Thursday, June 24, 2010

Housing Shortage coming to New Jersey?

"Some experts are saying that the next big real estate problem could be a shortage of homes.  Only 672,000 new homes were started in April. That’s less than half the number needed to meet the country’s average population growth.

In the past, an average of more than 1.3 million households have been built each year, creating demand for 1.5 million new homes. In 2009, only 398,000 new households were formed, according to the Census Bureau.

"The decline in household formation is artificial," says James Gaines, a real estate economist with Texas A&M. "The young are moving in with their parents. There's even doubling up among working-class people. There's a pent-up demand coming if and when the economy recovers."

Some economists believe this analysis fails to take into account the changing economy or the large inventory of vacant properties. But Gaines and others say these factors are unlikely to significantly drive down demand."
Call or email me to find a new home you can enjoy this summer in Mercer County.

Joe Giancarli, Sales Associate
Source:, Les Christie (06/15/2010)

May New Home Sales Down

The US Commerce Department reported that new home sales declined to a record low in May, the first month following the expiration of the homebuyer tax credit. This snapped a two-month streak of gains.  Homebuyers have until June 30 to close deals, but the Senate may vote to push that deadline back to Sept. 30.

New home sales declined 32.7% to a seasonally adjusted annual rate of 300,000 last month, down from an downwardly revised 446,000 in April.  Sales year-over-year fell 18.3%.  This is the slowest sales pace since the Commerce Department began tracking data in 1963. The prior record was set in September 1981, when new homes sold at an annual rate of 338,000.

Anika Khan, an economist at Wells Fargo, expects home sales to remain depressed through the third quarter as home construction continues to contract and lending standards remain tight. But, she said, sales should pick up slightly in the fourth quarter.   She added that numbers are years away from a normal level of new home sales -- an annual rate between 800,000 and 900,000.

This news means builders are anxious to move inventory.  Contact me to talk about new home developments in Mercer County and how you can be in a new home this summer.

Joe Giancarli, Sales Associate

Wednesday, June 16, 2010

May Numbers Show Decline in Housing Starts over April

Statistics announced today by the US Census Bureau and HUD for May, 2010 show building permits for privately-owned housing units in May declined 5.9% below the revised April numbers, to 574,000 down from 610,000.  This number is above the 550,000 recorded for May 2009.

Single-family housing starts in May were at a rate of 468,000; this is 17.2 percent (±7.9%) below the revised April figure of 565,000. The May rate for units in buildings with five units or more was 112,000.

Single-family housing completions in May were at a rate of 507,000; this is 7.8 percent (±9.5%) below the revised April rate of 550,000. The May rate for units in buildings with five units or more was 175,000.

Contact me to discuss ideas on getting your New Jersey new home ready for move-in this summer. 

Joe Giancarli, Sales Associate

Size of New Homes Shrinking

The US Census Bureau has released figures which show the size of single family homes has declined from last year, to a national average of 2,438 SF.  The size peaked in 2007 at 2,521 SF, after rising for almost 3 decades.  Also, new homes in 2009 had fewer bedrooms.  This number topped in 2005 at 4 bedrooms in 39% of new homes, and dropped to an average of 34% last year.  Those with 3 bedrooms rose from 49% to 53% in the same timeframe.

"We also saw a decline in the size of new homes when the economy lapsed into recession in the early 1980s," said NAHB Chief Economist David Crowe. "The decline of the early 1980s turned out to be temporary, but this time the decline is related to phenomena such as an increased share of first-time home buyers, a desire to keep energy costs down, smaller amounts of equity in existing homes to roll into the next home, tighter credit standards and less focus on the investment component of buying a home. Many of these tendencies are likely to persist and continue affecting the new home market for an extended period."

Single-story homes are also increasing again.  In 1973, the first year for which the Census Bureau reported characteristics of single-family homes completed, 67% had only one story, 23% had two or more stories, and 10% were split levels.  Those number also peaked in 2006, when 57% of new homes had 2 or more stories.  Since then, single-family homes with one-story have increased to 47% last year, while the share with two or more stories dropped to 53%.

