Now is the Time to Buy in New Jersey, Says Real Estate Analyst
- Jan 09, 2009
By Anuradha Kher, Online News EditorMattawan, N.J.–The end of the housing market crunch in New Jersey is in sight, and the market is likely to bottom out in 2009 as credit restrictions loosen with a full swing recovery forecasted for 2010, according to real estate analyst Jeffrey Otteau of Otteau Valuation Group, an appraisal, consulting and market analysis group. Otteau recently spoke to an audience of about 40 people at a home-buying workshop sponsored by American Properties Realty.“Mark my word, 10 years from now, people will look back at the first half of 2009 and say, ‘That was the time to buy’,” Otteau said, citing the near 30-year lows in interest rates as an “opportunity.” Otteau gave a presentation at the American Properties Realty’s Mill Pond in Eatontown, Monmouth County. He provided analysis of the residential real estate market to help buyers make decisions. JPMorgan Chase Bank representatives discussed credit availability and scoring, while Northwestern Mutual went over how buyers’ overall financial health will impact buying a home. Otteau pointed to the handful of developments being built by American Properties Realty such as the Mill Pond at Eatontown, The Preserve at Matawan, The Heritage at Chesterfield and The Jefferson as examples of homes that help meet the need in the “grossly underserved” market in New Jersey for under $400,000. New Jersey is no longer creating higher income jobs, which in turn creates a demand for more moderately priced homes, particularly those close to major transportation highway networks and mass transit, he said. By contrast, there is seven years worth of inventory for homes in the $2.5 million range in New Jersey, he added. In addition to the long-term investment potential of new construction, whose resale values are expected to rise more than that of older homes, condominiums and townhomes will be in particular demand since they are not being built any more in the Garden State unless they are set for age-restricted housing. Although the real estate market is still slow, it is improving, Otteau said. During its peak, developers were experiencing an average of seven sales per month. Now, they experience an average of just one sale per month. Other home-buying workshop speakers also referred to today as a “buyers’ market.” Michael A. Borodinsky, assistant vice president and branch manager for JPMorgan Chase Bank in Woodbridge, stressed that real estate appreciates over time, is not meant for instant gratification and that buyers should buy because the home they are considering is affordable and the location and lifestyle are a good fit for them. “Don’t sit on the fence too long,” Borodinsky said. “When interest rates go up by 1 percent, it is equivalent to the building raising prices by $30,000.”Robert G. Chirumbolo, a financial advisor with Northwestern Mutual of Princeton, offered audience members information about the importance of building a solid financial foundation including home ownership and an emergency fund. “Every 10 to 12 years real estate doubles in value. You could live in it, enjoy it everyday and build equity out of it,” Chirumbolo said. He also offered some steps to financial security including saving money by taking money out of each pay check and depositing it into a 401k or savings plan, and diversifying investments. He cautioned against staying the course in their savings.