Berkeley Township Adult Communities- 1st Quarter Market Update

In August 2005, the Ocean County housing market began a price readjustment stimulated by double digit inflationary prices for the 5 years prior. The effect of this was decreasing prices, an increasing inventory of homes for sale, longer days on the market and stronger buyer negotiations. We believe by mid-summer, prices should reflect a stable holding pattern and by 2008, should begin to see a modest appreciation of homes based on 2007 prices. With inventory still adjusting to this downturn in the market, correct pricing is crucial to attract potential buyers. Buyers continue to appreciate upgrades of newer windows, neutral décor and a very clean, well maintained appearance.
Spring is the best season to list your home for sale. Curb appeal is enhanced by flowering trees and shrubs and the feeling of optimism surrounds us. If you are thinking of selling, call to discuss a comprehensive marketing plan including extensive internet exposure and Crossroads’ proven sale strategies.


Holiday City

Berkeley- Closed 25 Low $117,000 High $310,000
Carefree- Closed 12 Low $134,000 High $194,000
Holiday Heights- Closed 10 Low $155,000 High $319,000
South- Closed 16 Low $147500 High $225,000
West- Closed 12 Low $110,000 High $388,000

Compared to the first quarter of 2006 with 103 sales, the market has slowed by 25%+. The average days on the market have lengthened from 68 in ‘06 to 87 in ‘07.

Silver Ridge Park

East- Closed 3 Low $110,000 High $155,000
North- Closed 4 Low $175,000 High $217,000
West- Closed 9 Low $126,775 High $210,000
Westerly- Closed 7 Low $125,000 High $219,000

Average days on the market has gone from 74 in ’06 to 105 in ’07. Average sales price in ’06 was $185,539, $169,000 in “07.

Available For Sale By Model on March 28, 2007
Sarasota 18 homes, Lakeview 83 homes, Sussex 19 homes,
Monterey 3 homes, Manhattan 6 homes, Chatham 10homes,
Shoreview 21 homes, Castle Harbor 23homes, Rochester 2 homes
Capri 45 homes, Yellowstone 36 homes, Yorkshire 20 homes,
Greenwich 2 homes, Lexington 7 homes, Glen Ridge 5 homes

A total of 297 Holiday City Homes For Sale
A total of 65 Silver Ridge Park Homes For Sale

Notes From All Over…

In data reported from the US Census Bureau, the number of vacant houses for sale nationally jumped more than 30% during the 4th quarter 2006, to about 1.9 million.

It is expected that new mortgages will value in the $2.3 trillion in 2007. The record, in 2003, was $3.8 trillion.

According to Forbes, the most expensive US house for sale is in Bozeman, Montana. The 55,000 sq. ft. ski getaway called “The Pinnacle” is listed for $155 million.

NJ has the 4th most expensive rental housing market in the US.

Latest Trends in Home Updates For Buyer Appeal

A nationwide survey of real estate professionals includes a list of home features which are popular among buyers in 2006. As home décor changes with design influence from new products, buyers want the latest, and hopefully, not trendy, home improvements.

As an example, the inability to keep stainless steel appliances, glass-front kitchen cabinets and vessel-style bathroom sinks clean, has caused them to move out of favor with buyers.

Here are what buyers are looking for in 2007:

Glass tile comes in many colors and adds reflective qualities to the kitchen and bath.

Stone compounds for countertops come with bacteria killing agents and cost less than granite.

Home offices and theaters wired for cable and internet.

Storage in pantries & for linens and luggage.

Another Eminent Domain Case Goes Supreme

A developer in Port Chester, NY had planning board permits to build a CVS pharmacy but also needed approvals from the private company hired by the city to redevelop this blighted zone. The company spokesman overseeing the zone told the developer that he would have to pay $800,000 or a give a 50% stake in the CVS, or they would seize the property under eminent domain and build a Walgreen’s instead. The developer refused, the city initiated action. Now it goes to the high court.

Tax Rules For Rental Properties

Because of current tax laws, if your home has lost value since you bought it, you can not deduct the loss when you sell it. To hedge this, some people consider renting the house for a year so the loss can be applied later.

Not so. IRS rules say that the value of the home at conversion (from owner occupied to a rental), less depreciation during the time it is rented, would be the property’s cost basis for determining a loss. Only further decline while it is a rental can be deducted.

Get Ready To Buy Your First Home!

There has never been, in recent years, a better time to consider buying your first house. Mortgage rates are low and housing inventory is abundant. Single family homes and condominiums in many price ranges, with many differing amenities are ready for your consideration. Prepare, so when the right property presents itself, you’ll be ready.

Here are some tips:

Talk to a real estate professional. They will be able to advise you on available properties, costs involved, mortgage, and credit repair if necessary. There is no charge to buyers for these services.

Organize your documents. You will need a pay stub, W-2 and bank statements to apply for a mortgage.

Get preapproved for a mortgage. This will let you know the home you can afford.

