Geoff Green, president of Green Team Realty, welcomed everyone to the October 2019 Housing Market Update. The webinar was held October 14 at 2 p.m. on Facebook Live.
National Housing Market Statistics
RECESSION RECESSION RECESSION
Everyone’s talking about it. Geoff thinks probably the impending 2020 US elections have a lot to do with that as well. The simple fact is that more and more people are starting to think that it will happen. .Because of that, we need to address it. No matter how much less impact we feel this recession would have on the housing market than the last one was, it’s still going to have an impact.
The above charts show a survey of different analysts and influencers in the economic world. Most think the recession will come in 2020. Again, it will be interesting to see the affect that the elections will have. Needless to say, the vast majority believe the recession will start within the next two years, 2020-2021.
Recessions don’t necessarily mean a bad housing market
A recession does not mean that there has to be a sharp decline in price. Or an overall reduction in home valuations. The last series of recessions dating back to 1980 and only two of them had negative price appreciation. That’s important to note. Geoff believes that the bottom will not drop out like it did in 2008. That was a very scary time for the real estate industry. There are now a lot of economic fundamentals in place that should lead to a better downturn, if one were to come.
Projected Home Price % Appreciation holding steady
Again, stake holders, influencers in the world of economics are predicting that not only will pricing on a national basis not go down, but it will continue to appreciate. Not at the pace seen in the last few years, but these numbers are probably healthier. The rapid market we were seeing wasn’t going to last forever and could not be sustained. There is nothing wrong with appreciation slowing and growing at a slower pace.
Corelogic shares its forecast for Year-over-Year percentage of change in price, according to markets throughout the U.S. From this it appears the northeast is looking good.
Local Housing Market Statistics
Orange County, New York
Geoff had expected the green line for units sold to be lower for the third quarter. However, it really held out very well. If you look at July, it was above all previous six years. August was a touch below. And September was even. So it was a good third quarter.
Average Sales Price is doing well. It’s well above where it’s been the last 5 or 6 years.
This is the last asking price versus the sales price. The market is becoming a little more competitive. Sellers are having to negotiate a little more off their selling price. Again, as the market is cooling it’s bound to happen. However, we are not seeing a precipitous decline here.
Days on market is still extremely low. Not one month dipped above any of the previous years.
Sussex County, New Jersey
Although the year started out slower in Sussex County, it caught up in the third quarter. The third quarter was strong, which is important.
Average price is holding pretty strong.
Despite a few dips, Ask to Sold Ratio is remaining at a very high level.
Days on market, not one month has risen above previous years, showing that the market is still strong.
Life events determine buying a home, not market data
Buying a home is based on our life events and where our lives are going. This is good advice. As realtors we want you to find a good home in the place you want to be. If the above three items are all in check, it doesn’t really matter what market you’re in. You’ll make a good decision and you’ll buy a good home.
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Meet our Panel
From Left to Right: Toni Kreusch of Green Team New York Realty and Keren Gonen of Green Team New Jersey Realty
The Fear Factor
Geoff started the discussion, asking about the fear factor. Should people be afraid? Should they hesitate? Keren replied that in her experience, people are always afraid of the unknown. That’s one of the reasons people are holding back, whether selling or buying. However, what she did with one of her clients who was buying in Highland Lakes, was advise him to review the previous month’s housing market update. After taking all the information in, that client put an offer on a property and wound up getting the house he wanted. Before learning more about the market, he had been apprehensive about even buying at that time.
Also, Keren reiterated that interest rates are really low and should be capitalized on. Whether refinancing, buying, downsizing, this is the time to do it. Geoff agreed that rates have been so low it’s remarkable. Especially now, at the end of the day, Geoff’s advice is that it’s all about monthly cash flow. What is it going to cost me each month to live there? And do I have enough income minus my living expenses to be able to pay my mortgage, save for retirement, etc. So, financing really matters.
Toni agrees that people can purchase more house for their money and often pay the same or less if you are currently renting. By owning a home you’re building wealth. What better way to save money as you move into your future?
Would a buyer’s market not be the ideal time to sell?
It’s hard being a broker because there are always two sides to a discussion: there are buyers and there are sellers. One would think if we were in a buyer’s market then it would not be the ideal to sell. There would be lots of inventory, you’d be competing against other people, downward pressure on the price of your home, etc., as opposed to a seller’s market. Geoff believes it is the right time to sell. If you’re someone at or near retirement who has been thinking about getting out it is the right time. Even though we’ll be seeing price appreciation for another few years, even if it goes flat or goes down a little, we’re not going to see a roaring uptick at any point of time in the very near future. Pricing is probably as good as it’s going to get. He asked if Keren and Toni agreed.
Keren agreed. And Toni said we’re experiencing a special time right now, with low interest rates and low inventory. It’s a great time to buy and sell. From a seller’s perspective, Geoff would advise sellers to put their home on the market now.
Is the Holiday Season not the ideal time to sell?
With Thanksgiving, Christmas and Hanuka coming, these are low transaction months. Many people put aside their buying regimen during the holidays. Less people are identifying homes in November, December, January. However, one phenomenon Geoff has seen was the buyer who needed to buy a home in December. There wasn’t a lot of inventory and they paid too much for a house because they had to buy. A few months later lots of inventory rolled out and prices were lower. As we head into the holiday season, there are still buyers out there who haven’t found what they wanted yet. They don’t care if it’s December. They’ll still want to look and will buy the right house..
More than most any year that he’s seen since being in the business, Geoff recommends if you are a seller thinking about selling, if your home is ready, put it on the market. Don’t wait until Spring. It’s very busy now. Right now is a very good time. Toni said they still have people calling in and coming into the office who appear to be serious buyers, not just lookers. Keren stated that November has always been her biggest month. People looking in the winter are serious. You’ll probably get less traffic, but the showings are going to be more serious. If it’s priced right, there is enough intensity in the market to get transactions.
