Home Prices Increase, Leading Homeowners to Cash-In on Equity

The rising value of homes has not only brought many an underwater homeowner back into the black, it appears to be causing some to tap into equity for a variety of purposes.

The beneficiaries are, of course, the lenders but also building supply companies such as Lowe’s and Home Depot.

Borrowing Is Back
According to a story on CNBC, borrowers are seizing the opportunity to engage in those projects that they have put off for a number of years.

Home equity lines of credit [HELOCs] volume is now up 21% in the past two years. And as of 2017, HELOCs are at their highest level since 2008, according to Moody’s. The trend appears strong enough to continue to sustain itself as value and the economy appear to be on the mend.

In addition to the trending HELOCs, borrowers are also putting smaller down payments on home loans.

Before the last housing boom, the median down payment was over 7%, dropping to 3% in 2006-7.

At the end of 2016, the median down payment had fallen to 6%, according to ATTOM Data Solutions.

This only thing that will stop such an explosive growth in HELOCs is the rise of interest rates.

What is somewhat different today is that inventory still remains low, demand is high, and mortgage rates are still reasonable, in line with higher home values.

http://www.cnbc.com/2017/03/03/more-homeowners-cashing-in-on-their-new-housing-wealth.html

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Counsellors Title Agency, www.counsellorstitle.com, 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.

Historic Ocean Grove Site of Massive 5-Alarm Fire

A massive five-alarm blaze which started early Friday morning destroyed a vacant hotel, gutted three houses and damaged two condominium complexes, The Marlborough and La Pierre, in Ocean Grove, as well as several other smaller single family homes, three of which burnt to the ground.

Smoke was visible for miles as it drifted across the eastern horizon about daybreak.

The plume of smoke from the fire was visible four miles away. Ash and cinders drifted the two blocks to the boardwalk.

By 9am on Friday morning, St. Paul’s United Methodist Church on Embury Avenue had established a facility where those displaced by the fire could go.

As is the case in these historic town, the potential of one building fire spreading to other structures in close proximity is a very real scenario.  Back on the morning of March 13, 2010, The Manchester Inn was lost in a fire bolstered by high winds and driving rain in Ocean Grove early.

In Ocean Grove, the majority of homes are very susceptible to fire as most are over 100 years old, wood structures and are located very close to each other, sometimes separated by a few feet or a walkway.

If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.

Counsellors Title Agency, www.counsellorstitle.com, 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 Elephant in the Room

The subject of property taxes is a subject that no one is willing to discuss. Right now, the average American pays about $2,149 per year in property taxes, or $180 a month. For the list of states below, that number translates into a monthly charge of $617-$261.

As you can guess, New Jersey tops the list of states on average. But there are a number of counties in New York that blow the doors off of the averages. For instance, Westchester wins with a wopping $1,153 average monthly real estate tax, followed by Rye, averaging $879 a month.

Zillow’s highest property taxes by county include Nassau, Westchester, Rockland and Bergen counties. When it comes to the lowest property taxes, counties in Alabama, Mississippi, Tennessee and Oklahoma lead the way.

The highest property taxes remained in the Northeast, with all of the top 10 in either New York or New Jersey.

The 10 states charging the most by an average in property taxes each year:

1. New Jersey – $7,410
Property tax rate: 2.35%
Median home price: $315,900
2. Connecticut – $5,327
Property tax rate: 1.97%
Median home price: $270,500
3. New Hampshire – $5,100
Property tax rate: 2.15%
Median home price: $237,300
Manchester, New Hampshire
4. New York – $4,600
Property tax rate: 1.62%
Median home price: $283,400
5. Illinois – $3,995
Property tax rate: 2.3%
Median home price: $173,800
6. Massachusetts – $3,989
Property tax rate: 1.2%
Median home price: $333,100
7. Rhode Island – $3,884
Property tax rate: 1.63%
Median home price: $238,000
8. Vermont – $3,795
Property tax rate: 1.74%
Median home price: $217,500
9. Wisconsin – $3,248
Property tax rate: 1.96%
Median home price: $165,800
10. Maryland – $3,142
Property tax rate: 1.1%
Median home price: $286,900

Safety Precautions for This Spring

Tip #1 Keep it light
Show properties before dark. If you are going to be working after hours, advise your associate or first-line supervisor of your schedule. If you must show a property after dark, turn on all lights as you go through, and don’t lower any shades or draw curtains or blinds.