Play house. It’s good practice to bank the amount of money you will need each month to own a home.

Consider all costs. The mortgage is not the only cost to home-ownership. Consider that repairs, home improvement, insurance, utility bills and taxes will add to your monthly expense.

Notes From All Over…

New rules in the investor market – Buy and Hold. Before investing, compute whether the property can cover itself as a rental for 3 to 5 years - the day of fix and flip is behind us.

According to Brookings, for the first time there are more poor residents in the suburbs than there are in central US cities.

The average US household spends 19% of its budget on transportation, rendering location a key component of housing affordability.

It’s expected that the rate of mortgage delinquencies will be 5% by mid year, highest since 2002.

Most $$$ Home 2006

An English-style, 10,000 sq. ft. home on 63 acres just 5 miles from Manhattan in Alpine, N.J. sold for $58 million and was the 2006 top selling US home. In 2006, homes sales priced over $5 million were up 11% over 2005.

Tips for Pet-Owning Sellers

As adorable as your Fido or Fifi is, not everyone appreciates domesticated animals. Some buyers have a fear or allergy to cats or dogs which will make them flee! Other potential buyers can become so enamored with your pet, they remember the pet, but not your house when they leave! Often, pet owners can not have a lock box because of unruly pet behavior, limiting showings.

Here’s some practical advise to quicken the sale.

Remove pet photos, pet toys, pet bed, etc. from primary areas. Living, dining, bedrooms, and den should be pet neutral. Hide pet food and water bowls during show times. Use air fresheners to neutralize pet odors. Hire professionals to clean any carpet stains. Take pets out for the day during open houses. Repair any signs of pet damage such as scratched doors or chewed moldings.

Eminent Domain – Open Space

In late November of 2006, the NJ State Supreme Court endorsed the right of a township to seize a parcel of land slated for development if it wants it for open space. Mount Laurel, N.J. reversed previous approval on a 16 acre/23 lot subdivision because of the potential cost of schooling the children who would live there. The court said limiting the number of potential new school children was a valid reason for the condemnation, underscored by the open space ballot approvals over the years.

Consumers Still Gravitate to Full-Service

According to a 2006 NAR Profile of Home Buyers and Sellers, 83% of sellers use a full service real estate brokerage to handle their home sale. Nine % use a limited service brokerage and 8% use a minimal service broker, such as only listing the property on the local MLS. Of those who used a full service broker, 71% were very satisfied, 24% somewhat satisfied. Fifty percent of sellers using minimal service say they were dissatisfied with their experience.

NJAR Goes To Bat For State Homeowners

On January 26th, 2007, the New Jersey Association of Realtors® distributed a letter to our Governor and all members of the Legislature regarding its concerns of the availability and affordability of homeowner’s insurance. The letter urges the governor to focus on the issue before the situation becomes a crisis. The letter also encourages the legislature to support A3236, a bill that would appropriate $10 million to establish a “New Jersey Catastrophe Fund”. This fund would help to protect the insurance industry in case of a natural disaster.

A representative from the NJAR testified regarding its support for A3236 during the Assembly Financial Institutions and Insurance Committee hearing on January 18th.

The NJAR encourages all homeowners who have had insurance problems to bring it to the attention of their local legislator.

Notes From All Over…

Former Federal Reserve Chairman Alan Greenspan announced in an interview in late November 2006 that the “worst of the housing adjustment is over and sales figures have stabilized”. Greenspan is working on an analysis of the effect of mortgage wealth on consumer spending, with data from 1968 to present. The thesis is whether extracted home equity is “acting as a proxy for all types of financing of goods that would have been bought anyway”. It is unclear when the analysis will be complete, but Greenspan’s long history as the FED chairman gives him good perspective to review these statistics.

Digital mapping and associated services are being enhanced by Global Positioning System receivers. This is adding to the quality service Realtors® can offer with neighborhood demographics, relation of home to school, worship, shopping.

REITs focused on offices are likely to outperform those specializing in industrial or retail.

Farm land seems more valuable as it is projected that by 2008, 25% of corn will be used for ethanol production, compared to 6% in 2000.

Realtors® are optimistic that 2007 will be a great sales year!

Commercial Index Rises

The Commercial Leading Indicator for Brokerage Activity, which the NAR uses to measure the commercial real estate market, increased for 6 consecutive quarters showing that continued growth can be expected in the commercial real estate sector. The indicator now is at the highest level since 1990. The index measures 13 variables that reflect future activity. Of the 70-90 million sqft. expected to be absorbed in the 1st quarter 2007, new construction cost $315-325 billion.

National Assn of Realtors® Plans New Ad Year

The National Assn. of Realtors® ‘s national public awareness campaign has given Realtors® an edge as 73% of the public have a more favorable opinion of Realtors® since the ads started. The 2006 campaign focused on the ethic training requirement and was run on radio and TV.

