Thursday, September 30, 2010

New Jersey New Home Buyers Want Less Cost, Less Square Footage

According to research from economists at the National Association of Home Builders (NAHB), a growing segment of the housing market, first-time home buyers are contributing to an increase in demand for smaller and less expensive new homes.  A recent study conducted by the Department of Housing and Urban Development and the Census Bureau in 2009, "Characteristics of New and First-Time Home Buyers," found that 41% of the 8.4 million households who bought a home between 2007 and 2009 were first-time buyers.

"Builders are increasingly gearing their homes to the needs of first-time buyers, and we expect the trend to continue in the period ahead as the economy begins generating more jobs and more people in their 20s form households," said Bob Jones, chairman of NAHB.  He continued, "New homes are a better match for the needs of the population in general.  Compared to what is typically available in the existing housing stock, they are more energy-efficient, easier to maintain and have designs better suited to today's lifestyles."  First-time buyers for the two years of the study had an average age of 34, compared to 46 for those trading up.

First-time buyers bought homes averaging 1,874 square feet, significantly below the 2,549-square-foot home purchased on average by those trading up.  46% of first-timers bought homes smaller than 1,500 SF.

New Jersey builders are adjusting to these new market trends, using energy-efficient materials and designing plans with less square footage but more flexibility.  Call or email me for some ideas on builders here in Mercer County, and available new home developments.

Joe Giancarli, SA
Real Estate Advisor

Thursday, September 23, 2010

Builder Optimism Cautious and Holding Steady

According to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI), released today, builder confidence in the market for newly built, single-family homes held unchanged in September.  "In general, builders haven't seen any reason for improved optimism in market conditions over the past month," noted NAHB Chairman Bob Jones.

"The stall in the nation's housing market continues," agreed NAHB Chief Economist David Crowe. "Builders report that the two leading obstacles to new-home sales right now are consumer reluctance in the face of the poor job market and the large number of foreclosed properties for sale. However, we do expect that moderate improvement in the job market will help boost consumer confidence and improve conditions for new-home sales in this year's final quarter."

I can help you get into a new home here in Hamilton and other Mercer County townships.  I know the builders and the developments in New Jersey.  Call or email me so you can get that new home with good buyer incentives.

Joe Giancarli, SA
Real Estate Advisor

Housing Starts Up in August

The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced the following new residential construction statistics for August 2010, showing new home starts were at the highest levels in the last four 'post tax credit expiration' months.

Privately-owned housing units authorized by building permits in August were at a seasonally adjusted annual rate of 569,000. This is 1.8% (±2.0%) above the revised July rate of 559,000, but 6.7% (±1.4%) below the August 2009 estimate of 610,000.

Privately-owned housing starts in August were at a seasonally adjusted annual rate of 598,000. This is 10.5% (±11.9%) above 11.9% the revised July estimate of 541,000 and is 2.2% (±9.7%) above the August 2009 rate of 585,000.

Privately-owned housing completions in August were at a seasonally adjusted annual rate of 603,000. This is 5.6% (±12.6%) above the revised July estimate of 571,000, but is 23.7% (±9.6%) below the August 2009 rate of 790,000.

While housing starts are seasonal, and the August figures reflect the height of the building season, this is still good news both for New Jersey builders and buyers of new homes.
Contact me to find out about new home developments in Mercer County and our surrounding areas.
Joe Giancarli, SA
Real Estate Advisor

Friday, September 17, 2010

4 Reasons to Buy a New Home in New Jersey Now

There is a lot of press now about the reasons to buy in this market, and they are particularly true for new homes, for new construction in Mercer County.  Here are 4 reasons to consider a New Jersey new home now.

1.  Builders are offering big discounts.
Homebuilders are getting even more aggressive with their pricing today - they want to move their inventory before winter.  Eddi Fadel, author of Don’t Rent, Buy!, recommends looking at completed new homes 1st because builders are offering such steep discounts. Plus, you’d have a warranty not only on the home itself, but also on the home’s appliances, he said. “Builders want to save their credit, save their brand, save their reputation and clear out inventory,” he said. “They can go buy cheap land today with that cash.” His advice: Walk in with a preapproval for a mortgage, make an offer, then walk away without making a deal if you have to. Chances are, a builder will call back and reconsider that offer rather than let a potential buyer get away.

2.  Mortgage rates are still at historic lows. 
This would help you buy a new home or resale, but think ahead.  In 5 or 10 years, you could have an incredibly low mortgage on a 5 or 10 year-old house, instead of a 30 or 40-year old house.  Which is a better long-term investment?  Low mortgage rates serve as an equity shock absorber. When buyers borrow at today’s record-low rates, they start building equity as soon as they close. This allows new homeowners to have a little give to absorb any ups and downs as housing market continues to gain traction.

3.  Your home will be in move-in condition.
So many houses on the market today are short sales or foreclosures, even here in Mercer County, NJ.  And homeowners who are having trouble paying their mortgage don't have much left for maintenance or improvements.  Your new home will have new appliances, flooring, window coverings - all new.  You won't be buying someone else's deferred maintenance.

4.  You have many choices.
Yes, there is a large inventory of resale houses too, but if you want to consider new, there are many developments here in Mercer County and surrounding areas.

I know the builders and the construction sites, so call or email and let's look at some new New Jersey homes.  Here's a sample of a small Hamilton NJ development, Dogwood Meadows, with 3 lots left and 6 models to choose from.

Joe Giancarli, SA
Real Estate Advisor

New Jersey Multifamily Builders see Encouraging Signs

The National Association of Home Builders’ Multifamily Market Indices (MMI) show that current and expected demand for rental apartments improved significantly in the second quarter of 2010 compared to the first quarter. The current indexes for Class A, Class B and Class C apartments rose to 59.5, 57.6 and 56.6, respectively, increases of more than 15 points when compared to the first quarter and the highest level since 2007.  An index number greater than 50 indicates that the number of builders who view conditions as getting stronger outnumber those who view conditions as becoming weaker.

