Homeowner Equity Closes in on $5 Trillion

The number of borrowers ‘underwater’ fell in the first quarter of 2017 to 1.8 million borrowers. This represents a drop of 35% since this time in 2016, and a reduction of 16% in just the first quarter of 2017 alone. Considering that the spring buying season is historically the strongest of the four quarters, many experts anticipate that as the appreciation of home values continues for the balance of 2017, this figure of 1.8 million underwater will fall by possibly another 8% or 150,000 mortgage holders.

According to the Black Knight Mortgage Monitor report, homeowner equity increased by $695 billion over the last 12 months, increasing to just under $5 trillion as of the end of Q1 2017.

This marks the first time that underwater population has fallen below 2 million since 2006. This number is still significantly above the low mark of 750,000 borrowers who were underwater at the end of 2005, according to Black Knight.

Home equity is an asset that comes from a homeowner’s interest in a home or, to put it another way, home equity is the portion of your property that you truly own.

Many people take advantage of the equity in their home by borrowing against it for repairs or home improvements.

A home equity line of credit (HELOC) allows you to borrow funds based upon the equity in your home, much in the same way as a credit card except you are borrowing against yourself. After a number of years, your draw period ends, and you’ll go into a repayment period where you pay off the amount of the debt.

Top 20 New Construction Towns in New Jersey

The state issued 23,000 permits last year for new residential construction, according to data from the Department of Community Affairs. That’s up from 19,000 the year before. These are the municipalities that had the most new homes started in 2016.

1. Jersey City, Hudson County issued 3,174 permits in 2016.
2. Lakewood, Ocean County had 710 permits issued in 2016.
3. Elizabeth, Union County had 674 permits issued in 2016.
4. Fort Lee, Bergen County had 667 permits issued in 2016.
5. Secaucus, Hudson County had 636 permits issued in 2016.
6. Aberdeen, Monmouth County developers received 594 permits in 2016.
7. Weehawken, Hudson County had 558 permits issued in 2016.
8. Harrison, Hudson County had 456 permits issued in 2016.
9. Toms River, Ocean County received 442 permits in 2016.
10. Franklin, Somerset County issued 432 permits in 2016.
11. Woodbridge, Middlesex County issued 386 new home permits in 2016.
12. Monroe, Middlesex County received 351 permits in 2016.
13. Jackson, Ocean County had 292 permits issued in 2016.
14. Absecon, Atlantic County issued 279 new housing permits in 2016.
15. Cliffside Park, Bergen County issued 254 permits in 2016.
16. East Orange, Essex County issued 250 permits in 2016.
17. South Brunswick, Middlesex County had 230 permits issued.
18. Morristown, Morris County issued 225 permits issued in 2016.
19. Lyndhurst, Bergen County had 222 permits issued in 2016.
20. West New York, Hudson County received 219 permits in 2016.

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.

 

New Jersey Reports a High in Pending Home Sales

New Jersey bucked the national trend of falling pending home sales by recording a high for May 2017.

The National Association of Realtors [NAR] reported that pending home sales fell nationally in May for the third straight month. Even though none of the regions covered by the NAR showed an increase, not all the regions were equally impacted.

The Pending Home Sales Index decreased 0.8% to 108.5 in May from a downwardly revised 109.4 in April 2017.

Lawrence Yun, NAR chief economist, believed that the critically low inventory levels throughout the country was having a palpable impact on the index. Yet he expostulated further by saying, “Monthly closings have recently been oscillating back and forth, but this third consecutive decline in contract activity implies a possible topping off in sales.”

He sees this as very possibly a stall in the trend.

This is not the case in New Jersey.

For May 2017, New Jersey’s pending home sales hit a record high: 9,011. This figure is approximately 1,300 more pending sales than were recorded in April. Back in March of 2017, New Jersey recorded 8,335 in pending home sales.

If we compare the numbers being reported for New Jersey, the numbers might be pointing to the ripple effect developing because of its proximity to New York City, where even the five boroughs are becoming middle class resistant.

According to the figures supplied by New Jersey Realtor, pending home sales for single family houses came in at 3,256 back in September 2011 (the furthest back that numbers were supplied). And for comparative purposes, a year later, in September 2012, pending home sales for single family houses were only 3,834.