Plans for 2007 include expansion to year round advertising on prime time shows, cable and major league televised sports events. Advertising on Spanish speaking channels will be increased, reflecting the number of qualified Hispanic buyers.

According to a 2006 poll regarding agents’ services, consumers believe:

Realtors® take care of the details of buying and selling a home (68%)
Realtors® are a good source of info regarding financing, inspections (62%)
Realtors® more effectively promote sales than home sellers can (63%)

First Time Buyer Funding/Specialist Available

In real estate terms, a first time buyer is anyone who has not owned a home for 3 years. Special funding is now available for those who qualify. In January and February of 2007, Crossroads Toms River Office extended it's Tuesday and Thursday nights hours from 6-7PM with a first time buyer specialist on duty. Joe Zavatsky, a 29 year veteran of the real estate industry, has helped many people to buy their first home. Mortgage rates are down, inventory is up! All are welcome!

Largest-Ever Real Estate Deal In The Works

The private equity firm of Blackstone Group has agreed to acquire Equity Office Properties Trust, the largest U.S. owner and manager of office buildings which is believed to be one of the biggest real estate deals of all time.

Blackstone agreed to purchase EOPT for $20 billion and to assume $16 billion in debt. The closing is scheduled for early 2007, transforming Equity Office from a publicly held real estate investment trust (REIT) into a private corporation.

Optimistic Forecast For 2007

In spite of the well publicized real estate slump of 2006, the agents at Crossroads Toms River West Office made successful gains in standing in the Monmouth Real Estate Board roster by moving from #28 in 2005 to #20 in 2006 out of 476 registered real estate offices in Ocean County. Our seasoned professional agents, several new programs, comprehensive marketing plans and quick adjustment to changing market conditions all contributed to this achievement.

Looking forward to 2007, mortgage rates continue to be low, new jobs continue to be created and rising salaries are creating additional demand for homes in our area. Market performance in the past 2 months indicates a stabilization of the “slump of 2006”. State-wide, the number of homes for sale declined for the last 3 months of 2006 allowing inventory to be absorbed. A new tax break for 2007 buyers will come in the form of a tax deduction on mortgage insurance premiums (PMI), typically one-half of 1% of the mortgage. Investment property purchases were approximately 17% of the sales of 2005. Investors who contributed to price increases have now left real estate behind and are pursuing other investment venues.

Recent market improvements have been stimulated by lower prices and greater home affordability. Correct pricing will be essential to successful marketing in 2007. If you are thinking of buying or selling in 2007, call us. We offer several advantages and look forward to serving you. 732-244-2200 or 1800-847-4255

Notes From All Over…

Fears of crisis from adjustable rate mortgages are exaggerated. Approximately 82% of American homeowners have fully paid off mortgages or carry fixed rates. Of those with ARMs, only 25% face tightening of the belt when about $1 trillion of ARMs are reset soon at current market rates.

State funded mortgage assistance is now available for 1st time home buyers. The 30 year fixed interest rate is 5.625 for those who qualify – certain restrictions apply and is subject to change without notice. Call our Toms River West office for more info 732-244-2200 or 1800-847-4255.

NJ voters approved the property tax reform question on the November 2006 ballot which designated half of the 1% increase in sales tax for property tax relief. It is yet to be defined what “property tax relief” is, or how the money would be used for that purpose.

An exemption that limits the number of high-income tax payers who pay the alternative minimum tax expires at the end of this year. An estimated 19.2 million additional taxpayers nationally will lose all or part of their deductions for mortgage interest and local property taxes and increase their income tax bills on average $2,390.

Brick, New Jersey - America's Safest City

In late October 2006, Brick was named the Safest American City in the 13th edition of City Crime Rankings, an annual reference book on crime statistics published by Morgan Quitno Press, a publishing and research firm. Brick has ranked one of the top 5 for the last 6 years. The Safest City Award is based on 6 crime categories – murder, rape, robbery, aggravated assault, burglary and motor vehicle theft in communities of more than 75,000 people.

Real Estate and the Internet ~ New Report

The National Association of Realtors® recently completed a study on the effects of the internet on real estate activity.

80% of buyers begin their search for a home online
95% are looking for property
4% are looking for an agent to work with
29% of buyers found their home on the internet
37% found their home through print advertising
88% of consumers use email to communicate with their agents
78% of buyers will not look at listings without pictures
98% of buyers expect multiple photos and virtual tours

Even before this study was announced, Crossroads Toms River West sales agents included a minimum of 6 photos with each listing and now offers virtual tours as part of our full real estate services to attract the attention of surfing buyers.

Realtors® Contribute To Memorial

At the 2006 national convention in New Orleans, the board of directors of the National Association of Realtors® pledged a $1 million donation to the Martin Luther King Memorial to be built on the National Mall in Washington DC. The Realtor® logo will be featured on the memorial’s web site and advertising. This contribution reinforces NAR’s commitment to fair housing and diversity. While at the convention, 1,500 Realtors® participated in rebuilding activities, donating more than 8,500 hours.

