Home Buyers: Are We There Yet? Regional Edition: NJ Shore (c) Prudential Fox and Roach, REALTORS®

1. The Chairman’s Report
A Message from Lawrence F. Flick, IV, Chairman and Chief Executive Officer
Prudential Fox & Roach, REALTORS® and The Trident Group
SUMMER 2011 REGIONAL EDITION: NEW JERSEY SHORE
“Are We There Yet?”
Summer’s here and for many Americans that means we want to make sure we get the “best possible” deal.
filling up the gas tank, checking the tires and venturing I understand these reasons for waiting, but eventually,
down the highway. Whether driving to the mountains the desire to own the home we want overpowers our
or shore, or setting off on a cross country adventure, hesitancy. It is then that we make the decision to move
we’re eager to get to our destination. Perhaps you forward with our lives. I believe we’ve reached that
remember the road trips you took as a child, or those point — we’ve made our journey and are now pulling
you’ve taken with your own children. Either way, our up to the curb!
journeys are often accompanied by the refrain “Are we
there yet?” IS BUYING A HOME STILL A
GOOD INVESTMENT?
“Are we there yet?” Lately I hear this question from
consumers wondering if our real estate market has When Case Shiller released its latest Home Price Index,
reached a turning point. My answer is: Yes — we the news media was flooded with talk of a double dip in
are there! home prices. Case Shiller obtains its information from
transfer tax data and compares the consecutive selling
We’ve been waiting…waiting for the economy and real prices of the same properties. While it is a useful index
estate market to turn around. Meanwhile, we’ve put our for understanding some aspects of real estate trends, it
homeownership dreams on hold. There are two reasons can also be misleading if not used in context of local
for this. First, we worry about the employment outlook market trends. The press highlighted areas like Detroit,
and our ability to continue meeting our financial MI and Las Vegas, NV where 2010 home values were
obligations. Second, before we start to look for a home, less than or equal to what they were in 2000.
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2. New Jersey Shore Area Since 2000: up 97% Since Peak: down 21.13%
Case-Shiller® Home Price Index: Single-Family Aggregate Index, (Index, 2000Q1=100), SA
Source:Fiserv, FHFA, Moody's Analytics 5/09/11
Cape May County, NJ
But, in the New Jersey Shore region, this simply is until after it has begun to rise. Prices in our region have
not true! Yes, prices have declined since their 2007 been bumping along a bottom since 2009.
peak, but they remain well above 2000 values, as
illustrated above. What’s more, if we remove foreclosures from the
picture, prices have been steady across the country.
In the past ten years, the average sales price in our area According to Core Logic, another source of data, overall
has also increased significantly, as shown below. home prices fell 7.5% in April versus the same period a
year ago. But when distressed sales are taken out of the
MLS Average Sale Price: 2000 vs 2010 equation, prices fell just 0.5% in that time. In our area,
AREA 2000 Avg. 2010 Avg. it is important to note that less than 1/2 of 1% of all
Brigantine $166,393 $418,464 households are in the foreclosure process, yet because
Margate* $164,040 $407,603
the media doesn’t highlight regional differences, many
Ocean City $312,798 $563,941
Upper Township $149,873 $291,023 perceive that our market is also distressed. The reality is
*Margate, Ventnor, Longport, Atlantic City that we are faring better than much of the country:
Our market is not suffering from a foreclosure/shadow
inventory hangover.
ARE REAL ESTATE PRICES AT THE BOTTOM?
Even if prices were to fall a bit more to what we imagine
No one really knows that a market has hit “the” bottom must be rock bottom, consumers need to consider
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3. Our area is strong
because our local economy is diverse with
significant concentration in “eds, meds, and pharma.”
current interest rates. Earlier this year, mortgage rates, ISN’T IT HARD TO GET A MORTGAGE NOW?
while still low, rose to 5.25%. At publication of this
report, interest rates unexpectedly decreased once again The pendulum has changed direction away from loans
to 4.5%. For a $250,000 mortgage, the lower rates will without income or asset verification. The fact remains
produce a savings of $41,000 over 30 years. that those who are employed and have average credit
can get a mortgage. With proof of income and assets,
IS THERE GOING TO BE A DOUBLE DIP applicants today can secure a mortgage at a good rate.
RECESSION? FHA loans are still available with 3.5% down, and 5%
conventional loans are commonplace. Your Trident loan
As far as the recession is concerned, it’s been a long consultant can help determine what program works best
road — bumpier and more uneven than we anticipated. for you.
But all signs point to a sustainable recovery and most
economists do not believe that there will be a double WHY NOW IS THE TIME
dip recession. Employment is a key factor. So far this
year, the economy has added almost a million jobs. Every buyer has an individual situation and motivation
Manufacturing is also strong. Events in the Middle East for making a purchase. If your personal circumstances
and North Africa have caused gas prices to spike, but dictate a move, here are four excellent reasons why the
they are beginning to come down again. time to buy is now:
Our area is strong because our local economy is • Affordability — Homes are more affordable now than
diverse with significant concentration in “eds, meds, since the industry started keeping records in 1970.
and pharma.” Overall, there’s been positive growth • Selection — There’s a great selection of homes for
since July 2009 and I expect this to continue. The today’s buyers.
Moody’s Analytics report for Cape May County notes • Low prices and interest rates — Once the majority of
that the area “will recover slowly over the near-term consumers begin to feel confident again and enter the
as consumers grow more confident in their finances. market, both prices and interest rates will rise.
The recent change in federal tax withholding will boost • Pent up demand — Households waiting to form will
consumption throughout the Northeast, benefiting begin to unleash many new buyers into the market.
tourism and local spending. (The area’s) long-term Also, a recent survey noted that 65% of renters said
comparative advantages stem from its tourism industry they were planning to buy a home soon.
and location amid densely populated urban areas.”
Homes are more affordable now
than since the industry started keeping records
in 1970.
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4. WHAT IF I NEED TO SELL? ARE WE THERE YET? YES!
We are in a buyer’s market, but homes are selling. Last Don’t wait until the road is jammed with traffic.
year, 48,000 homes were sold in our market area. Why Be among the first to arrive and do take your
did these properties sell when others sat on the market? trusted guides with you: your Prudential Fox &
The two main reasons were price and condition. Roach sales associate and Trident loan consultant.
They are dedicated professionals who can help you
• Price — When selling your present home to buy navigate along the way. The long journey is over
another that better meets your needs, it’s important and we’re pulling up to the curb. We can answer
to price your home correctly. Keep in mind that the question “Are we there yet?” with confidence.
although it may sell for less than it did in 2006, the Yes — we are there!
home you buy now will not cost as much either.
• Condition — There are a lot of houses on the
market, so it is important to make sure that yours
stands out. Your Prudential Fox & Roach sales
associate will advise you on how to make it the most
appealing to potential buyers. Lawrence F. Flick, IV
Chairman and Chief Executive Officer
Prudential Fox & Roach, Realtors® and The Trident Group
We can answer the question
“Are we there yet?” with confidence.
Yes – we are there!
An Independently Owned and Operated Member of the Prudential Real Estate Affiliates, Inc.
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