Regional Differences - how New Jersey New Homes Compare
(as reported by

"In 1973, less than half of all new single-family homes completed had air conditioning; in 2009, 88% were air conditioned nationwide. Regionally, the proportion ranged from a low of 69% in the West to a high of 99% in the South. The Northeast and Midwest were at 75% and 90%, respectively.

"Nationwide, 62% of new single-family homes completed in 2009 had two-car garages, and 17% had garages for three or more cars. However, there were clear regional differences. Three-car garages were found in only about 11% of homes in the Northeast and the South. In the Midwest, 30% of all homes had three-car garages, and in the West, 26%.

"Regional differences were especially pronounced in the selection of exterior wall material. Nationwide, 34% of all single-family homes completed in 2009 homes had vinyl siding, 23% were brick, 19% were stucco, and 13% had fiber cement siding.

Vinyl siding predominates in the Northeast, where it accounted for 74% of the market; wood was a distant second with a 12% market share. In the Midwest, vinyl siding accounted for 62% of the market while wood and brick were at 15% and 11%, respectively.

"Brick was the leader in the South, where it was found in 40% of new single-family homes. 28% of new homes in the South had vinyl siding and 13% had stucco."

Interested in what New Jersey builders use and why?  Contact me and let's talk about what materials are best to use here in Mercer County, and take a look at some sizes and floor plans.  I've been in the building industry here in New Jersey for more than 20 years, so can answer your questions.

Joe Giancarli, Sales Associate

Friday, June 11, 2010

NJ Building Professionals Embrace new Business Model

According to a survey taken by PCBC, a building industry trade organization, home builders become better businesspeople.

Building industry professionals say as a result of the recession, they have become
  • More adaptable, 65 percent
  • More innovative, 53 percent
  • More realistic, 52 percent
  • Wiser, 47 percent
  • Have improved industry-related skills, 43 percent
  • More in touch with the operations of their businesses, 40 percent
  • Have a better work-personal life balance, 36 percent
  • More pessimistic, 27 percent

I can help you find New Jersey builders, in Hamilton, Robbinsville, East and West Windsor, and other Mercer County communities, who have the attitudes and energy to build your new home.  Call or email while there is still time for you to buy and move in this summer.

Joe Giancarli, Sales Associate


Thursday, June 3, 2010

Tips for Buying a New Home in New Jersey

New home construction in New Jersey communities of Mercer County and surrounding areas is finally vibrant again, and offering new home buyers good choices.  New homes are now more affordable, and builders aggressively pushing their inventories.

You need a Realtor representing you who is knowledgeable in new construction, the reputation of the local builders in Mercer, Burlington, Middlesex, and Monmouth Counties, and can help you find good financing.  That would be me ( ).  But also, make sure you consider these steps on your way to making an offer on a new home.

1.  Use your own Realtor.  The builder’s sales agents are paid to represent the builder, regardless of what they may tell you. Some might use high pressure tactics to persuade you to sign a contract. Due to the high-volume nature of brand new home sales, lots of builder’s agents are paid less than a traditional commission; some earn a salary plus incentives, so turnover is important to their livelihood.  Your own agent (me) will represent you, act as your fiduciary and disclose the positives as well as the negatives about the transaction. Builder’s agents don’t discuss drawbacks.

2.  If you have to sell to buy, use a Realtor for the sale.  If your contract contains a contingency to sell your existing home before buying, hire your own seller’s agent to list your home. Be aware that buying before selling is not always in your best interest, as hard bargaining goes out the window once you’ve emotionally left your home.