Berkeley Sues Dover Over Betting Parlor Site Plan

Berkeley Township challenged the Dover Township Planning Board’s “courtesy” site plan review on September 6th,2006 of a proposed off track wagering facility on Route 37 West, near the Berkeley boundary. State voters approved off track wagering in 1996. The proposed 759 seat facility in the old Grand Union building would have a bar and a restaurant along with wagering options. The Berkeley mayor questions whether this was the intention of the statute and whether adequate notice was given residents to object.

Aqua America Buys Berkeley Water Company

It was announced in October 2006, that Aqua America Inc., the largest publicly traded water company based in the US, has purchased the Berkeley Water Company for $4.2 million. Aqua American is poised to make $1 million in capital improvements over a 14 month period. Wells will be upgraded to improve water quality and radio frequency read meters will be installed so they can be read remotely. The system serves 12,000 residents.

Notes From All Over

Copper prices, 125% higher than in 2004, are leading builders to substitute with plastic plumbing fittings. Investment in tools specific to plastic indicate that even if copper goes down, copper plumbing is a thing of the past.

Boomers looking for retirement homes want extra square footage of living space and are happy to take it outdoors with luxury pool areas and outdoor kitchens.

If you have done renovations to your home, be sure and check for adequate insurance coverage.

Misunderstanding About Home Auctions

Perhaps you have heard that home sale auctions are making a come back with the down turn in real estate sales. Home auctions were popular in the 1980’s and 90’s as a last resort for desperate sellers. A resurgence of home auctions has begun in California and popping up in Oklahoma and Virginia.

A Leeburg, Virginia firm reported auctioning 57 homes from Jan-June of 2006, up from 11 in the last 6 months of 2005. California real estate trends often acts as an indicator of soon- to-be trends here.

Auction services often exceed 10% commission and sellers pay upfront for advertising and marketing.

Chris Mayer of Columbia Business School say sellers have it backward. Auctions work best in a strong market where there is plenty of demand and determined bidders to push the price up.

Slight Ease in Home Sales

The residential market is experiencing a slight rebound after a 9 month decline as buyers take advantage of softening prices and stable interest rates. State-wide, unsold inventory of homes on the market increased only 1% in August 2006, compared to a 47% increase in the first 6 months of the year. First time buyer sales have been steady since they do not have a home to sell in order to purchase. Adult community sales have slowed as buyers have had a hard time selling their primary residence.

Fingerprinting Now Required

As of September 5th, 2006, real estate professionals applying for a license in New Jersey will be required to provide digital fingerprints.

The new regulation applies to all new applicants for licensure through the New Jersey Real Estate Commission including real estate salespeople, brokers or instructors. Along with fingerprinting, applicants will be giving written consent for a criminal record background check.

Pricing Is Critical in Buyers Market

With the changing real estate landscape, our fiduciary obligation to our clients is more valuable to our clients than ever before. For the past 5 years, it has been relatively easy to price a property. A check of other closed (during the last 4 months), under contract and properties currently on the market in the Multiple Listing Service, adjustment for improvements and add 5-10% was a quick evaluation of an anticipated sales price.

Today, pricing has never been more critical or difficult. Some sellers refuse to accept that prices have leveled off and use their friends’ or neighbors’ home sale from a year ago as their benchmark. Others, recognizing the changing market, are confused about deciding on a price.

In a transitioning market, perceived value is more important than price. Compared to other homes listed, it’s not only the square footage, neighborhood, bedrooms and baths which entice a buyer. The over all condition of the property indicates how much money the buyer will have to invest in updates to make this property compelling. Landscape, replacements less than 2 years old, bath and kitchen renovations all add greatly to the value of the home.

The right price will excite buyers – creating an urgency and competition to the sale. Be prepared to re-price early and often. Days on the market, the number of showings, new listings and seller motivation triggers on-going price evaluation until you get a good offer.

Smart Investments Still Out There

As housing prices return to what they were in 2004, appreciation is expected to be a more normal 3-4% for the next couple of years. This should not dissuade investors from keeping their eye out for opportunities to make money in real estate. With the market shifting, sellers are becoming more realistic and motivated. A motivated seller can mean a buying opportunity for an investor.

With commercial properties, investors can’t count on short-term appreciation or a quick flip, but they can expect steady income. In most areas, medical buildings and small strip malls will hold long term value.

Sadly, we can expect to see more home foreclosures as sellers are unable to find a buyer for their property. Anticipate renting these units for 2 years minimum.

Pre-construction incentives on condos, townhouses, and new developments can add up to major upgrades, with good return down the road on resale.

The value of shore and vacation properties should not be underestimated.

Notes From All Over

Compare interest rates for the best return on your cash rates at http://www.bestcashcow.com/. 83% of 2nd home buyers are married baby boomer couples with no children at home.