This is the time to buy – and the time to sell
Geoff predicted that if someone is going to buy a home and is planning on living there at least a 7-10 year period, they’re fine. Even if the market goes down during that time, it’s going to come back up and re-appreciate. The last down turn lasted a really long time. Looking at it on a hyper-local level, it lasted 8 years regarding pricing. It dropped precipitously in 2008 and did not restabilize until 2016. Eight years of price declines is rare in terms of the history of the housing market. He just does not see that happening this time around. While the market may continue to soften for some time, he doesn’t think it will drop that low. And he believes it will come up relatively soft, compared to the rapid rise the last time. This follows principles of physics. For every action there is an equal and opposite reaction. The markets tend to do the same thing.
Geoff asked Toni and Keren if they agreed with the premise: if a buyer is going to live in a home 7-10 years, they should be just fine in terms of outliving any market turbulence. Keren did agree, and also reiterated that now is the time to sell. If you’re looking to downsize and you’re on the fence, this is it. We have good qualified buyers and low interest rates, but don’t know how long this will last. Like Toni mentioned, sometimes you can purchase with a mortgage less than a rental. That’s important to mention again because it is the time to buy and sell.
Suitable Housing clause
Geoff mentioned that you can structure your listing to make it subject to finding suitable housing. For example, if a retiree worried about finding housing after selling their home a suitable housing clause could be utilized. However, you do have to give buyers reasonable terms on that clause. It is an option to discuss with your Green Team sales associate if this is a concern.
Selling in a bad market
Geoff recounted that a majority of his listings were during a really bad market. Listings would languish and go on and on, very different than the market we’ve been seeing the last 3-5 years here. To those buyers or sellers going through the transaction process, Geoff offers some advice. Sellers may have a home listed and haven’t had any showings, or maybe many showings but no offers, or offers that fell through. Sometimes the reason that sellers are in that place is because the property is priced too high. A lot of people are not willing to admit it, but it is a fact. To those in that situation, what is going to matter most to you when closing is done is not the bottom line on the closing statement. It’s going to be that it’s over and done and you can move on with your life. Far too many people are trying to get an extra $5,000 or $10,000 while they’re spending $1,000 a month on taxes, interest payments, utility costs, maintenance. That all adds up quickly. They’re also not factoring their own well being, factoring in the stress that comes with the whole process. If you’re a seller and you’re thinking of selling, go for it!
Keren agreed. She stated that sometimes sellers have it in the back of their mind that they are going to get “X” amount of dollars for their listing and they end up being listed for 6, 7, 8 months. As an agent, Keren believes it’s imperative to make clear that we have several different options. If you are looking to sell quickly, this is where we need to be. This is your market value because as realtors, this is what we do day in and day out. For some sellers the home has sentimental value and they are also concerned about the bottom line. There’s a thin line to walk when discussing price.
Toni said that working with motivated sellers is helpful. So is aggressive marketing, which is done by your agent. And, if your home is not selling, you should certainly consider a price reduction.
Geoff hoped that this discussion helps people in this position, who may be agonizing over whether to drop their price. Remember, if the house is priced right, you’re going to get a good offer with reasonable terms. Buyers are looking to move on, too. They need a house, need a place for their family.
Reminder: The next Housing Market Update will take place life on Facebook Tuesday, November 19, 2019 at 2 p.m.
To reach our panelists if you’d like to buy or sell a property or learn more about the housing market
Keren Gonen – 551-262-4062
Toni Kreusch – 845-283-2450
August 2019 Housing Market Update
Geoff Green, President of Green Team Realty, welcomed viewers to the August 2019 Housing Market Update. It was held on Tuesday, August 20 at 2 p.m. on Facebook Live.
National Housing Market Statistics
Recession? So what’s the story?
We’ve all keep hearing the word, and the questions… Is it going to happen? Is it not going to happen? In Geoff’s view, that’s always up for debate. We know that at some point it is going to happen. Maybe not right now. However, the question is does a recession lead to a housing crisis?
Based on what he has been hearing from industry experts, Geoff believes that a recession will not lead to a housing crisis. Rather, it appears that the market is normalizing. Over the past three years we’ve been experiencing a super hot seller’s market. Things have been going very quickly. It has not been a normal market, where homes take longer to sell, Prices aren’t dramatically increasing. Things are a little more where we’re headed. Although right now we’re rather hot, looking at numbers and seeing into the future, Geoff does think that things are cooling and we headed towards that more normalized market.
Contrary to the hand-wringing, the U.S. housing market is in fact normalizing, and that is mostly a positive development for the American economy.
Pending Home Sales
This graphic shows pending home sales on a national basis since 2014. . It shows the trends, the ups and downs, including seasonal fluctuations. Usually we peak in the 2nd and 3rd quarter of each year, which is where we are right now. However, you can see how low we got nationally as opposed to the last 3 or 4 years. Again, this shows that the number of units selling throughout the country is definitely slowing down.
Pending home sales – which represent signed contracts on existing homes, and are therefore considered a leading indicator – have advanced to their best level since mid-2017. New-home sales, also representing signed contracts, have been bumpy in recent months but have climbed about 15% so far this year.
Are Americans planning to buy new homes?
This not-for-profit organization put together this survey on the percentage of Americans planning on buying a new home in the next six months. What they discovered? Americans are quite bullish on buying homes. In fact, more people are considering buying a home than we saw in 2006, 2007, 2008…
With the numbers gradually increasing, home ownership is still on the forefront of peoples’ minds.
According to the Conference Board, buying intentions for new homes have exploded to levels not seen since before the financial crisis.
The S&P Homebuilder Group
This consolidated group of stocks were compared from June 2018 to June 2019 (in blue). The 30 year fixed year interest rate is in orange. You can see there is a consistent relation with one another. However, even though rates are still low, confidence in gaining in the stocks in the Homebuilder group. It appears that Wall Street is still seeing opportunity for growth and profit in this sector.
The S&P 1500 Homebuilder group has rallied 35% in 2019 to a new 52-week closing high in mid-June.
