there is over 3 years of home inventory for sale.



The home inventory levels for Hunterdon County in 2008 show a clear trend of increasing home sales as we entered the 2nd quarter of the 2008.  The market continues to correct but homes perceived by Buyers as a value are selling while the over priced inventory is being over looked by the generally well informed potential Buyers.  The desire for home ownership lives on even though the real estate market has changed focus and Buyers have taken control of the market momentum. 

The real estate market is like all other markets that have experienced a long aggressive expansion, they must correct, which allow the market forces to come into balance.  The real estate market has begun to more accurately reflect the current economic climate.  The dollar has weakened as the cost of energy has adjusted to reflect our current economic expectations.  The future of real estate is bright but some change in our thinking and focus is needed to allow the new opportunities to unfold.

"Remember that happiness is a way of travel, not a destination."........Roy Goodman

Download | Duration: 00:03:23

  Click to hear Podcast Summary

The Somerset County real estate market continued to adjust to economic pressures as Buyers moved slowly and cautiously in the pursuit of a home.  The 2007 inventory level reached 10,000+ homes again while sales volumes fell to a seven year low with only 3900 homes closing escrow. 



The sales volume reached a new low in 2007 with only 39% of the homes offered for sale closing escrow.  This number reflects the true sentiment of Buyers in a market that continues to correct as economic uncertainty and a possible recession is the drum the media continues to beat.  It is a great time to purchase a home.

The average price of homes in Somerset County has been reasonably stable over the last three years.  The major market corrections have been in the larger homes, homes with dated amenities, homes in poor condition and difficult location.  Buyers are great comparative shoppers, they search out the value in the market place and ignore those properties that are perceived as over priced.  Homes will continue to sell in 2008 but the market place will become increasing more competitive and only those homes that reflect there true value in the offering price will sell.

The value of homes in Somerset County have held the level of appreciation experienced during the period of aggressive market expansion.  When we compare the current average home price level to the price level we would observe if the real estate market had appreciated at the traditional average level of 5% per year we see that market continue to hold a significant fraction of the home equity created during the boom.



If economic conditions remain stable and nothing upsets the mood of the buyers further the real estate market should show signs of home prices stabilizing in 2010-2011.  Homes will continue to sell in 2008 and there will continue to be values throughout the county.  It is a great time to buy and if you want to sell or need to sell move ahead with informed knowledge of the market you will be competing in.  The informed council of a knowledgeable Real Estate Professional could help you retain more of the home equity appreciation created during the real estate market boom.

"Knowing what you want is the first step to getting it.".....Louise Hart

Download | Duration: 00:06:05

  Click to hear Podcast Summary

The real estate market in Hunterdon County continued to correct in 2007.  The inventory levels reached 4700+ homes, a historical high, sales volume remained similar to 2006 with 1455 homes closing escrow in 2007.  Homes continued to sell as the market adjusted to the reluctant attitude of Qualified to



to commit to purchase.  The Buyers who are ready to purchase a home have significant inventory to select from and they are approaching the market with a keen sense for value.  It has become increasing difficult for Sellers to attract a Qualified Buyer.  Sellers must have their homes in the best possible condition at or slightly below market value to take full advantage of the limited number of showings they are likely to get during the listing period.  Sellers that fail to recognize the correcting nature of the current market frequently finding themselves frustrated and disappointed as they experience the true reality of this Buyers market.

The Seller reality of the current market is shown dramatically in the graphic above.  In 2007 only ~30% of all the homes offered for sale in Hunterdon County were able to attract a Qualified Buyer and close Escrow.
Homes are selling but only when the offering price is consistent with the ever changing true market value. 

The average sale price of homes in Hunterdon County is correcting faster than the data shown indicates.  The reason is that the real estate market is a complex mixer of older and newer homes, that vary in both size and amenities.  The high end homes are correcting faster than the starter homes in part due to the contraction in the number of new jobs being created in New Jersey for people who would typically be looking at homes in this price range.  New Jersey may be pricing itself into economic recession as both business and property taxes sore higher and higher.  The message has yet to reach the ears of those who could take leadership but the evidence continues to suggest that without strong business grow the real estate market is going to be very slow to recover.




The real estate appreciation in Hunterdon County has been significant.  The rate was much higher than the historic bench market number of 5% per year.  As the market corrects over the next 2-3 years a significant fraction of the apparent appreciation will be given back as home values adjust to the price they would have been at if traditional appreciation rates had prevailed.  We may reach these pricing levels in 2010 -2011 if there are no significant disruption of the current gradual correcting trend.