The MMI measures multifamily builder sentiment based on production and occupancy at the current time, as well as builders’ expectations for conditions over the next six months.  Builders’ expectations for demand in the next six months increased to similar levels.

“Lenders have been unwilling to fund multifamily development, because the inventory of rental housing expanded from traditional multifamily communities to foreclosed and investor-owned single-family homes made available for rent as a means of creating a temporary cash flow until the homes can be sold,” said David Crowe, NAHB’s chief economist. “As the supply of additional units declines and pent-up household formations re-emerge when the labor markets improve, demand for traditional rental apartments will rise. It is possible that the supply of new units will not arrive in time to meet the emerging demand and some shortages will occur in some markets. Even in robust production years, it is only possible to increase the stock of rental units by a relatively small percentage through new construction.”

I can answer your questions on new home developments and builders in Mercer County and surrounding areas.  Call or email any time.  I've been in the building trades for many years here in New Jersey.

Joe Giancarli, SA
Real Estate Advisor


Thursday, September 9, 2010

Some Buyers Choosing New Homes over Short Sales

A recent Florida buyer shared this story with

"'I purchased a new home because I will never ever go through a short sale nightmare again in my lifetime,' said buyer Lynn Buonviri. Her dream short-sale fell through when the seller cancelled without telling anybody, refused to move out, and would not come to the door. The fact that she had just arrived after pulling a trailer 1,000 miles for the scheduled final inspection, did not help. 'My broker negotiated with the bank and owner for 5.5 months. The stress on both of us was incredible, but the idea of going through this again was unbearable.'"

Buonviri chose instead to purchase a new home with a 10-year warranty.  Another buyer interviewed for the story was in escrow on a short sale that cancelled unexpectedly because the seller backed out.  But he closed for cash on a new, upgraded home for about $2/SF less than the short sale.  One obvious fact about new homes - the builder is very unlikely to cancel a sale, especially with the glut of inventory nationwide.

Does there seem to be a trend, which would be welcomed by builders, that new homes are emerging as an alternative to the short sale?  Sean Strickler, Vice President of Sales for the Pulte Group, which builds here in New Jersey, thinks so.  He said that the Pulte-branded communities maintain an inventory home program specific to each community, "While we don't want to overbuild in a particular community, our goal is to always have a quick move -in or two for those buyers who don't want to wait for their home to be constructed."

There are many new home "products" to choose from in Mercer County and surrounding areas.  While you can visit sales centers and spend time looking for them and driving around, you could ask an expert in new homes - like myself - to tell you which developments would fit your needs and price.  I know the builders and the homes - just call or email for information on buying a new home in New Jersey.

Joe Giancarli, SA
Real Estate Advisor

Thursday, September 2, 2010

If You Want to Purchase a Newly-built Home in New Jersey, Here are Some Ideas

Newly-built homes, often in recently developed communities, are much more affordable than in years past. New homebuilders are using desirable, open floor plans in smaller sizes, and helping buyers purchase new homes, with incentives and financing options.  Use these important tips in a new home transaction to ensure that your hopes become reality.

1. Choose a Realtor Who Has New Home Sales Experience

Hire a buyer’s agent to 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.  They want to move their inventory.  If your contract contains a contingency to sell your existing home before buying, hire your own seller’s agent to list your home.

I have experience and local knowledge of all our builders, in Mercer County and surrounding areas.  This expertise is free to you, the buyer.

2. Carefully Evaluate the Builder’s Lender before Committing

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.  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. There are many problems that may crop up when you pigeon-hole yourself to one lender – higher rates and higher closing costs are the two biggest.

Ask to see a copy of your credit report and FICO cores. You can also order your own free credit report before shopping for a new home.

Insist that your lender guarantee its Good Faith Estimate. If the lender balks or makes excuses, go elsewhere. Reputable lenders will honor that request, even though it’s not required by law.  I can recommend several qualified, reputable local lenders familiar with new construction in New Jersey.

3. Check out the Builder’s Reputation

If a buyer has a bad experience with a builder, word spreads rapidly. However, accurately and fairly assessing a builder’s history is the appropriate path.  Check public records for lawsuits or complaints and evaluate their resolutions but, again, if you hire a local Realtor familiar with the builders (me), he or she can be a goldmine of information.

Talk to the neighbors and scrutinize the construction quality of surrounding homes. Is the builder consistently building same-sized or larger than existing properties, or are homes shrinking in size, which could reduce neighborhood value?

Learn if the builder limits investor purchases.  This ensures that the neighborhood doesn’t turn into a “rental” neighborhood, which may appear less well-maintained and reduce property value.

4. Hire a Home Inspector

Many people who buy new construction homes don’t bother to get a home inspection. 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 education about the property, and offers the validation of a trained, independent third party assessment of the structure and systems.

If the inspector calls for further inspection by another professional contractor, find out if the inspector is telling you there could be a serious issue or if the inspector isn’t licensed to address that issue.

5. Obtain Legal Advice before Buying a Brand New Home

All of our New Jersey purchase contracts go through "Attorney Review."  Make sure you understand what you are signing and what contingencies protect you, the buyer.  Ask questions about removal of contingencies and your cancellation rights.  A knowledgeable local Realtor - me - can protect you and explain the contract. 

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.

Your best course of action is to be represented by a local Realtor who knows the builders, their product, their reputation, and what is available in the area where you want to live.  I have that experience.  Call or email me so you can start looking and move into your new home in New Jersey before the cold weather.

Joe Giancarli, SA
Real Estate Advisor

(read more at RISMedia)

Site Meter