From the Record:
Tired of paying rent, Jorge and Christine Garcia saved up and recently bought their first home: a move-in-ready colonial in Bogota. Though the property had sold for $393,000 in late 2008, the housing bust meant the Garcias were able to get it for only $275,000.
“The downturn in house prices allowed us to stay in Bergen County,” said Christine Garcia, 29, an assistant to a sports-industry executive and mother of a 1 1/2-year-old daughter.
The Garcias’ experience is a stark example of how the starter-home market has changed in North Jersey. In March 2005, The Record ran a story about North Jersey’s vanishing under-$300,000 home. Seven years later, with regional home values down about 27 percent since the market’s peak in mid-2006, it’s now easy to find a home for less than $300,000 in Bergen and Passaic.
In fact, it’s pretty easy to find a home for less than $250,000.
That’s what Sue Choe and Mike Park did. They recently hit “the jackpot,” in Choe’s words, on a Teaneck home in great condition for $241,000, after selling (and breaking even on) their Fort Lee co-op.
“For us to purchase a home so competitively priced allows me to stay home [with my year-old son] and not worry too much about the bills,” said Choe, 33, a former marketing manager. Her husband is a corporate supervisor.
While the drop in home prices is good news for young buyers like the Garcias and Choe and Park, it can be devastating for sellers, especially those who bought at peak prices.
In Bergen County last year, one in four home sales was for less than $300,000; that compares with only 11 percent in 2007, according to an analysis of property records by The Record. In Passaic County, more than half of home sales were for under $300,000, compared with one in four in 2007.
The Record’s look at property records found that under-$300,000 homes were a majority of sales in many towns that have traditionally drawn first-time home buyers, such as Bogota, Bergenfield, Elmwood Park, Garfield, Hackensack, Lodi, Clifton, Wanaque, West Milford and Pompton Lakes. But properties under $300,000 also made up 42 percent of the sales in Fair Lawn, 27 percent of the sales in Mahwah and 23 percent of the sales in Waldwick.
“The long process of downward price adjustments in the housing market has been painful in many dimensions,” said Joseph Seneca, a Rutgers economist. “However, it was, and remains, necessary, to clear what was a badly distorted housing market. Inventories are finally realigning and demand is returning.”
Several real estate agents said the lower prices — combined with mortgage rates below 4 percent — make a compelling case for buying, rather than renting.
“People who are looking under $300,000 or even under $250,000, a lot of times they can buy a house for less than what it would cost them to rent,” said Dominie Healey, an agent with Vikki Healey Properties in Maywood.
If buyers are getting good deals, sellers are facing painful losses — including some so far underwater that they have to write a check to pay off the mortgage when they sell. But many decide to move anyway, because they need more space, have new jobs or want to be closer to their jobs or families, said Frances Rosado, a Coldwell Banker agent in Clifton.
“Some people just need to move,” Rosado said. “What are you going to do, stay in the house for the rest of your life? Or just bite the bullet and go?”
It’s certainly easier for sellers who bought decades ago and are still coming out ahead financially.
Ronald and Patricia Schiller, for example, bought their Clifton home 40 years ago. Now they are retiring to Florida and selling the house for $255,000.
“We would have liked to get more, but we see houses in our neighborhood just sitting there,” said Patricia Schiller.