As the market recovered from the real estate crash of 2008, by May 2015 the number of pending home sales for single family houses had climbed back to 7,073.

And as previously stated, New Jersey’s pending home sales for single family houses hit 9,011.

It seems that for once, New Jersey’s recovery, as documented by the numbers reported by the NJ Realtor site, points to a very healthy real estate market. Hopefully this year the final numbers will bring many of the counties of the Garden State back into range of the levels that it had seen back in 2006.

In the press release published by the National Association of Realtors, it stated, “Existing-home sales are forecast to be around 5.63 million this year, an increase of 3.2% from 2016 (5.45 million). The national median existing-home price this year is expected to increase around 5%. In 2016, existing sales increased 3.8% and prices rose 5.1%.”

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.

Home Prices: Is Real Estate in a Bull Rally?

People want to buy homes. The fact that across the nation, the paucity of inventory of available homes for sale is doing very little to dissuade the buyers. The result: home prices have hit another peak nationally according to CoreLogic.  

CoreLogic reported this week that on a national yearly basis, home prices increased again in May from the prior month and from 2016 levels.

The research group went on to predict that prices for homes “…will only continue to rise.”

According to CoreLogic’s Home Price Index:
■ Home prices increased 6.6% nationally from May 2016 to May 2017
■ Home prices increased 1.2% from April 2017
■ The market is consistently generating home price growth
■ Sales activity is being hindered by a lack of inventory across many markets
■ Tight inventory is affecting everything, from higher home prices to higher rental prices
■ Rents in the affordable single-family rental segment increased 4.7% since May 2016
■ The CoreLogic HPI Forecast shows home prices will increase 5.3% annually by May 2018
■ The CoreLogic HPI Forecast shows home prices will increase 0.9% from May to June 2017
■ Due to the increase in prices, renters and potential first-time homebuyers will continue to struggle to enter this very strong market

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.

The 20 Percent Solution

It makes lots of sense to put down 20% for your down payment. Here are just a few reasons:

■ Long-term, it provides an extra cushion further down the road should there be a disruption in your cash flow.
■ Lenders see a 20% down payment as a better credit risk.
■ The 20% you put down helps to define you as a serious buyer, and in this market, serious is the name of the game.
■ With a 20% down payment, you can often get a lower interest rate.
■ With a 20% down payment, many lenders will not require you to purchase private mortgage insurance (PMI), which protects the lender against non-payment in the event of a default.
■ The 20% immediately becomes home equity in your property, which will allow you to borrow against it for such things as home improvements.

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.

Happy 4th of July

We wish all of our friends and clients a fantastic, safe and happy 4th of July.

Celebrating the Greatest Country in the World:
The United States of America

Oceanfest at Long Branch New Jersey

It’s the biggest seasonal event on the Jersey Shore — in fact, it’s the biggest Independence Day celebration anywhere in New Jersey, and it happens every July 4th right here in Long Branch.

Each year since 1990, crowds numbering in the hundreds of thousands have descended upon the city’s oceanfront promenade from points all over the Mid-Atlantic region for Oceanfest — an all-day, family friendly festival that brings together the most memorable sights, sounds and sensations of the summer season. Not just a music or food festival; much more than a craft sale or street fair, Oceanfest combines the best parts of everyone’s favorite summertime memory — and caps it all off with the most spectacular fireworks display you’ll see anywhere along the Jersey coast.

Counsellors Title Agency Hours of Operation

Counsellors Title will close at 4:30pm Friday, June 30th and will reopen Wednesday, July 5th, at 8:30am.

We wish all of our friends and clients a fantastic, safe and happy 4th of July.