Housing Affordability Index
This chart shows housing affordability from 1999 to 2019. Historically, at least since 2008, 2009, we were at a low level. Homes are very affordable in terms of what people are able to generate in income through their occupations. Although prices have been rising, it’s still a relatively affordable market, and much of that is due to interest rates
The higher the graph, the more affordable homes are.
It’s more affordable than the normal markets that preceded the Boom and Crash.
Typical Mortgage Payment
In January 2000, the typical mortgage payment was $1,100 because rates were significantly higher.. Now the typical mortgage payment is $910. Prices nationally are at a much higher level. However people are able to buy people are able to borrow at a lower rate, so their payments are less. Most people in the world have to deal with here and now. “I have to pay my mortgage this month, I have to get my child into camp this month. I’ve got to make college payments this month.” It’s hard for people to look out further than a month or two or three in advance. So this monthly analytic is very important.
Adjusted for inflation, today’s typical mortgage payment is less than what it was prior to the boom in January 2000.
Part of the reason is wages are up and Interest Rates are still statically low.
Payment as a Percentage of Income
Per Geoff, there is an old adage in real estate which says, “You name the price, I’ll name the terms!” You want $500,000 for your property? Well, if you are willing to give it to me at a low enough interest rate with a really long amortization term, it will cost me hardly anything to carry on a monthly basis. I can acquire the property, rent it out and achieve much more income that needed to service the debt.
Real Estate is an asset that can be leveraged and therefore the rate at which leverage can be gained is very important. The drop in rates is very significant to this market and where it is headed. If we were in a rising rate atmosphere we would be having a very different conversation.
According to Mark Fleming, First American’s Chief Economist: The difference between buying a home versus other goods is that we buy them with a mortgage. So, it’s not the actual price that matters, but the price relative to the purchasing power.”
Local Housing Market Statistics
Orange County, New York
We’re starting to see an upturn in number of units sold in Orange County. July was the best month we’ve seen in a long time. We had been lagging for a while but
Average sales price continues to increase in Orange County. There had been a cooling-off period for awhile, but over the last three months there has been a steady increase. 2018 showed a definite increase over prior years, and 2019 shows signs of continuing the upward trend.
The last asking price versus what homes sold at. 98.53% means Seller are only negotiating 1.47 percent off of their asking price. If you are a Seller whose home is on the market and you’re not getting offers, note that this is the last asking price, not the initial. The key is to having a good, competitive asking price. You can’t put your house out there at just any price and expect these kinds of numbers. However, if a home is priced right, you may hit this ratio.
Sussex County, New Jersey
Over the course of a few years we’ve been watching the comparison of the housing market in Sussex County, NY versus Orange County, NY. The numbers are consistently a little lower in Sussex than what we’re seeing in Orange. This is a pretty consistent down trend over 2018 and 2017 and hasn’t gotten above 2018 except for March of this year.
While Geoff does not see this as a steeply declining market, he does think that prices are softening.
This is a very strong number. While not quite as high as Orange County, it is still a very good number. Only 2.4 percentage points off the asking price, much better than it was a few years ago.
Things are definitely moving in Sussex. There are less days on market than in Orange County. It’s a very robust market in Sussex County.
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Meet our Panel
From left to right, Keren Gonen and Pam Zachowski of Green Team Team New Jersey Realty and Toni Kreusch of Green Team New York Realty.
Geoff opened the discussion to comments from the panelists on the information presented.
Low Interest Rates
Keren Gonen began the conversation by noting that interest rates are so low that a lot more people can qualify for mortgages. When the rates are high, many people just can’t make it on a monthly basis. They can’t afford the house they wanted and pay their other expenses and debts as well. Low interest rates not only allow for buyers to make smarter decisions but also to become eligible for financing. This is also causing low inventory. Even though the market has softened a bit, it’s still a seller’s market. When a good house comes on the market it does not stay there for long. Keren sees bidding wars on a daily basis. She tells clients if they love the house, let’s jump on it. You don’t have to go to asking if the price is ridiculous, but get your foot in the door. The house will not stay. And, when they do not listen, they lose the house.
What is a good house?
Geoff noted that Keren had mentioned “good house.” He went on to describe what he sees as a good house. A house in good condition and well located and there’s a good asking price, it’s going to sell. The old adage is “Location, location, location.” What Keren tells her sellers is to figure out their time line. Do they want to sell right away, or are they willing to let the house sit on the market for a few months? If they want to sell right away, the house needs to be priced to get offers within a week or two. Or do they want to price higher and sit on the market. She leaves the choice to them. Knowing where they stand, what the market is, will help determine what they want to do. Keren believes it is important for agents to educate their sellers and buyers so that they can make the best decisions.
Real Estate – Still a good investment
Pam mentioned she had been listening to Suze Orman in the morning, who was talking about how we were likely going into a recession. However, one thing she pointed out was that real estate was still a good option. She doesn’t anticipate another housing crisis like we had before. She says it’s normalizing and real estate is still a good investment to have. Geoff went on to say that real estate is always a good option. It’s important to make sure you make the right purchase and there’s good logic. If you need a place to live and you’ll be there for at least 3 to 5 years, it doesn’t pay to rent. Even if the market takes a downturn, there are still a lot of advantages to home ownership over renting. He believes that home ownership should be the core of wealth management strategies.
Toni mentioned that for anyone considering buying or selling, home prices are appreciating at a more normal rate right now. And they have been for the last 10 years. With forecasts predicting that with growth continuing at this normal rate and interest rates being low, it is really a great time because you’ll get more money over the life of your loan, and you’ll get more house for your money. Geoff noted that the big takeaway for anyone going to buy a home and planning on living there, you can never really time the market. It’s best to just get in and go for it. Over the course of time your home will appreciate and you will build wealth.
Is low inventory still the major headline for our local markets?
Geoff addressed this question to the panel. Is the lack of inventory a problem for all of the buyers you’re running around, trying to find homes for? Toni agreed that there is a shortage of houses. Geoff asked if it’s mostly the middle range that is so short, or is it the lower or higher end homes that have low inventory? Pam said there is definitely a shortage of homes for investors. She said it is very hard for people to find that house to flip. Also, she feels there are not enough mid-range houses out there. Buyers are looking but just can’t find what they want.