32% of workers who say they visit non-work sites while on the job look at real estate. Another show of the value of internet marketing.

25% of job growth since 2002 has been real estate related - building, finance, design, furnishings, landscape, etc. Fewer house sales will play a big part in slowing job growth.

Zillow Allows Home Owners To Update Info

Zillow, the Seattle based internet site which came on-line in February 2006, offers estimated home valuations and other property data on over 68 million homes in the USA. Zillow takes the home information from public tax records and suggests a sale value of the property. The limitation of the site was that upgrades and other distinctions of the property could not be added to the base comparison. Now consumers who notice their information is not up to date can add more current info and post commentary on the site.

To use Zillow’s opened database, home owners must register under their name and claim their home owner record through a verification process. All owner provided information will be displayed alongside Zillow’s existing data for that home. Go to www.zillow.com for more details.

Landlords– New Legislation

In July 2006, legislation was signed into law by Governor Corzine extending window guard regulation which applies to multiple dwelling rentals to include condominiums and cooperatives. The new law requires the landlord or rep to verbally inform the tenant, at the time the lease is signed, of the tenant’s right to request installation of approved window guards. A specific form must be signed by the tenant that this has been complied with. If you need a copy of this form, call our Toms River West office 732-244-2200 or 1800-847-4255.

What’s New? Designer Homes

You’ve heard of designer jeans and handbags? Martha Stewart homes in North Carolina, Giorgio Armani’s Wall Street condos and Mick Jagger’s daughter Jade with a 57 unit building the Chelsea section of Manhattan are all selling quickly and buyers want the celebrity distinction. Stewart’s designs, based on her homes in Maine, Conn., and New York sell from $200,000 –500,000 and are the winning ticket for KB Homes, now building in Atlanta, Houston and LA.

Toms River Featured on Good Morning America

Once again Toms River was featured on national television as Good Morning America challenged New York power broker Barbara Corkoran to prove her claim that she could sell any house in 5 days.

The challenge was to sell a bi-level style home in the Deer Hollow section of Toms River which had been on the market for six months with no offers. During a five minute segment on Good Morning America for six consecutive days, Barbara talked about the ways to bring a sale.

The first point was outside grooming to create more curb appeal. The block driveway was power washed, mulch was added to flowerbeds and the back patio and yard were stripped of furniture, toys and grilling equipment, accentuating the large yard.

Day 2 suggested removing clutter from the house. The owners rented a POD and filled it with boxes of items to be stored, excessive furniture and items from the garage. Removal of these items made the rooms seem larger and de-personalized the space.

Day 3 and 4 showed the décor being enhanced by neutral paint, stylish bedding and removal of room darkening window treatments.

Day 5 focused on signage to promote the Sunday Open House.

The house was originally $349,000. The broker suggested a price of $299,900 but the seller would not list below $339,900. The climax of the challenge was an Open House. Eighty people came to view the property but it did not produce a sale.

Pending NJ Legislation Impacts Home Owners

AR163– This bill urges the Federal government to provide funding to the US Army Corps of Engineers for coastal projects in NJ as allocated by the Federal FY ‘06 Energy and Water Development Appropriations Act. Reported out of committee with committee amendments and read in the assembly on May 15, 2006.

A1168– This bill would provide sales tax exemption for certain home improvement materials purchases. Helpful for flood or storm victims to encourage insurance companies to continue to insure homes in high risk areas. Introduced on January 10, 2006 and referred to Assembly Housing and Local Government Committee.

A2585– This bill would revise the fee schedule for property tax assessment appeals and reduce the amount a homeowner will pay when appealing an assessment. Introduced to the Assembly and Senate in February 2006 and referred to Committees.

A2742– This bill proposes to increase the gross income tax exclusion for sale of a principle residence so individuals who have experienced large gains in the value of their homes can use the profit for retirement and other needs instead of paying state income tax. Introduced and referred to Assembly Housing and Local Government Committee in March 2006.

Notes From All Over

NJ minimum wage increased to $7.15 beginning October 1st 2006.

Corzine’s team is still reviewing suggestions for property tax reform. One idea is a 4% cap on increases.

Statewide, property taxes increased 6.9% since 2001.

Inflated real estate appraisals are under scrutiny where loans were to sub-prime borrowers who are particularly vulnerable to default if they owe more than their home is worth.

Nationally, Real Estate Agencies are moving away from print advertising to internet ads.

Market Changes Affect High Priced Homes the Most

According to the most recent report from the Otteau Group, one of New Jersey’s preeminent appraisal and real estate market analysts, Ocean County is experiencing a market transition wherein buyers have greater bargaining power than any time since 1991.

According to their report, contract sales thru July 2006 were down 19% and unsold inventory was up 62% compared to 2005. For homes priced under $600,000, there is a 9 month inventory supply; $600-$1 mil a 21 month supply; $1 mil-$2.5 mil a 17 month supply and over $2.5 a 60+ month supply. This indicates that moderate priced houses will see the first recovery from the current downswing.