Tip #2 Checking-in
When you have a new client, ask him/her to stop by your office and complete a Prospect Identification Form (Find a copy online at www.nar.realtor/Safety). Also, photocopy their driver’s license and retain this information at your office. Be certain to properly discard this personal information when you no longer need it.

Tip #3 Don’t be too public
Limit the amount of personal information you share. Consider advertising without using your photograph, home phone number and/or home address in the newspaper or on business cards. Don’t use your full name with middle name or initial. Use your office address-or list no address at all. Giving out too much of thttps://youtu.be/MHi4yNfv9Vche wrong information can make you a target.

Tip #4 Touch base
Always let someone know where you are going and when you will be back; leave the name and phone number of the client you are meeting and schedule a time for your office to call you to check in.

Tip #5 Open house safety
Open house: it ain’t over till it’s over. Don’t assume that everyone has left the premises at the end of an open house. Check all of the rooms and the backyard prior to locking the doors. Be prepared to defend yourself, if necessary.

Tip #6 Stranger danger
Tell your clients not to show their home by themselves. Alert them that not all agents, buyers and sellers are who they say they are. Predators come in all shapes and sizes. We tell our children not to talk to strangers. Tell your sellers not to talk to other agents or buyers, and to refer all inquiries to you.

Northeast Pending Home Sales Jump 2.3%

The National Association of Realtors reported that regionally, pending home sales in the Northeast rose 2.3% month-to-month and were 3.6% above 2016. In the Midwest sales fell 5.0% for the month and were 3.8% lower than January 2016. Pending home sales in the South gained 0.4% for the month and up 2% for the year. The West reported sales fell 9.8% for the month and were 0.4% lower than 2016. 

Buyers signed 2.8% fewer contracts to buy existing homes in January compared with December.

“The significant shortage of listings last month along with deteriorating affordability as the result of higher home prices and mortgage rates kept many would-be buyers at bay,” said Lawrence Yun, chief economist of the NAR. “Buyer traffic is easily outpacing seller traffic in several metro areas and is why homes are selling at a much faster rate than a year ago. Most notably in the West, it’s not uncommon to see a home come off the market within a month.”

Mortgage rates moved higher after the presidential election and have remained elevated ever since. Home price gains continue to increase with the weaker supply, clearly weighing on affordability. Experts had expected a slight gain for pending home sales, as new supply was expected to come onto the market in January. The supply of homes for sale, however, is still down dramatically compared with a year ago, and demand for homes is rising as employment improves.

Monmouth County Closed Sales Up 21 Percent

Monmouth County January
Key Metrics  2016  2017  Percent Change
New Listings 799  906 + 13.4%
Closed Sales 362  440  + 21.5%
Days on Market Until Sale 91 74 – 18.7%
Median Sales Price $370,000 $406,500  + 9.9%
% of PX Received 94.8% 96.5%  + 1.8%
Inventory 3,238 2,643 – 18.4%
Months Supply 6.7 4.7 – 29.9%

Ocean Single Family
Key Metrics  2016  2017  Percent Change
New Listings 1,035  1,145 +10.6%
Closed Sales 427  457  + 7.0%
Days on Market Until Sale 100 109 + 9.0%
Median Sales Price $258K $264.7K  +2.3%
% of PX Received 95.2% 96.4%  + 1.3%
Inventory 4,681 3,804 – 18.7%
Months Supply 9.1 6.1 – 33.0%

New Jersey Realtor report – www.njrealtor.com

New Jersey Pending Home Sales Soar

New Jersey January Market Trends

• Single Family Closed Sales were up 13.1% to 4,930.
• Townhouse-Condo Closed Sales were up 7.4% to 1,438.
• Adult Communities Closed Sales were up 16.4% to 440.
• Single Family Median Sales Price increased 1.1% to $288,000.
• Townhouse-Condo Median Sales Price decreased 4.1% to $235,000.
• Adult Communities Median Sales Price increased 13.4% to $174,000.

NJ Single Family Home Market
New Listings  8,883  9,566   +7.7%
Pending Sales  4,191   5,360   +27.9%
Closed Sales 4,359  4,930 +13.1%
Median Sales  285  288K +1.1%
Avg Sales Px  $370.8K  377.7K  +1.9%
% Recd   95.9%   96.5%  +.06%
Days on Market  96   88   -8.3%
Inventory 41,271   33,425   -19.0%
Months Supply  7.4  5.2  – 29.7%

New Jersey Realtor report – www.njrealtor.com

Millennial Mortgages and then Marriage

According to the website Zillow, there is a surge of unmarried Millennial couples purchasing homes. The numbers have increased 36%: from 11% in 2005 to 15% in 2016. [Millennials range between the ages of 24 and 35.]