Toni mentioned that first-time home buyers are competing with investors for those lower-end homes. In the higher-priced market, you have the pick of the house. Geoff agreed that the high end has been dragging nationally for some time now. There seems to be a shift in what people want now. They don’t seem to want big homes, higher taxes and big utility bills. People in general are more concerned with smaller footprints. The panelists agreed with Geoff on these points.
Keren mentioned that she is seeing young buyers heading up to Sussex County where they can afford to own a home with a mortgage less than their rent would be in other areas. Geoff agreed. Here in the northern suburbs from New York City there are amazing places to live. It’s a fraction of the cost of living in the City and some of its immediate surrounding areas.
We’re still in a very strong market. It will be interesting to see what the future holds. Geoff said that many economists are fearful of the possibility of an impending recession within the next 18-24 months. However ,many people feel that the strong housing market is one reason we may not slip into a recession. Even if a recession happens, perhaps the housing market will be okay.
To get in touch with the panelists for your real estate needs:
Keren Gonen – 551-262-4062
Pam Zachowsky – 201-452-0516
Toni Kreusch 845-283-2450
Join us for the next Housing Market Update
September 17th at 2 p.m. Stay informed! Sign up for our Housing Market Updates at: GreenTeamRealty.com/HMU
No one knows for sure when the next recession will occur. What is known, however, is that the upcoming economic slowdown will not be caused by a housing market crash, as was the case in 2008. There are those who disagree and are comparing today’s real estate market to the market in 2005-2006, which preceded the crash. In many ways, however, the market is very different now. Here are three suppositions being put forward by some, and why they don’t hold up.
A critical warning sign last time was the surging gap between the growth in home prices and household income. Today, home values have also outpaced wage gains. As in 2006, a lack of affordability will kill the market.
The “gap” between wages and home price growth has existed since 2012. If that is a sign of a recession, why didn’t we have one sometime in the last seven years? Also, a buyer’s purchasing power is MUCH GREATER today than it was thirteen years ago. The equation to determine affordability has three elements: home prices, wages, AND MORTGAGE INTEREST RATES. Today, the mortgage rate is about 3.5% versus 6.41% in 2006.
In 2018, as in 2005, housing-price growth began slowing, with significant price drops occurring in some major markets. Look at Manhattan where home prices are in a “near free-fall.”
The only major market showing true depreciation is Seattle, and it looks like home values in that city are about to reverse and start appreciating again. CoreLogic is projecting home price appreciation to reaccelerate across the country over the next twelve months.
Regarding Manhattan, home prices are dropping because the city’s new “mansion tax” is sapping demand. Additionally, the new federal tax code that went into effect last year continues to impact the market, capping deductions for state and local taxes, known as SALT, at $10,000. That had the effect of making it more expensive to own homes in states like New York.
Prices will crash because that is what happened during the last recession.
It is true that home values sank by almost 20% during the 2008 recession. However, it is also true that in the four previous recessions, home values depreciated only once (by less than 2%). In the other three, residential real estate values increased by 3.5%, 6.1%, and 6.6%.
Price is determined by supply and demand. In 2008, there was an overabundance of housing inventory (a 9-month supply). Today, housing inventory is less than half of that (a 4-month supply).
We need to realize that today’s real estate market is nothing like the 2008 market. Therefore, when a recession occurs, it won’t resemble the last one.
November is a beautiful season here in Orange and Sussex Counties.
The beauty of leaves changing color can still be seen. And, even when skies are gray, it’s a gorgeous backdrop to the red barns and the fields that dot our counties. Of course, November brings many things. Such as Thanksgiving and the inevitable countdown of shopping days until Christmas. Better Homes & Gardens helps you take control of Thanksgiving with this handy time table and recipes. Also, here are 30+ Thanksgiving Menu Ideas from bhg.com. Further, leave it to Martha Stewart to provide us with these gorgeous table settings for Thanksgiving.
Along with all the fun and excitement of the Holiday season comes cold and flu season and a whole lot of stress. BHG.com has tips for strengthening your immune system. And they’re pretty easy to work into our daily lives. Another thing that November brings is leaves. Lots of leaves. Here are some tips from AAA Northeast on Landscaping Fall Cleanup for Your Home.
Places to Go, Things to Do in Orange and Sussex
November 1. Washington’s Headquarters State Historic Site starts its new Fall/Winter hours. It will be open Fridays and Saturdays from 11:00 a.m. to 3:00 p.m. Admission is $4 for adults; $3 for seniors and students. Children 12 and under Free. 84 Liberty St, Newburgh, NY. 845-562-1195.
November 3: 19th Annual Salute to Military Veterans. The tribute consists of a parade highlighting Sussex County’s veterans of all branches of service. There will be military vehicles, civic groups, community and local high school bands. In addition, there will be a reading of essays by local students. Finally, a POW and MIA solemn remembrance will take place with a 21-gun salute. Refreshments will be provided at conclusion of event. 1:00 p.m. Sussex County Fairgrounds, 37 Plains Road, Augusta, NJ.
November 4 – 17 is Hudson Valley Restaurant Week. Enjoy prix fixed meals from some of the County’s finest restaurants. Here’s the list of participating Orange County Restaurants. The 3 Course lunch is $22.95 and Dinner, $32.95. Bon appetite!
November 11: Veterans Day
The Broadway musical Hamilton renewed interest in the Revolutionary War. And there are lots of historic sites throughout Orange and Sussex Counties to explore.
Revolutionary War New Jersey has a listing of the many points of interest throughout Sussex County. Orange County Tourism shares a Revolutionary War Tour. With Veterans Day celebrated this month, it’s the perfect time to remember our Nation’s first veterans.