With mortgage rates down, buyers have an many excellent choices for a home purchase now. We are still recommending seller incentives to attract a sale.

Support Farmland on Your License Plate

With strong support from open space advocates and state farmers represented by New Jersey Farm Bureau, NJ Motor Vehicles offers an agriculture specialty license plate. The commission reports that 8,137 “Promote Agriculture” plates have been sold. Pinelands (7,416 sold), Liberty State Park (7,462 sold), Coastal Protection (16,332 sold), Protect Wildlife (52,091 sold), Conquer Cancer (47,436 sold) and Animal Welfare (46,521 sold) are other plates available from the Motor Vehicle Dept.

Home Remodeling Slowdown

Total spending on fix-ups headed to a 4% gain in 2006, about half of what was originally projected at the start of 2006. Even homeowners who have a lot of equity in their houses are reluctant to cash out for home renovations, wondering if now is the right time to re-invest in their house. Slowing sales of existing homes and the question of interest rate changes add to the caution. It is now thought that 2007 will see only a modest gain in remodeling, about a 3% increase.

Seller Incentives Promote Quicker Sales

Crossroads is celebrating its 40th year in real estate in Ocean County and has weathered the trials of the cyclical nature of the real estate market. Now, when we are experiencing a slowing trend in home sales, you can rely on Crossroads agents to put our past experience to work for you. With inventory at a 9 month supply, buyers have a large selection of homes to choose from in any price category, and the urgency of the seller to relocate initiates many price reductions. But we also believe there are other avenues to stimulate buyer interest in your home.

For sellers who want to bring your house to the attention of an MLS full of active agents, here are some tips to stimulate interest:

Replace ALL kitchen appliances with new ones. Any kitchen update adds instant value, and coordinated brand new appliances would capture every buyers’ attention. Much more pop than a same cost price reduction.

Offer to pay the one time association fee at closing OR a years worth of association fees to tempt buyers to YOUR community.

A buyers’ agency bonus is a great incentive to make your home one of the first shown.

Offer to transfer your home owner insurance policy to the new buyer and pay it up for a year.

Have your home and windows professionally cleaned so the house sparkles and gives a buyer a “good feeling” not found in other homes.

Call Crossroads to discuss other incentives to help sell your home.

Buyers Have Differing Views on Home Ownership

Baby boomers, those born between 1946-1964, were urged to buy their first house when their growing family required more space. They planned to stay put until the children were out of school, and sometimes to keep the family home to share with their grandchildren too.

Generation X, those born between 1965– 1978, and Generation Y, those born between 1979– 1994, are buying for a safe financial investment.

Other differences of perspectives include: Gen X bought their first home later in life than Boomers yet Gen Y are buying at a younger age. Gen X and Y spend 25% of their income on their purchase whereas Boomers spent only 21%.

Fifty-nine percent of seniors view their home as a retirement asset, though only 26% plan to use it to finance their retirement. Thirty-six percent plan to leave it to their heirs. Four percent plan to take out a reverse mortgage and 4% plan to take equity from their home for improvements within the next year. Currently 18% of seniors downsize to Active Adult Communities.

Notes From All Over

36% of residential sales transactions in 2005 were marred by title problems, up from 25% on 2004. Recording errors and payoff of liens caused most of the problems. Twelve US cities, recognized for maintaining the original look of their communities, were added to the National Trust for Historic Preservation this year. Info go to www.nationaltrust.org
Bills proposed for consideration of the NJ legislative session include exemptions from realty transfer fees for military families.

US Supreme Court—Wetlands Ruling

In mid July of 2006, the US Supreme Court surprised the public with a wetlands ruling favoring developers. Two property rights cases sought to clarify federal wetlands regulations. At issue was the geographic extent of areas to be regulated, and the type of activities deserving such regulation.

In a split decision, the court appears to have favored landowners by limiting the regulatory reach of federal agencies. In the deciding opinion of Justice Anthony Kennedy, only wetland areas shown to have a “significant effect on the biological integrity of a navigable waterway” should be subject to federal wetlands regulations. There have been instances of farm fields being classified “wetlands”, though there was never enough water to make a “navigable” stream. However, it could take years before regulatory definitions are clarified.

In Case You Were Wondering…

Many New Jerseyans were shaking their heads in disbelief at the state shut down while the budget was being resolved in July 2006. While the question begging to be answered was how the state can increase revenue and reduce real estate taxes, the state shut down cost plenty. The state lost $15.5 million in state lottery revenues, $4 million in fees from the loss of business in casinos in Atlantic City, and the pay from 45,000 state workers who had a nice 4 days off as a paid 4th of July vacation!

Overhaul of Major Lenders Stalled

Accounting scandals have brought Fannie Mae and Freddie Mac under the scrutiny of Congressional reform. In an attempt to tame the 2 giant mortgage companies, Congress has capped Fannie Mae’s investments and a lid on Freddie Mac is expected soon. Investors can breath easier as strict limits from Congress that would threaten profits (stocks and bonds) will be postponed. It is expected that time will run out this year to complete the overhaul of these lenders.

