The continuation of this robust seller’s market creates certain dynamics that buyers need to factor into their home purchasing process.
Competition for properties is very real in most markets.
In February 2012, the number of homes for sale in New Jersey was 48,526 the percent of list price received was 93.2% and the average days on the market was 124 days.
In March 2017, the number of homes for sale in New Jersey was 36,651 the percent of list price received was 97.0% and the average days on the market was 84 days.
The danger in such an environment is to feel pressured into purchasing a house that is not right for the buyer because they are afraid of missing out.
As mortgage applications for home purchases continue, the attitude toward buying a house is a seller’s market must factor in competition for the same property.
No one ever lives in an ‘average listing price.’ Just because listing prices are rising, affordability and other factors such as school districts and taxes must set realistic boundaries.
Zillow reported that as of March 2017, the median list price for a home reached $245,000, up from $229,000 from March 2016. Those numbers are skewed by such regions as Seattle, where home prices are increasing by a full percentage point every month.
The emotional madness is often driving buyers to spend more because of other buyers offering above asking offers, foregoing inspection, and often forgetting closing costs, which can add up to 3% of the sales price. That is just irrational buyer madness.
According to Zillow, 40% of first-time buyers max their budget when purchasing their first home. Unfortunately that makes for a very uncomfortable first few years, when repairs happen and taxes and insurance come due.
What is especially sobering are the high property taxes that are paid in New Jersey. New Jersey owners pay the most nationally, with a mean effective property tax rate of 2.11%.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.