3.  Evaluate the costs and integrity of more than one lender.  Builders often prefer their own lender because the builder will be kept fully informed of your personal progress; it’s one-stop shopping for a builder. However, a builder’s lender might not offer you the best deal. This is particularly true if the builder actually owns the lending company (the case in some of the largest construction companies).  Builders will offer huge incentives to get you into your new home; sometimes up to 15% of the value of the home. However, they will often put one big stipulation on those incentives – that you use their lender.   You want to shop rates and closing costs before you commit.

4.  Do your personal homework.  Get a copy of your credit report.  Know your FICO score and any past due payments that might show.  Have this in hand before you start shopping.  Once you have decided on a lender, it is mandatory you are given a Good Faith Estimate of costs.  If the lender balks or makes excuses, go elsewhere. Reputable lenders will honor that request, even though it’s not required by law.

5.  Do homework on the builder.  This is one area where a Realtor (me) representing you (the Buyer) will be invaluable.  If a buyer has a bad experience with a builder, word spreads rapidly throughout a community. However, accurately and fairly assessing a builder’s history is always appropriate.  Check public records for lawsuits or complaints and evaluate their resolutions; this is all easily accessible now online.  I've been in New Jersey new home construction for more than 20 years, and know the reputations of all the local builders.

5.  Step back and look closely at the neighborhood.  Scrutinize the construction quality of homes surrounding the lot you've chosen. Is the builder consistently building same-sized or larger than existing properties, or are homes shrinking in size, which could reduce neighborhood value?  Does the builder limit investor purchases, or require owner occupants?  These stipulations ensure that the neighborhood won’t turn into a “rental” area, which may appear less well-maintained and reduce property value.  Often, the owner-occupant requirement could be only for an initial time frame, before they are allowed to rent.  Check the fine print.

6.  You need a home inspector even on new construction.  Most new homes come with a one year “bumper to bumper” warranty that includes everything, and many home buyers feel that they can find out if there are any construction flaws during those 12 months. The problem is that many problems won’t surface until well after the 12-month warranty has expired.  An inspection provides you with education about the property, and offers the validation of a trained, independent third party assessment of the structure and systems.  If the inspector suggests further inspection, be sure you understand if the issue is a serious problem or he/she just isn't licensed to investigate that particular phase of construction.

7.  Use an attorney.  New Jersey real estate contracts require Attorney Review.  Be sure you go over the contract with your Realtor (me) and make sure the language and contingencies protect you.  Make sure you understand your cancellation rights, your liabilities, and your commitments.

8.  Consider the environment.  Find out if the materials used by the builder contain chemicals that are hazardous to your health. If your contract contains a warning about health issues, it’s probably because it’s a valid concern and other buyers have gone to court over it.

You are probably thinking that buying a new home is a lot of hassle and could be a lot of trouble.  Just call or email me - let's talk about it.  I have the experience and local expertise to guide you through buying any new home in New Jersey.

Joe Giancarli, Sales Associate

New Home Sales Rose in April

According to data released by the U.S. Commerce Department, sales of newly built, single-family homes surged 14.8% to a seasonally adjusted annual rate of 504,000 units in April 2010.  This was the strongest level of new-home buying activity since May 2008.

“The surge of buying activity we have seen in the final two months of the tax credit program has been very encouraging, and has helped builders work down their standing inventories to near historic lows,” said NAHB (National Association of Home Builders) Chief Economist David Crowe. “It stands to reason that this activity will level off over the next few months, as sales that would have occurred during that time were likely pulled forward to meet the April deadline. That said, today’s favorable home buying conditions, the recovering job market and reviving consumer confidence should help take the place of tax incentives to generate buyer demand.”
The nationwide inventory of new homes on the market fell 5.8% to 212,000 units in April, its slimmest measure since October of 1968. Meanwhile, the month’s supply at the current sales pace declined from 6.2 in March to a modest 5.0 in April, the lowest since November of 2005.
Interested in a new home in Mercer County?  How about Burlington, or Middlesex, or Monmouth Counties?  Call or email - I can help you find a good builder and the best buyer incentives for a New Jersey new home.
Joe Giancarli, Sales Associate
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