November 9 & 10: Thanksgiving Tasting & Toy Drive at Museum Village. This annual event features tastings of recipes of both the Pilgrim and Victorian eras, made right on the hearth. Adults: $14. For children ages 4-12 admission is $10, and children under 4 are free. This year Museum Village is asking for donations of unwrapped new toys for the Country Kids Food Pantry. They need gifts for children from 2-16 years old, with a special need for TWEEN toys. Museum Village. 12 p.m. to 5 p.m. 1010 State Route 17M, Monroe, NY. 845-782-8248
November 29 & 30: Love Local Maker Market 2019. Handcrafted gifts by local artists will be available at the Warwick Community Center. In addition, there will be make-and-take ornament stations throughout the market where people of all ages can create their own handmade decorations. There will also be hot drinks and baked goods. 10 a.m. to 6:00 p.m. 11 Hamilton Ave, Warwick, NY.
Wishing you and yours a very Happy Thanksgiving!
The gap between the increase in personal income and residential real estate prices has been used to defend the concept that we are experiencing an affordability crisis in housing today.
It is true that home prices and wages are two key elements in any affordability equation. There is, however, an extremely important third component to that equation: mortgage interest rates.
Mortgage interest rates have fallen by more than a full percentage point from this time last year. Today’s rate is 3.75%; it was 4.86% at this time last year. This has dramatically increased a purchaser’s ability to afford a home.
Here are three reports validating that purchasing a home is in fact more affordable today than it was a year ago:
CoreLogic’s Typical Mortgage Payment
“Falling mortgage rates and slower home-price growth mean that many buyers this year are committing to lower mortgage payments than they would have faced for the same home last year. After rising at a double-digit annual pace in 2018, the principal-and-interest payment on the nation’s median-priced home – what we call the “typical mortgage payment”– fell year-over-year again.”
The National Association of Realtors’ Affordability Index
“At the national level, housing affordability is up from last month and up from a year ago…All four regions saw an increase in affordability from a year ago…Payment as a percentage of income was down from a year ago.”
First American’s Real House Price Index (RHPI)
“In 2019, the dynamic duo of lower mortgage rates and rising incomes overcame the negative impact of rising house price appreciation on affordability. Indeed, affordability reached its highest point since January 2018. Focusing on nominal house price changes alone as an indication of changing affordability, or even the relationship between nominal house price growth and income growth, overlooks what matters more to potential buyers – surging house-buying power driven by the dynamic duo of mortgage rates and income growth. And, we all know from experience, you buy what you can afford to pay per month.”
Though the price of homes may still be rising, the cost of purchasing a home is actually falling. If you’re thinking of buying your first home or moving up to your dream home, let’s connect so you can better understand the difference between the two.
Here are four great reasons to consider buying a home today, instead of waiting.
1. Prices Will Continue to Rise
CoreLogic’s latest Home Price Insights Report shows that home prices have appreciated by 3.6% over the last 12 months. The same report predicts prices will continue to increase at a rate of 5.8% over the next year.
The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.
2. Mortgage Interest Rates Are Projected to Increase Next Year
The Primary Mortgage Market Survey from Freddie Mac indicates that interest rates for a 30-year mortgage have recently hovered just above 3.5%. This is great news for buyers in the market right now, because low interest rates increase your purchasing power – but don’t wait! Most experts predict rates will rise over the next 12 months. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison, projecting that rates will increase by this time next year.
An increase in rates will impact your monthly mortgage payment. A year from now, your housing expense will increase if a mortgage is needed to buy your next home.
3. Either Way, You Are Paying a Mortgage
There are some renters who haven’t purchased a home yet because they’re uncomfortable taking on the obligation of a mortgage. Everyone should realize that, unless you’re living rent-free with your parents, you are paying a mortgage – either yours or that of your landlord.
As an owner, your mortgage payment is a form of ‘forced savings’ that allows you to have equity in your home you can tap into later in life. As a renter, you guarantee your landlord is the person with that equity.
Are you ready to put your housing costs to work for you?
4. It’s Time to Move on With Your Life
The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears both are on the rise.
But what if they weren’t? Would you wait?
Look at the actual reason you’re buying and decide if it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over custom renovations, maybe now is the time to buy.
Buying a home sooner rather than later could lead to substantial savings. Let’s get together to determine if homeownership is the right choice for you and your family this fall.
Congratulations from Geoff Green, President of Green Team Realty, to our Third Quarter 2019 Sales Leaders
Congratulations to Jennifer DiCostanzo of Green Team New York Realty and the dynamic team of Charlie Nagy and Ted Van Laar of Green Team New Jersey Realty for taking first prize as our third quarter sales leaders. It’s no secret that Q3 is the biggest quarter of the year in our industry. Therefore, it shouldn’t come as a surprise that we’re seeing these three names at the top once again. The truth is, behind the accolades there is a lot of hard work. All three of these individuals work tirelessly to yield the results they do. So, keep up the great work everyone!
Jennifer DiCostanzo, Warwick
For this hard working Associate Broker, success is not measured by sales numbers alone. Rather, Jen views true success by the clients she’s helped and the satisfaction she gets from doing her best at something she loves. She is constantly striving to enhance her knowledge and skills so that she can provide her clients with an edge in this competitive market.. Jen has earned her Seller Representative Specialist (“SRS”) and Accredited Buyer’s Representation (“ABR”) Designations. In 2016, 2017 and 2018, she received the annual Sales Leader Award as well as the Citizenship award. Further, in 2017 she became the first recipient of the Green Team MVP Award for over $10 Million in sales. Jen is a member of the NYS Association of Realtors, the Hudson Gateway Association of Realtors, the National Association of Realtors, and the Warwick Chamber of Commerce. In addition, as a Warwick resident married to a NYC firefighter, she understands the needs of commuters and has helped many buyers relocate to Orange County.
