The Current State of Real Estate

The days of sub-prime mortgages are over, but what’s happening in the real estate market right now in our own backyard? Scotch Plains resident and Coldwell Banker Broker Associate Gina Suriano Barber gives Patch the scoop.

Patch: Is the market up or down now?

GSB: I’m finding overall, the year has not been wonderful. But I’m cautiously optimistic. It used to be our average market time was 60 days, and now we’re well over 90 days, depending on the price point.

Patch: What types of homes are selling?

GSB: Houses under $450,000 are definitely moving. I’m seeing multiple bids on properties in that price range. Some homes that were originally selling at $450,000 have dropped down as low as $400,000. It used to be you could only find a shack for that amount of money in our towns. Now there are some really nice homes out there for not a lot of money.

The high end, however, is still hurting. Anything over $750,000 is staying on the market a long time. People, who could afford those houses, have either lost their jobs or are not getting the bonuses they used to. We’re still waiting for that market to pick up.

Patch: Between Scotch Plains and Fanwood, which market is stronger at the moment?

GSB: Fanwood is doing very well. Every quarter I go to a New Jersey real estate seminar by Jeffrey Otto who says that Fanwood is one of the “best buys.”

In prior years, people were buying out west because they wanted more property and bigger homes—and they were willing to sacrifice the travel time in order to get the bigger house. Now, people are looking for communities with a downtown center that’s easily accessible to the train and the bus. That’s more important to them than the bigger house.

Over the next few years, Fanwood real estate values will increase greater than that of the other towns because of its downtown area, affordable housing, and the easy commute to New York City.

We also have a lot of townhouses being constructed in our towns, and I’m suddenly getting interest from yuppies who didn’t even look at the area before they were built.

Patch: Are there any government discounts or recession breaks available?

GSB: Right now, the government is offering a tax credit to first time buyers or someone who hasn’t owned a home in the last three years. Depending on the buyer’s income, it’s a maximum credit of $8,000. You have to close on your home before December 1 in order to take advantage of the credit.

This tax credit is really helping the real estate market. People are finally getting off the fence and buying again. It’s allowing people, who couldn’t afford a house before, to buy.

Patch: What’s the most important thing a seller should do?

GSB: Price their house well. Price is definitely the issue. Sellers are coming up with a lot of creative incentives for the buyer, but really, you have to be priced lower than the competition to just get people to walk in the door. Unless you’re looking at a first time buyer, who needs to find a place to live, price is really driving the rest of the market.

Staging has also become a very important part of the game. The internet is such a big part of our selling these days. It used to be you looked at the ad in the paper, called the agent, and looked at a house. Now everyone does their homework online, so if your home doesn’t look good online in the photos and visual tours, buyers aren’t going to come in.

It’s important to concentrate on updating the kitchens and bathrooms and neutralizing the crazy color schemes and wallpapers to make your house attractive to the masses. With the online visual tours, you really feel like you’re walking through the house, and it has to look great in order to get a buyer to actually walk through the door.

Patch: What’s going on with mortgages?

GSB: For a while, it was really hard to get a mortgage. The banks are better these days, but people with stellar credit and people, who are salaried employees, are much more likely to get a better interest rate. You really get penalized if you have bad credit or are self-employed. It used to be buyers could put 30 percent down and nobody asked where the money came from. We don’t have that anymore. You really have to show your income now.

Right now, the mortgage interest rates are under 6 percent. Depending on the day, they’re between 5 percent to 5 ½ percent.

Patch: What’s your biggest issue as a broker?

GSB: One of the biggest problems for brokers today is that we find the buyers, but then the appraisals are coming in low. The appraisers can only look back six months, and there hasn’t been much of a sales history lately. I’m finding that's the case more and more in our area, and in other areas as well. Until we start getting more sales, the appraisers won’t be able to give us the high numbers we're used to.

Also, the real estate market lost a lot of the investors who were buying homes that weren’t maintained. The builders used to buy the property and knock the house down or flip it. We don’t have those investors anymore. Either they don’t have the money or they’re sitting on too much inventory.

Most first time buyers don’t have the cash to fix something up. They need something they can move into right away. So the houses that the investors used to buy are still sitting on the market.

These days, the second time buyer won’t even look for a new house until they sell their first house. It’s kind of like a domino effect.

A lot of real estate agents are saying this lag in the business will continue through the end of the year, but I see the light at the end of the tunnel. The market is starting to pick up, especially if your house is priced right and looks great online. There are definitely some good deals out there for both buyers and sellers, especially in Fanwood and Scotch Plains.

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Gina Suriano Barber is a broker associate for Coldwell Banker. A lifelong resident of Union County, Gina serves Union, Middlesex, and Somerset Counties and specializes in the Westfield, Scotch Plains, and Fanwood areas.