Sea Isle City Real Estate

What does that mean exactly? OPPORTUNITY!

When there are more Sellers than Buyers, conditions favor the Buyer. Currently, conditions really couldn’t be better for a Buyer at the Shore. Although the real estate market has begun to turn around; almost twice as many sales have occurred in Sea Isle in 2007 versus 2006, average sale prices are down 10 – 20% since the peak of the market in 2005. There is still ample inventory, and mortgage interest rates have dropped once again (current fixed rate mortgages are in the low 6% range).

What does all this mean to a Buyer? Opportunity!

What may have cost $650,000 2 years ago, now is selling for $550,000. The real cost of that money is less, as the interest rate on the loan is lower. And, there are more homes on the market to choose from. Opportunity!

“When people are buying, sell. When people are selling, buy!”
John D. Rockefeller

Don’t believe the headlines: It’s a great time to purchase and to borrow

That’s right — If you’ve had your eye on the perfect Sea Isle get-away, but put off purchasing because you think mortgages are difficult to obtain, go ahead and take the plunge.

Despite all the press accounts of an industry in crisis, if you’re a qualified borrower and choose the right lender, there’s plenty of mortgage money available.

What does the investor market have to do with getting a mortgage? Typically, mortgage lenders sell their loans in the secondary market to generate money to fund new loans. If a loan becomes delinquent, the investor may ask the Lender to buy back the loan. However, if the lender lacks the capital to do so, the problems start. With delinquencies in some areas of the country rising, many investors have backed off purchasing loans, leaving mainly government agencies like Fannie Mae and Freddie Mac willing to purchase mortgages, and then, only if they are within the “conforming” limit of $417,000.

What if you need a mortgage greater than $417,000? That’s called a “non-conforming” or “jumbo” loan, and they are still readily available. There are mortgage companies and banks that don’t rely on investors to purchase their loans. Therefore, a customer with good credit, the necessary down-payment, income and reserves, will easily qualify for a jumbo loan.

My best advice is to choose a Lender carefully by researching their financial stability. Once you decide on a lender, make sure you fully understand the terms of the loan product you choose. Make sure it fits your needs and comfort zone.

What constitutes the right lender? Liquidity and the ability to generate it. Most of the mortgage lenders that have failed or are currently in crisis made questionable loans in the past; and as a result, do not have the liquidity to continue lending. With solid lending practices and financial backing many mortgage companies experienced no disruption in lending because they were not dependent on investors in the secondary market to purchase its loans.

Don’t let the headlines scare you. Reliable financing is available to purchase your dream home. Rates are very good and homes are priced to sell. Happy house hunting!

Did you find this information useful? Let me know by posting your comments below or email me at df@njrealtyinc.com

As a Realtor, the question I am asked most these days is: “Has the market hit bottom yet?” My answer today is: “Yes. I think so. I think we hit bottom in early November.” This is my opinion, of course. However, I base my opinion on statistics and what I see, not what I “feel”.

What I see is an awful lot more prospective buyers looking, and alot more properties being sold. Those buyers began to come back to the Shore market in mid-November. The activity noticeably increased. Statistically, the first quarter of 2007 has seen more sales occurring (more than double that of 2006, in fact) than we’ve seen since the Spring of 2005.

I’m not exactly sure why the market stopped so abruptly. There are a number of theories. I seem to think there was more than one contributing factor; interest rates began to tick higher, Hurricane Katrina was scary, thefast pace of the market was intimidating for some. There were other possible contributing factors. When I receive my Masters in economics, I may have a more definitive answer. What I know is that the real estate sale market came to a halt at the beginning of the Summer of 2005.

Is the “correction” over? First, it needs to be said that there was a correction. As I look at sale statistics for the past 2 years, I see a 15% decline in average sale prices in Sea Isle City. Some areas of the market have experienced a larger decline. Land values, for instance, have dropped closer to 20%. I believe that the reason for this is that those prices were driven by developers, speculating on future sale prices. The developers, by and large, are not purchasing anything at all right now.

So, yes, there was a correction. Is it over? Only time will tell of course, but as we head into the Spring there are fewer homes on the market than the past year and more sales occurring than last year. So, I would have to say yes.

Is now the time to buy? Yes. That’s an easy answer. Why? Well, although the inventory is thinning, there are still a good amount of homes on the market. There is a good selection in all price ranges and locations. Also, although I don’t see “desperate” sellers like last year, there are “motivated” sellers. There are also mostly realistic sellers. It has taken some time, but most sellers have been forced to acknowledge market conditions and reduce their prices. Further, we are seeing another strong year in the rental market. That income may help you transition into a second home with confidence.

Historically, prices in Sea Isle have increased by an average of 15% per year over the past 25 years. I’m not sure what the near future will bring in terms of appreciation, but unless you plan to “flip” the property, the long term outlook is bright.

Is it time for you to buy a vacation home at the Shore? That’s a question only you can answer. As a Realtor, I can tell you that I have more confidence in the market today than I’ve had in some time, and that the real estate market here at the Shore is stable. There are good deals and good values to be found. And of course there’s the beach!

This article was written by Drew Fasy, Broker/Owner of NJ Realty, Inc.

Questions or Comments?
I would love to hear from you by email (df@njrealtyinc.com) or by phone at 800-648-9316.

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