Charles Nagy and Theodore Van Laar, Vernon
In addition to this Q3 Award, the team of Charles Nagy and Theodore Van Laar earned Green Team New Jersey Realty’s 1st Quarter Sales Leader Award for 2019. That follows their 4th Quarter and Yearly Sales Leader Awards for 2018. The Dynamic Duo, as Geoff Green affectionately calls them, are equity partners in the brokerage. And they are committed to leading by example. They are strong believers in the Green Team’s unique system of training and support which gives sales associates the tools to provide the best possible customer service and experience. Charlie and Ted come from diverse backgrounds in real estate. Yet together they form a productive, successful team. One bond that unites them is their love of resort properties and living. They have been recipients of the Circle of Excellence Award multiple times between 2014 and 2018. That Award requires minimum sales of $2.5 Million and 15 transactions to qualify. In addition, they were Second Quarter Sales Leaders at Green Team New Jersey Realty for both 2017 and 2018.. And in 2018 they became part of the Green Team’s President’s Club, which honors those associates with $5 to $10 Million in sales volume.
Charlie and Ted are proud of Green Team New Jersey Realty’s growth and achievements. After only two years in business, GTNJR owns their own office building and ended 2018 as the #1 firm in sales volume and transactions in all of Vernon, NJ. They also take pride in the team they are building.
Congratulations to our 2nd and 3rd Place Winners
Green Team New York Realty: Toni Vogel is our second place Q3 Sales Leader, with Nancy Sardo in third place.
Green Team New Jersey Realty: Kristi Anderson is second place Q3 Leader, with Alison Miller in third place.
Geoffrey Green, President of Green Team Realty, invited viewers to the Sept 2019 Housing Market Update. The update took place on Sept 17, 2019, 2 p.m. on Facebook Live.
National Housing Market Statistics
According to Geoff, we’re starting to hear the word recession far more than we did a year ago, far more than six months ago. The big buzz is, are we headed to a recession? If so, when? And how dramatic will it be? The bottom line is most people think we won’t be experiencing anything like we went through from 2008 to around 2016.
“The housing crash during the Great Recession left a lasting impression… But as we look ahead to the next recession, it’s important to recognize how unusual the conditions were that caused the last one, and what is different about the housing market today.” Jeff Tucker, the Zillow Economist
Reasons why housing prices and the real estate market should remain strong
- Many people are in a very strong equity position as far as their home goes. That’s the amount of money that is in the value of the home. If you know the fair market value of your home minus the pay off amount of your mortgage, the difference is the equity. Keren Gonen and our Producer, Melissa Bressette, were discussing that over one-third of US households are free and clear of any mortgage. That is a very strong number. From a balance sheet perspective, we’re doing very well as a nation.
- We’ve had good appreciation over the last few years. It continues and most experts agree that despite the market slowing, appreciation is still going to be something that will continue for the next 12 months at least. The question is really by how much.
- Inventory levels are still relatively low. Days on market are low, bidding wars are still happening.
- Mortgage and interest rates are fantastic. Geoff thinks that if you had asked a lot of mortgage professionals a year ago where rates would be now, they would not have predicted how low rates would be. The low rate environment is continuing to fuel the real estate market.
- There is a level of affordability we haven’t seen in a long time. When you package everything together; earnings, mortgage rates, taxes, prices of homes, etc.you get affordability rates that are historically high. That is, how affordable it is for the average American to buy a home.
Here we’re seeing year over year appreciation growth. It is still very strong. Still where it was a couple of years ago. Percent of negative equity share refers to who is in negative equity situation. That occurs when the mortgage payoff is higher than the fair market value of the home. That has been steadily declining since 2010 and we are now at the lowest level since then. Those are very good signs.
A quick glance at the map of the U.S. on the left side shows nothing is below “0” and everything is still appreciating. Then we review the right side, which examines year-over-year change in price by price range. All price points are in grey. Lower end homes have a bigger market, more demand, which drives up price. However, even the high range homes are experiencing appreciation.
Corelogic,a leading provider of statistical data on the housing market is projecting, per the above map, that over the next 12 months the nation will go up another 5.2%. That is a very healthy rate of appreciation. In addition, some other sources, shown here on the right, are predicting a fairly substantial level of appreciation, even into 2021.
Historically, left to right, we are still at a very low level of inventory, which means that pricing should continue to increase. or stay strong year over year. Year-over-year inventory levels, we’ve had a bump at the end of 2018, beginning of 2019. Now we can see inventory starting to tighten up again a little.
Where are they headed? Where are they now? We can see from January 2018 to today the rates that could not have been predicted a few years ago to be so low. And we recognize that this is a good spot that we’re in.
On the graph to the left, the yellow line represents median home price while the blue represents purchasing power. It’s evident that there is much less of a variance between the two up to 2005, which was the worst period of time. But we’ve stayed strong. During the crash, home prices went down while affordability went up. And it hasn’t really changed. There is still ta good opportunity for people to secure one of the most important assets they ever will own – a home.
Historical Recession Data
Geoff agrees with everyone who believes that this recession will be much shorter than the last one. The housing market is in a better position. We have better fundamentals in place than we did the last time around. There is not nearly as much sub-prime lending as there was. Of the last five recessions, home prices went down in just two. Home prices went up in the other three.
Having gone through the last recession, it can be hard to believe that prices can actually rise. But maybe this one will go that way as well.
Each month we bring you stats, data and quotes from various trusted industry sources. These resources will now be available to you in our monthly Housing Market Update recap blog post, which can be accessed from GreenTeamRealty.com/hmu/ under Housing Market Recap.
Local Housing Market Updates
Orange County, New York
It’s been a mixed bag this year. The green line is 2019. It’s fair to say the number of units sold is consistent with 2018. We’re definitely seeing a slowing in the number of transactions. But, it’s still a very high historical level. And it’s still a very strong market. So, yes, it’s cooling, but it’s still a very high rate.
Average Sales Price
The average sales price took a little dip this month.That doesn’t mean that prices will ultimately continue to go down year-over-year over 2018. However, units sold has been slowing. Geoff believes we’ll see a softening of the market, rather than a crash.
Ask to Sold Ratio
The last asking price versus what the house sold for and the ratio thereof. As you an see, this year it’s been high, meaning sellers haven’t had to negotiate much off of their asking price. However, recently we’re seeing a dip, which is worth noting.