Celebrating the Greatest Country in the World:
The United States of America

Harvard on Housing

HOUSING AFFORDABILITY
Here are some of the big take-aways from Harvard report on Joint Center for Housing Studies:

■ The government considers people who spend over 30% of their income on housing to be “cost-burdened.”
■ People who spend more than 50% of their income to be “severely” burdened.
■ 38.9 million – were considered cost-burdened in 2015, down from 39.8 million in 2014.
■ This was the fifth straight annual decline.
■ Approximately 16% of households, or 18.8 million, paid more than half their income on housing.
■ The availability of homes for sale has fallen dramatically.
■ In 2016, the typical new home for sale was on the market for just 3.3 months. According to the report –the average is 5.1 months.
■ In 2016, 1.65 million homes were on the market making it the fewest in 16 years.
■ The supply is worse for lower-priced homes.
■ Builders have been constructing fewer homes for he first-time buyer segment of the market.
■ Between 2004 and 2015, construction of single-family homes of less than 1,800 square feet fell to 136,000 from nearly 500,000, according to the report.
■ The price of a home increased by 5.6% in 2016.
■ Prices overall remained nearly 15% below their peak, when adjusted for inflation.
■ When adjusted for inflation, prices in markets along the East and West coasts have vaulted more than 40 percent since 2000. By contrast, values in the Midwest and South have declined.
■ The rental vacancy rate fell last year to 6.9 percent, a three-decade low, according to the Harvard report. That’s the seventh straight annual decline.

■ The number of rental units available for under $800 fell by 261,000 between 2005 and 2015, according to the Harvard report.
■ The number of units for $2,000 or more climbed by 1.5 million between 2005 and 2015, according to the Harvard report.

Home Prices Increase Again in April

According to the Federal Housing Finance Agency, nationwide, home prices increased in April, from the previous month and for the previous year.

The numbers showed that home prices increased 0.7% month-over-month in April.

The trend projects that the average home price will increase by 6.8% annually. The agency also revised March’s numbers upward from 0.6% to 0.7%.

This strong trend was also confirmed by a report issued by the National Association of Realtors showing that the median home price for existing home sales increased to a new high in May.

The numbers compiled by the FHFA excludes high-end homes bought with jumbo loans or cash sales.

This chart shows the solid trend of increasing home prices since early 2012, and the point where home prices surpassed their previous peak in 2016.

Since January 2016, when the FHFA index broke the previous high, it is now cresting in new all-time high territory.

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.

Monmouth County Closed Sales Up 24 Percent

Single Family Ocean County May 2017
Metrics                2016     2017      Change
New Listings      1,378    1,342     – 2.6%
Closed Sales          634       756     + 19.2%
Days to Close          96         82     – 14.6%
Median Sales Px $294K $310K  + 5.4%
% of Px Recd         96.3%  97.2% + 0.9%
Inventory             5,584    4,353   – 22.0%
Months Supply     10.8        6.7    – 33.0%

Single Family Monmouth County May 2017
Metrics                    2016        2017     Change
New Listings           1,199       1,286     + 7.3%
Closed Sales              534          660     + 23.6%
Days to Close              75            65     – 13.3%
Median Sales Px      $415K     $425K  + 2.4%
% of Px Recd             96.1%      97.3% + 1.2%
Inventory                3,905        3,114     – 20.3%
Months Supply            7.6            5.4     – 28.9%

Source: New Jersey Realtor

Since 1996, Counsellors Title Agency had provided swift, proven and knowledgeable title insurance settlement and search expertise for thousands of New Jersey’s attorneys, loan officers, Realtors, borrowers and purchasers. CTA’s detail-oriented team of professionals streamlines the complexities of a real estate transaction to make each one stress and glitch-free.

NJ Single Family Closed Sales Up 15 Percent

Closed sales for single family homes, townhouse-condos and adult community all up by double digits for the first time in recent memory.

The buying frenzy is fomenting one of the hottest real estate markets in the last 50 years. Currently there is less than 6 months supply of homes throughout the state. This compares to 15.7 months supply in September 2011.

According to New Jersey Realtor:  

• Single Family Closed Sales were up 14.7% to 7,329
• Townhouse-Condo Closed Sales were up 11.5% to 2,296
• Adult Communities Closed Sales were up 11.6% to 700

Home prices across the U.S. are reaching all-time highs, prompting worry over another boom-and-bust scenario like we experienced roughly ten years ago. Yet, as we glance across the state of residential real estate, what is clear compared to the last extended run of price increases is that lending standards are now much stronger than they were before. Incomes must be verified, a reasonable amount of money must be paid toward the home prior to purchase and a more stringent loan approval process is in place to prevent a repeat performance of the Great Recession.

To read the full report, go to: http://njar-public.stats.10kresearch.com/docs/lmu/x/EntireState?src=map

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