Real estate will continue to sell in 2008.  Selling will be a matter of pricing properties at there current market value.  The challenge is knowing what the market value is before you enter the market.  Over priced homes will not sell.  If you want to sell or need to sell get the opinion of a Real Estate Professional that knows your market, it could pay you significant dividends.

"Life is a paradise for those who love many things with a passion!"......Leo Buscaglia

Download | Duration: 00:04:15

  .....Click to hear Podcast

The Hunterdon County real estate market continues to cool as the weather turns colder, however homes continue to sell as Qualified Buyers sort through the available inventory looking for the best values.  The adsorption rate dropped to 5.11% in November creating an inventory level of 1,526 homes.  At the current rate of housing sales we estimate that there is approximately 19.6 months of inventory in Hunterdon County.  Based on the available data for 2005 and 2006 for comparison it is clear that the housing market in Hunterdon County has yet to create a stable bottom. 

 So far in 2007 there have been 3,453 homes listed for sale in the GSMLS, 1,322 of those homes have received offers and gone into attorney review and 1,212 homes have closed escrow.  The number of sold homes represents 35.1% of the available inventory which is down slightly compared to the same period in 2006.

The market slow down is clearly evident from the data presented in the graphic above.  In November the number of sold homes dropped to 78 in all of Hunterdon County which represented the second slowest month of 2007.  The market is likely to reflect minimal activity in December and January as Qualified Buyers carefully scan the available home inventory from their computer looking for the best values in the area.  The internet continues to be the most complete and effective source of information on homes available in Hunterdon County.  We encourage you to sign up for our free Market Snapshot to receive the most current housing information available.  If you would like help please give us a call or send us an email we are happy to answer any questions you might have about the New Jersey Real Estate Market. 

Seasons Greetings from Joanne and JM(Mike)Drake - The Drake Team - RE/MAX Preferred Professionals

Download | Duration: 00:05:22

"Today, let's give thanks for life.  For life itself.  For simply being born!" .....Daphine
Rose Kingma

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"The thing always happens that you really believe in:  and the belief in a thing makes it happen."......Frank Lloyd Wright

We received an email from the New Jersey Association of Realtors which contained this important message:

NJAR received notification late last night that a bill which would allow municipalities classified as "cities of the first class" to impose a local realty transfer fee (RTF) in the amount of $.50 per $500 of consideration is scheduled for a hearing on Monday, March 5 by the Assembly Housing and Local Government Committee.

"And if not now, when?".......Talmud

The real estate market has been changing character for last 12-24 months as Buyers and
Sellers have struggled to find new common ground that will allow each to meet their needs
and fulfill their desires.  Raritan Township in Hunterdon County, one of the stronger real estate
markets in the county, has experienced a noticeable change in both available housing inventory
and sales volume in 2006. 


We have seen a normally strong demand for homes soften as the attitude of Buyers has become
much more demanding as inventory has grown and the homes offered for sale have remained on
the market much longer than many would like to admit.  Home values in Raritan Township had
been appreciating each year since 1999 reaching a peak in 2005.   

The average sale price in Raritan Township nearly doubled in six years.  Property taxes in the
township also have risen steadily over the same period with the township re-evaluating property
values in 2006 just as the correction in the real estate market was an undeniable reality. 
As the township captured accessed values near the peak of the market, home sales slowed
significantly and the sale price of homes began to adjust to reflect the reluctance of
Buyers to purchase.


The price of homes in Raritan Township had been rising more and more dramatically each year
since 2001.  In 2004 and 2005 there was more than a +15%  increase in the average sale price
of homes.  A rate of appreciation significantly higher than the Hunterdon County average for the
same period.  At the close of 2006 it was clear that prices had begun to correct and the overall
impact of the changing mood of Buyers on Raritan Township real estate has yet to fully
appreciated asmarket values are correcting at different rates for different price ranges.  What is evident is the contraction in sales volume and increase in the number of unsold listings based
on the 2006 market data for Raritan Township.


The data for the last seven years shows that 2006 was the weakest market with more than 55%
of the properties offered for sale going unsold.  Home inventory levels remained around
10 months through out  2006 jumping to 17 months for January 2007.  The January 2007 inventory
level is higher than any month in 2006 and if the market activity continues to reflect the obvious reluctance of Qualified Buyers to purchase, Sellers will be forced to make pricing concessions to make homes in the township more attractive and affordable.  In addition, property taxes in Raritan Township have become a concern for many potential home Buyers.