Days on Market
The days on market have consistently been lower than the previous 6 years, remaining a strong factor in the market.
Sussex County, New Jersey
There is a similar situation here in Sussex County; a mixed bag, up and down. However, it’s clear that in the last 18 months or so, the number of units sold has been slowing.
It’s interesting that all through this time period average price in Sussex was kind of languishing. And now we see prices taking off,. almost the highest level of prices in the county in almost 8 years. Only July of 2018 was slightly higher.
Ask to Sold Ratio
The ask to sold ratio is again similar to what we’re seeing in Orange County. at 97, 98%, it’s still a strong market with sellers only having to come down a little bit off their asking price.
Days on Market
Days on market are lowest over last 6 years. The market continues to be strong. Further discussion will take place with our panel.
Thank you to our sponsor
Meet our Panel
Keren Gonen is from Green Team New Jersey Realty and is a regular panelist on our Housing Market Updates.
Geoff asked Keren what’s actually happening in the field; if there are signs of the market taking a downturn.
Keren stated that it’s important to note that there are still people buying. still people selling, and there are still bidding wars due to low inventory. On both sides of the border we’re dealing with a lack of good houses. Now that it’s so easy and affordable to buy a good home, it’s really a question of inventory. Some sellers are on the fence, waiting to hear what will happen in 2020. Agents and Sellers would like more inventory to choose from. However, if agents educate their sellers we’ll see a lot more houses on the market in the coming months.
Geoff asked if Keren has found buyers becoming more picky as time goes on. Keren replied that it’s the opposite; Buyers are rushing to put in offers on the houses that they like. She said we want to make sure that good houses on the market do sell quickly, because that makes everyone look good. Whether it’s the listing agent or selling agent, everyone does better in that type of a market.
From the Seller’s perspective, Geoff asked if Keren agreed that we’re not in a market where they can list at any price and sell. Keren stated that surprisingly all the listings she’s had have either come in on point asking price or a few thousand dollars above asking price due to bidding wars. In addition, they’re going under contract very quickly. Attorneys are moving them along, with attorney review much faster than earlier in the year and last year. She had one listing got out of attorney review in literally 48 hours, which was a first for Keren.
Geoff said he was sure that Keren was choosing comparables carefully to make sure the information is accurate and she’s setting a good asking price. She replied, absolutely. That’s the first thing – Listing Agent 101. You want to make sure you do your comps properly so that you don’t sit on the market. Geoff stated that ‘s the message to all Sellers. The hardest conversation to have as realtors is price reduction. It’s kind of like having mud on your face. We’re the ones who bring in the comps, make recommendations on what we feel the fair market is for their home, Many Sellers don’t listen and just want to list at the price they want. But many people do listen. However, sometimes a price reduction is necessary. However, no matter what market you’re in, you have to price it right.
Keren said one of the things she does with all of her Sellers is ask them what their time line is for selling their home. Meaning, are we okay to sit on the market for 3, 4, 5, 6 months? Or are we looking to get an offer within the next month to 2 months. Then, according to what they tell her that’s where she prices the house. She has had clients that tell her they don’t care when they move, the house is paid off and they’re not in a rush. And they want a specific amount for their house. So Keren tells them that’s okay as long as they understand that according to her market analysis, they won’t sell until we reach this price. As long as they understand that, she’s fine with listing it at that price. Ultimately it’s always the Seller’s decision.
Price it right from the beginning. Price it to sell from the get go. You’re likely to get a higher price. There is never a better time to sell your home than when you first list it. It’s new, there are buyers out there waiting for the next house to come out on the market. They’ve been out there looking and haven’t found what they’re looking for yet. Now your home is new and it’s on the market.
Geoff asked Keren what she is seeing as far as bank-owned inventory. He considers Keren to be a leading expert in Sussex County on the subject. Keren stated that they are not seeing too much being released by the banks. Whatever was out there was sold. She hasn’t seen anything new that’s affordable for an investor or flipper or someone who wants to take on renovations on their own. It has been quite a few weeks since she’s seen those. She has seen some that are borderline, with a few things missing, but those are priced too high. There really isn’t any new release of inventory from them.
Geoff then asked if Keren is still seeing bank-owned properties continue to be rented, an anomaly that we’re seeing over the last 5-6 years. As far as Keren knows, they are, remarking that it seems banks now want to be landlords as well. Geoff mentioned some clients who rented a bank-owned property and once they got in there was problem after problem. It was discovered that there was a lot of substandard that had been done. Caution people buying inventory to make sure that the renovations have been done correctly. The flips that Keren has seen by banks are usually bid out to the lowest bidder and that reflects in the workmanship.People can get caught up in the moment; the price seems right. And they may think they’re getting a better deal because the property is bank-owned.
Wrapping it up
Geoff has been in the real estate industry for going on 15 years. He has worked a lot of hours every week during those years and developed a great appreciation for agents like Keren, working in the field.The housing market in this country would not be what it is without the hardworking agents. They keep data accurate, make sure clients needs are met. Other market places around the world are not nearly as well run as they are here. We are getting into an age where it may be possible to just buy a home from Zillow offers, etc. However, the expertise, knowledge and support offered by real estate agents cannot be duplicated. Geoff’s final word… Find a Realtor!
Keren Gonen can be reached at: 551-262-4062.
Green Team New York Realty is proud to announce that Jennifer DiCostanzo and Vikki Garby have reached the 2019 cap for Company Dollar Contribution. We want to congratulate them on the hard work and dedication to excellent client service that helped them achieve this goal.
Reaching CAP means that Jennifer & Vikki will now receive a 100% commission split on any deal they close during 2019. Yes, it’s true – a 100% commission split. At Green Team New York Realty, there are no mandatory fees! No franchise fees, no technology fees, no desk fees, & no e&o fees!!
Green Team Realty’s commission structure is, no doubt, one of the finest in the industry, but it doesn’t end there. Our cutting edge lead generation platform, certified sales assistant program, and dynamic training systems are just a few other things worth mentioning.