Buyers’ Market Options ~ Seller Assisted Financing

As inventory continues to mount in Ocean County, Crossroads agents are working in cooperation with our in-house mortgage company to propose options for seller assisted financing to make homes available to more buyers.

Several mortgage products accept seller concessions of up to 5% to assist buyers with closing costs. This enables a buyer to purchase with less , or in some cases no, cash outlay. Our in-house mortgage company, Home Capital Network also offers a buy down program which lets the buyer pay reduced interest rates for the first few years. Paid by the seller, these by-down options are especially useful for buyers who anticipate increased earnings in the near future, such as contractual wage increases for teachers, policemen and others. One problem that recurs is when sellers need to move and have only owned their home for 12-18 months.

The market began to flatten out in August 2005, so very little appreciation has accrued, in most cases not enough to cover sales expenses of realty commission, transfer tax (NJ mandatory seller expense), attorney fees, etc. Any seller in such a situation who has an FHA loan should know that this mortgage is assumable by the buyer. FHA rates have been very low (6%-/+ 2004, 5%-/+ 2005). With interest rates at 7%-/+ now, an assumable FHA loan can save interest costs each month, giving the buyer more spending power.

Our commitment to our clients drives us to rediscover new ways to bring buyers and sellers together.

No Resolution of the Federal Estate Tax

The US Senate tried but failed to set up final consideration of a bill which would permanently repeal the federal estate tax. Currently the tax is being phased out gradually to the year 2010. The repeal sunsets at that time and the tax reappears unless legislation is enacted. The proponents were 3 votes short of permanent repeal.

New Jersey Tax Update

NJ Legislature will move to formal consideration of property tax reform in 2006. Part of election promises, Senate President and Assembly speaker have created a plan that calls for four special committees to hold hearings with hopes that legislation could be enacted in the fall. Categories to be investigated include reduction of state and local school spending, public employee benefits, and state services.

Rumblings of a sales tax on professional services (ie: accountants, lawyers, Realtors®), and other service trades has been proposed, and summarily dismissed. However, write to your senators to voice against this possibility.

Notes From All Over

The proposed NJ “water tax” bill was shelved indefinitely from the pending state budget. Zoning regulations in question on waste-to-ethanol plant proposed on Route 9, Dover. For more info, go www.nuclearsolutions.com . Mortgage rates peaked at about 7% by fall of 2006. Warehouse construction, fueled by increased international trade, was up with rent up 5% thru the year. Proposed FHA reforms include 40 year Fed backed loans and elimination of the required 3% down payment.

Avoid the Remodeling Blues

In a year where home sales are declining and the “buyer’s market” is being determined by swelling inventories and price reductions, many home owners are happy to have the equity they need to expand and remodel their home to suit their growing families and changing lifestyles.

It is expected that an increase of 6% will be spent on home remodeling projects this year, keeping builders, handy men, landscapers and DIY super stores busy. Your remodeling contract should include: a written description of the job and materials, who will obtain permits, start and approximate completion date, time limit for fixing any defects and a payment schedule. A significant amount should be paid only when the job is completed to your satisfaction. Be cautious of the lowest bid. A low-price contractor may cut corners.

National Flood Insurance Changes

The Federal Government will no longer subsidize flood insurance for 2nd homes, commercial property or homes that have been flooded and rebuilt. Congress will insist on this change as part of a $20 billion bailout of the National Flood Insurance Program which was wiped out by Katrina. Other changes will include fines for mortgage lenders who don’t verify insurance coverage and compliance by state chartered banks. Flood zones WILL NOT be broadened to include more homes as was suggested.

News Affecting Every Home Owner!

Are your weekends taken up with mowing the lawn? Scientists have recently found the molecular path of a hormone that affects the growth of most plants. Researchers think that by manipulating the hormone, brassinolide, plant growth will be able to be controlled. This means we could see grass that would not grow higher than 3 inches, virtually removing the need for weekly mowing! Crop yields could be increased by taller growing feed crops and vegetables.

Internet is First Connection For Most Buyers

According to the 2005 New Jersey Profile of Home Buyers and Sellers, 72 percent of first time buyers used the internet in searching for a home, as well as 58% of repeat buyers. This could be explained that 1st time buyers are younger and more internet savvy.

Of all buyers in 2005, 84% purchased homes through a real estate agent. There is no doubt that the internet buoys home sales by making listing information available 24 hours a day and gives buyers anonymity while investigating the market.

Crossroads has long recognized the impact the internet could offer to real estate sales and has been at the forefront of realty web site development. The www.crossroadsrealtynj.com site hosts all listings available on the Monmouth/Ocean MLS with special sections on waterfront, active adult communities, featured homes and open house schedules. Our listings are also included on the web sites of our advertising venues, such as the Asbury Park Press, Luxury Home Magazine, The Real Estate Book and The Wall Street Journal.