   

The Raritan Township real estate market represented about 16% of the available home inventory
and about 23% of the homes sold in Hunterdon County in 2006.  The sale price distribution for the
319 homes sold in Raritan Township in 2006 has somewhat broader sale price distribution than
the county.
 


Raritan Township offers homes varying in price from condominiums to very large single family
homes.  The market activity for homes below the median sale price has not slowed as dramatically
it has for the larger single family homes priced above the median sale price.  The gap in market
activity between the two ends of the pricing distribution curve is likely to widen if the current
migration of younger and older citizens out of New Jersey continues over the next 2-5 years. 
Housing affordability remains a challenge throughout the State of New Jersey. 

"If you think you can do a thing or think you can't do a thing, you're right"...Henry Ford

The real estate market in Hunterdon County continued to weaken during 2006.  The issue of housing affordability was on every Buyers mind.  The inventory of homes available remained high and the number of Quailified Buyers making offers to purchase has decreased significantly over the last 18 months.
The graphic above clearly shows how few homes sold in 2006.  What is most striking is the lack of a spring market.  Buyers did not rush in to purchase homes as the weather turned from gray and cold to warm and sunny.  The number of homes selling each month was nearly unchanged throughout the year.


The adsorption rate was relatively weak with inventory levels remaining around 12 months.   The market activity for 2006 is reflected in the figures (GSML Service - data deemed reliable but not guaranteed)  which show how few of the homes offered for sale sold:
      
                                                         4470 Homes Listed 
                                                         3683 New Listing
                                                         2331 Under Contract
                                                         1406 Closed Sales

These sales figures represent a market in which a limited number of Qualified Buyers searched through a large inventory of homes for the best value availabe and ignored properties which didn't measure up to their demanding standards.  The mood is likely not to change as we move into 2007.  The market has not slowed uniformly over all price ranges.  The sales data shows that the most demand for homes was at a price point well below the median home sale price in Hunterdon County.



Sellers who are hoping to attract Buyers in the high-end of the market are likely to experience a much different reality than those offering homes below the median price point.  The current inventory of higher priced homes could supply the current demand well into 2008-9.  New Jersey continues to see a re-distribution of the jobs where many of the higher paying positions which are leaving the state are being replaced with lower paying service positions as well as a significant expansion in the number of new positions in local and state government.  New Jersey must attract new businesses offering professional level positions if the high end real estate market is to be revitalized.


The real estate market in Hunterdon County is changing and the rate of change has increased significantly in last 18 months.  The challenge facing real estate professionals is attracting Qualified Buyers to look at properties. 
 
While the average sale price appears to have stabilized in 2006.  Some townships in Hunterdon County have corrected more than others if you would like specific information on your township and neighborhood market please give The Drake Team a call we would be happy to help you.  A number of townships have been updating their tax database and re-evaluating property values.  In the past homes sold for significantly more than their accessed value but now in many areas home values have corrected to a level below their current accessed value.  This has been frustrating for Sellers who have entered the market with the expectation that the sale price of their home would be at least the accessed price and were forced to accept less.

The real story is in Hunterdon County is the realization that only a fraction of the homes offered for sale in the GSMLS were able to attract Qualified Buyers willing and ready to purchase.  In 2006 only 31% of the homes offered for sale were Sold leaving almost 70% of the listed properties un-sold.  This represents how dramatic the change has been in the attitude of home Buyers.

Do people still want to own their own home?  Yes!  Do people want to live in Hunterdon County?  Yes!  Are people willing to pay the highest property taxes in the Nation?  Are people willing to accept living in communities that are unable to offer the majority of the tax payers:  city sewers, city water, street lights, side walks.........and still pay the highest property taxes in the Nation?  Housing must be preceived by potential Buyers are afforable.  The challenge facing everyone is how do we make living in New Jersey affordable to more people?  Can we get local and state government officals to talk about this problem in public forms? 

"What lies behind us and what lies before us are small matter compared to what lies within us"......Ralph Waldo Emerson

As with most things the future of Real Estate in our area is difficult to predict accurately.  There are many opinions and forecasts by experts, many of whom have no real experience buying and selling residential properties and therefore may lack a true sense of the how the mood of Buyers and Sellers continues to influence market conditions.  On January 12, 2007 Glenn Roberts Jr. published an article in Inman Real Estate News  entitled, "Real estate rebound likely in second-half '07', economists say."  and on January 15, 2007 the same author published, "Housing weakness will continue this year, says Fitch report."  