If you have never heard of us before, or perhaps you simply haven’t taken the opportunity to check us out, why not take a little time to do so now? Click here to learn more about Green Team New York Realty.
It’s October in Orange and Sussex Counties – and we know what that means!
Fall is in full bloom and pumpkins dot the fields throughout these sister counties. Leaves change color, providing a breathtaking landscape. During October in Orange and Sussex Counties there is a lot to see and a lot to do, culminating in Halloween. And Green Team Realty is delighted to share activities and events with you to help you enjoy this beautiful fall month.
Fall Recipes and indoor and outdoor home projects and decorating ideas for the season
Better Homes and Gardens shares 53 pumpkin recipes, one for every day of fall. As this is a busy time of year for most everyone, how about 20 Make-Ahead Famiiy Dinners from RealSimple.com. Further, Better Homes & Gardens gives us Delicious Fall Comfort Food recipes to enjoy..
And, as the weather cools down, using the oven seems like a fitting idea. So Southern Living gives us 30 Fall Cookie and Bar Recipes Every Baker Needs. Finally, Southern Living also gives us 68 Fall Table Decor Ideas That Will be the Hit of Your Party. These gorgeous seasonal decorations will enhance entertaining and family meals (and dessert), as well. And there are beautiful creations to help you start planning for your Thanksgiving table.
Better Homes and Gardens provides you with 8 Landscape Ideas for Curb Appeal. Of course, this is the time of year for a special kind of curb appeal. HomeBNC has 28 DIY projects to celebrate this time of year. And HouseBeautiful.com has 45 Festive Outdoor Halloween Decorations to Trick Out Your House. There are lots of great ideas for getting into the “spirit” of the season! And while you’re busy taking care of outdoor chores and projects, your slow cooker will be brewing up a batch of Pumpkin Spice Latte!
Orange County, NY – Things to do, places to go
Pumpkin Festival at Hill-Hold Museum. 128 Route 416, Campbell Hall. Saturday, October 5, 12 p.m. to 4 p.m. Pumpkin rolling, face painting, waxing leaves, scarecrow making and hay rides. Refreshments available for sale. $3/person.
Applefest. Downtown Warwick. Sunday, October 6, 9 a.m. to 5 p.m. Vendors, live music and entertainment, children’s carnival, food and, of course, all things apple.
Warwick Children’s Book Festival. Railroad Green Park, Warwick. Saturday, October 12, 11 a.m. to 4 p.m. Live music and visits from 75 children’s authors and illustrators. In case of rain, the event will be held at Warwick Valley Middle School, 225 West St.
Sugar Loaf Arts & Crafts Fall Festival. Kings Highway, Sugar Loaf. Columbus Day Weekend, October 12, 13 and 14, 10 a.m. to 5 p.m. Enjoy arts, crafts, music, food and a beer garden in this charming artisan crafts village.
Sussex County, NJ – Things to do, places to go
Harvest, Honey and Garlic Festival. Sussex County Fairgrounds, 37 Plains Rd, Augusta. Saturday, October 12, 10 a.m. to 4 p.m. Farmers Market, vendors, children’s activities, and a variety of honey and garlic products. There will also be educational displays from the beekeepers. 973-579-0500.
Newton Fall Festival. Spring Street, Newton. Sunday, October 13, 11 a.m. to 3 p.m. Free family event with classic car show, live music, costume contest, vendors and crafts. 973-383-3521
Dog Walk of the Dead. Sussex County Fairgrounds, 37 Plains Rd, Augusta. Saturday, October 19, 5 p.m. to 8 p.m. All proceeds benefit “Oscar: One Step Closer Animal Rescue.” There will be vendors, costume contests, live music, food, a classic car showcase. Most importantly, there will be animal adoptions.
Last – but not least – Things to do on Halloween
And, since October in Orange and Sussex Counties ends in Halloween, take your pick of the events in these sister Counties.
- Check out Hudson Valley Magazine‘s Halloween Guide.
- For New Jersey’s haunted houses and info on nearby attractions, check out newjerseyhauntedhouses.com.
- Heaven Hill Farm’s Great Pumpkin Festival.is the largest Fall Festival in Northern New Jersey. There is plenty of room on this 110 acre farm for the 40 family-friendly activities, and lots of food. Of course, that includes apple cider and apple cider donuts. Plus, there are Corn and Hay mazes, There are just too many activities to list here, so check out the website for activities, days and hours, and ticket prices.451 State Route 94, Vernon. 973-764-5144
- Pure Terror Scream Park and Haunted Houses at Museum Village, Monroe, Thursday Oct 31 – 7:30 p.m. to 9:30 p.m. Friday and Saturday, Nov 1 & 2, 7:30 to 10 p.m. According to the website, Pure Terror is a 9 Haunted House walk through attraction. It’s one of the world’s largest and scariest haunted houses.. Also, there is a huge Halloween-themed midway with lots of music, food and photo ops for everyone. 1010 State Route 17M, Monroe NY. Visit the website for more details. Also, you can purchase tickets online.
- For those that prefer a little less “terror,” Museum Village offers No Scare Halloween on Saturday Oct. 19 and Sunday Oct. 20. 11 a.m. to 4 p.m. Parade around the grounds in not-so-scary costumes and take part in lots of kid-friendly crafts and games. The website will offer more details as event gets closer. 1010 State Route 17M, Monroe, NY. 845-782-8248
And if you prefer to stay home
hgtv.com has 45 Easy Halloween Party Ideas. Whether planning a party for kids, adults or both, there are lots of unique ideas for food and decorations here. Goodhousekeeping.com has 60+ Spooky Ideas for your Best Halloween Party Ever. You’re sure to find some inspiration at these links.
If you prefer to spend a quiet Halloween with the family, redbookmag.com has recommendations for the 47 Best Halloween Movies for Kids. This link will also lead you to easy recipes, crafts and costumes.
Have a wonderful October and a Happy Halloween.