Our relocation affiliate, Leading Real Estate Companies of the World has a site, www.leadingre.com.url tempting buyers looking to relocate with lifestyle changes across the country and around the world! Crossroads is one of just 10 Ocean County real estate companies with an enhanced presence on www.realtor.com, widely recognized as the first stop for buyers looking for homes. List with us and your home is assured of maximum on-line exposure.

Acres of Farmland in Local Municipalities

We don’t often think about the areas of farmland still viable in our “Garden State”. The New Jersey Right to Farm Act, adopted in 1983, and with amendments in 1998, established NJ as one of the strongest farmland protected states in the nation.

Right to Farm issues continue to be a major concern for farmers, their municipalities, their neighbors, and for the County agriculture development boards. Resolution of conflicts falls to the State Agricultural Development Committee, who is currently reviewing provisions to the statute.

Barnegat has 503 acres of farmland which represents 2% of the townships land in acres

Brick has 0 acres of farmland which represents 0% of the townships land in acres

Dover has 370 acres of farmland which represents 1% of the townships land in acres
Lacey has 6375 acres of farmland which represents 12% of the townships land in acres
Lakewood has 236 acres of farmland which represents 1% of the townships land in acres

Notes From All Over

Nationally, the backlog of unsold homes rose by 2.4% to a new record of 565,000 homes for sale at the end of April 2006. At the April sales pace, this represented a 5.8 month inventory. Unpaid traffic fines and unreturned library books can lower your credit score if they are turned over to a collection agency and reported to a credit bureau. Remodel or move? See www.remodelormove.com for resources and calculator for making the best decision.

“Plan Endorsement” Process Advancing

The NJ State Development and Redevelopment Plan is on its 3rd version, and has been on hold for the last few months. But the Plan Development committee has been reviewing municipal and county petitions for Plan Endorsement, primarily affecting zoning, by the State Planning Commission.

A county or community that receives endorsement of its planning documents is either consistent with the goals, objectives and policies of the SDRP or agrees to bring it’s planning and zoning into consistency within a designated period of time.

Ocean County has been endorsed. Lakewood, Lacey and Brick Townships are in the process of review. Endorsement qualifies communities and counties for increased benefits from state agencies, including streamlined permits and approvals.

Surprise Stats for New Home Purchases

The Commerce Department announced that new home sales in April 2006 increased by 4.9 percent to a seasonally adjusted rate of 1.198 million units. This was the highest rate since December 2005. Economists had been expecting a decline in sales, primarily due to increasing mortgage rates which are at the highest level in four years.

Interest rates on thirty year Freddie Mac mortgages climbed to 6.6% following the Fed’s May 2006 hike. This could be part of the typical spring boom.

Crossroads Activities

Crossroads is a family owned and operated Realty and provides employment for approximately 350 people. In 2006, we pulled together a softball game followed by a picnic at Winding River Park. Other Crossroads activities throughout the year include a company Christmas Party, Spring Bonus Breakfast, seasonal Hunger Relief Food Drives and Toys For Tots Christmas Collection.

Crossroads Participates in Training Seminars

On June 27th, 2006, Crossroads agents were invited to attend a seminar entitled “Get Motivated” held at the Continental Airlines Arena. Internationally known speakers lead workshops on various aspects of business which apply to real estate sales.

Speakers included:
Zig Ziglar - reknown motivational speaker
Rick Bellizzo – former president and COO of Microsoft
Suse Orman – financial analyst and investor
Peter Lowe – strategic decision making
Phil Town – investment
Toms Hopkins – sales and negotiating skills

Special video presentations by Colin Powell and Rudolph Giuliani will focus on leadership and courage.

By now you have seen the TV advertisements from the National Association of Realtors® about the Realtors® Code of Ethics. All Realtors® are required to take this training every 4 years to keep current with new issues that may effect Realtor® relations with their clients and customers. All Crossroads agents will completed this training by October 1st, 2006.

Other seminars currently available include technology training and tax information systems.

Regarding Banks in Real Estate…

For several years the National Association of Realtors® has been lobbying to oppose banks gaining access into the residential and commercial real estate industry. What maintains the status quo is the current trades rule prohibiting mixing banking and commerce.

In late March of 2006, J.P. Morgan Chase withdrew its application with the U.S. Comptroller of the Currency to retain royalty streams from oil and natural gas reserves, in part due to pressure by the NAR. Why would the NAR care about banks and fuel supplies? It behooves the NAR to focus a spotlight on any banking activity which breaches the commerce rule in order to keep banks from entering the real estate industry.

Representatives from the NAR won a spot to testify at hearings this spring by the Federal Deposit Insurance Corporation to weigh the application of Wal-Mart seeking to launch an industrial loan company. NAR opposes approval on the grounds that it would mix banking and commerce.