This is leading to couples forsaking a marriage license for a pre-nuptial. Within the pre-nuptial document various areas can become very specifically spelled out: the breakdown of finances going into the home purchase, how future home repairs will be paid, and how to divide assets in the event that the relationship were to dissolve.

The title of the home can include both partners, so that financial responsibilities for the home don’t fall on one person.

But in some cases of unmarried couples purchasing a property, they may be defined as “joint tenants,” where they have equal shares of the home and if one partner dies, his or her share is automatically transferred to the other partner.

Still, purchasing a home requires that BOTH parties have good credit scores. In some cases when there are two borrowers applying for the home, a lender will select the partner with the higher of the two scores for the loan decisions.

Median Home Price Soars 7 Percent from 2016

January Existing Home Sales Reflect Robust Buyer Demand for Spring

The National Association of Realtors® reported that all major regions except for the Midwest saw sales gains for January 2016. Existing-home sales stepped out to a fast start in 2017, surpassing a recent cyclical high and increasing in January to the fastest pace in almost a decade.

Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, expanded 3.3% to a seasonally adjusted annual rate of 5.69 million in January from an upwardly revised 5.51 million in December 2016. January’s sales pace is 3.8% higher than a year ago (5.48 million) and surpasses November 2016 (5.60 million) as the strongest since February 2007 (5.79 million).

The median existing-home price for all housing types in January was $228,900, up 7.1% from January 2016 ($213,700). January’s price increase was the fastest since last January (8.1%) and marks the 59th consecutive month of year-over-year gains.

First-time buyers were 33% of sales in January, which is up from 32% both in December and a year ago

All-cash sales were 23% of transactions in January, up from 21% in December but down from 26% a year ago.

Single-family home sales grew 2.6% to a seasonally adjusted annual rate of 5.04 million in January from 4.91 million in December 2016, and are now 3.7% above the 4.86 million pace a year ago. The median existing single-family home price was $230,400 in January, up 7.3% from January 2016.

January existing-home sales in the Northeast jumped 5.3% to an annual rate of 800,000, and are now 6.7% above a year ago. The median price in the Northeast was $253,800, which is 2.5% above January 2016.

A Fresh Look at Title Insurance

A property title is the legal right that a person has to the ownership and possession of land.  If that prior claim can be established, that person may claim an interest in the property outright or make demands on the owner as to its use.

How quickly can Counsellors Title provide a title commitment?

Typically, Counsellors is able to provide a title commitment in 24 hours. All products and services are managed through one customized central order tracking system, providing access to the appropriate, designated partners including completed appraisal reports, title binders, auxiliary searches, preliminary and final HUD, final title policy, executed closing package and designated post-closing documents on-line 24/7. Once an order for title is placed using a secure password, an e-mail confirmation of the order is sent within seconds, providing peace of mind and sparing everyone involved unnecessary phone calls for tracking purposes.

When you purchase a Title Insurance Policy through Counsellors Title Agency it becomes a critical instrument protecting you, the purchaser, from loss due to a defect in the title deed.  Your title insurance occurs only once at the time of the purchase. It not only guarantees protection but also the peace of mind knowing that your purchase investment is protected from any prior claims against the property.

At Counsellors Title Agency, we provide title insurance services and services related that our clients require in the course of purchasing a property.

Housing Market Remains Steady

The drop in the number of mortgage applications for the last week doesn’t seem to be resulting in a softening of the real estate market.

Housing Market

Mortgage Bankers Association reported that total mortgage application volume increased 2.3% on a seasonally adjusted basis for the week from the previous week.

While applications are significantly below what they were this time in 2015, the 23% drop in applications is basically due to the drop in loan refinancings, which are 40% lower than 2016. The higher rates are seen as being the primary reason for the falloff.

Mortgage applications to purchase a home rose 2% last week and are 3.6% higher than a year ago. Buyer demand remains unflinchingly steady.

It will be interesting to see how many new sellers venture into the market, considering the number of homeowers who have moved into the black.

Lunch & Learn February 22

Lunch & Learn

Come learn about the US DA Loan Program and discover how to sell more homes using this $0 down payment loan.
Convert Rental Leads to Buyers
Market Your Listings
Flexible Guidelines

Q&A Networking with guests and co-sponsors:
Michael Mathews Housing Programs Director | NJ State Office Rural Development | U.S. Dept of Agriculture

Register Here

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