Warning, make sure you’ve got your boots on, the bullshit is deep in here.
From the Record:
Prospective home buyers can expect to go to war this spring and summer.
A low housing inventory coupled with high demand will spark bidding wars for houses in the entry- to middle-level home sectors, say local realtors, continuing a years-long trend in the residential real estate market.
“It’s a great time to be a seller,” said Ted Crocco, owner and broker of Bergen County Realty. “It’s not a great time to be a buyer.”
In the Montclair area, the number of days a home is on the market has plummeted, dropping from 77 days in 2012 to 36 days in 2017, according to the real estate firm Stanton Company. Diane Russell, a realtor at the company, said houses can sometimes sell in mere hours.
“If you’re a buyer in the $600,000 to $900,000 range, it’s very competitive,” Russell said. “They’re going through multiple rounds of putting in offers.”
Russell said she frequently has to educate first-time buyers on how much the asking price and sale price can differ. Stanton Company sold one home at 18 percent above the asking price last year, she said.
Homes in Montclair, Maplewood, Glen Ridge and other towns with train stations consistently sell above the asking price, while homes in towns without stations lag behind, both in sales price versus asking price and days on the market, the company said.
For those wading into the residential real estate market for the first time, it will be tough to gain a foothold, said Crocco of Bergen County Realty.
“It’s a difficult time to be a young buyer right now,” Crocco said. “We have buyers that made several offers on several houses offering the asking price or more, and they’re turned down.”
Entry-level buyers are being forced into bidding wars and facing rising mortgage interest rates. The average rate on the 30-year fixed is at its highest level in more than four years and is not expected to fall back, as it did last year.
Higher mortgage rates usually cool home prices, as buyers can’t afford as much and sellers have to accommodate. The difference in today’s market is that there is so much pent-up demand from the largest generation, and the economy and employment are improving. That dynamic could outweigh higher rates, although at some level there has to be a breaking point, especially for young buyers with less cushion in their wallets.
“Affordability continues to slip away from the average buyer. Lower-priced homes are appreciating much faster than higher-priced properties, making the affordability crisis even worse,” said Frank Martell, president and CEO of CoreLogic.