In the January 12th article, chief economist for Freddie Mac, Frank Nothaft, was quoted by Roberts to say, "Affordability plummeted from late 2005 through 2006.  We saw really an affordability crisis in high-cost markets across the country.  This has been lessened though, as mortgage rates came down from about July to December, and prices have 'stabilized or dropped' in the high-cost markets."  Nothaft was a panelists at a recent conference in New York City entitled, Real Estate Connect NYC Conference.  He continued to remark that, "Ample liquidity in the mortgage market, while alleviating the affordability pinch, has led some borrowers to take more risk than perhaps they should have in financing their homes.  Unfortunately some loan products are not right for every single consumer or every single borrower out there.  There is a large growth in the more-volatile subprime lending market.  We've started to see some pickup in subprime default rates recently and I think that will continue in 2007."

Another panelist at the NYC conference, James W. Hughes, dean for the Edward J. Bloustein School of Planning and Public Policy as Rutgers University, offered his opinion on the job growth which is a critical element of the recovery of the real estate market.  Hughes said that, "Job growth should remain below average for the first half of this year.  Employment growth did rebound somewhat in the fourth-quarter 2006 to a level that was on par with the rate in fourth-quarter 2005.  In terms of job growth that's going to continue to support the housing market through 2007 unless there is some shock to the economy."  Hughes did stress his concern about the long term stability of the United States position in the global economy and he said that, "The rest of the world has been lending us $1billion a day in order to support our consumption habit - that can't go on forever.  At some point they're not going to lend to us if we become a risky investment.  Whether we can continue to have the kind of account deficits we have is problematical."  Hughes suggests that global outsourcing could poses a real economic threat to our nation if ...."Our knowledge-based industries succumb to the same trends that happened in manufacturing?  We're going to face intense competition from Eastern Europe and India based on cost factors.  We have to invest in our educational infrastructure in this country if we're going to remain on top."

A third member of the panel was Susan Wachter, professor of real estate and finance at University of Pennsylvania and co-director for the institute for Urban Research at the university's Wharton School.  She commented that "the withdrawals of mortgage equity have been a driver for the economy, though this engine is cranking down.  We're tapped out.  While this level of withdrawals in not likely to grow, it's uncertain how much it will decline."  Watcher's opinion is that housing stats for 2007 will resemble 2006 and the major risk is that the economy will stall in 2007 increasing the risk of inflation or even a recession.  On a positive note, she said, "People still have to live somewhere.  I think we're going to be surprised about how prices actually hold up in this market."

If I understand the views of these experts they believe that the housing market will recover in the second half of 2007 if:  mortgages rates don't rise significantly, we continue to have job growth and the economy doesn't stall resulting in increased inflation or a recession.  

In the second article, "Housing weakness will continue this year, says Fitch report", Roberts comments on the recent "Chalk LIne" report published by the Fitch Ratings service (access to the report is limited to subscribers).  The article points out that the weakness in the real estate market is likely to continue into 2007 because of unresolved issues relating to:  housing affordability, expanded home inventory, and the conservative mood of homes buyers.  Roberts comments about the report, "Though not likely, the housing downturn could easily extend another year if an economic recession develops before the housing downturn hits bottom and housing continues to contract rather sharply." 

Housing affordability continues to be one factor that is recognized by many to be a critical element driving the market.  One component that influences housing affordability is the criteria used by lenders to establish the amount of money a buyer can borrow to purchase a home.  Recent trends show that some lenders have moved away from the traditional 25-28% of monthly income to 35-50% of the Buyers income.  This practice may be putting many Buyers in a very dangerous position.  If property taxes and energy costs rise sharply home owners could find themselves stretched beyond their means.  This would force many to sell into an already weak and correcting housing market. 

In my opinion, finding ways to make homes more affordable is critical to the recovery of the housing market in New Jersey.  The answer to making more homes affordable is not to encourage Buyers to take on excessive mortgage debt beyond the traditional limits.  We are likely to see energy costs (heating, electric and gasoline), property and school taxes, sales tax and personal income tax rise forcing anyone interested to owning a home to generate more income to keep up.  If the rise in the costs associated with owning home in New Jersey can not be limited or slowed the rate at which people are exiting the state will accelerate making it even less likely that the real estate market will show any significant recovery in 2007.