In the real estate business, there is a budding sense of optimism these days.
A warmer winter, a stronger sense of job security and a general feeling that home prices have stopped dropping are fueling a new outlook.
"This is extraordinary," said Jeffrey Otteau, president of the Otteau Valuation Group in East Brunswick. The market is "exploding off the charts, and I’m convinced this is just the early stages of what is yet to come.
"And, I’m not an optimistic person by nature,’’ he added. "I’ve seen so many negatives."
Springtime is traditionally a busy buying and selling season for homeowners: the weather is nice, and buying now gives new homeowners time to settle in before school starts in the fall. But this year, activity started earlier and there are already stories of double-digit visits at open houses, bidding wars and homes sold within days.
The reasons are numerous, according to real estate agents. Potential buyers are tired of waiting on the sidelines, worrying that prices could drop further. Interest rates are still at historic lows, but are starting to creep upward, which in turn gives buyers a sense of urgency to make a move. And sellers, long reluctant to accept the reality that their homes’ values have declined, are increasingly willing to list them at realistic prices.
"We’re seeing the kinds of activities that lead us to believe we’re going to have some improvements in the market over what we’ve seen in previous springs, (and) over the last several years," said Charlie Young, CEO of Parsippany-based ERA Real Estate. "What it tells us is people are feeling like it might be time to stick their head out from the rabbit hole and look around."
Indeed, consumer confidence edged up 1.2 percent in March from February and is up 12.9 percent from last March, according to a report Friday by Thomson Reuters and the University of Michigan. More households reported an improved financial situation than any time in the past four years, the report said. New Jersey’s unemployment rate is holding steady at 9 percent, but employers increased payrolls for the sixth consecutive month in February, according to state Department of Labor and Workforce Development.
There is more evidence that the market may be emerging from its long-running rut.
Home purchase contracts in the state were up 28 percent this February from last year and unsold inventory is at its lowest point in four years, according to figures from Otteau. Interest rates for a 30-year, fixed-rate mortgage rose to 4.23 percent two weeks ago, up from 4.05 percent in February, according to the Mortgage Bankers Association.
Those were reasons enough for Eric and Janice Ditkowsky to decide to put their four-bedroom, two-and-a-half-bath home in Bridgewater on the market. They had been considering downsizing after their son Matt went to college, but the timing never felt right. Now, Matt has graduated and is planning to move to Hoboken, and the family is looking for a townhouse to share with their teenage daughter, Elissa. But as they weighed whether to sell in the summer or fall, they realized they should first do some home improvement projects.
Nine months and $50,000 later, the Ditkowskys have a new granite countertop in the kitchen, an open floor plan to the living room, a new air conditioning system and a fresh coat of paint throughout the house. They made upgrades with a future buyer in mind, and chose fixtures they hoped would increase the home’s value to the mid-$500,000’s.
"Major improvements to get the house ready for springtime, in my view and (from) the research I’ve done, is critical to get the house sold in this market," Eric Ditkowsky said.
"Emotionally, we love the house and we want the most we can out of it, but we also realize the market demand and we know what the competitors have," he added. "We are going to come out with a price that is good for everybody."
That acceptance of pricing is more abundant now, real estate agents said.
In mid-March, Jodi Luminiello, with Coldwell Banker, handled a bidding war on a three-bedroom split-style house in Cranford. She had listed it and hosted an open house on Sunday, and by Monday multiple prospective buyers had sent in their offers. It was priced correctly, she said.
"We’re getting double-digits when running open houses, so I think it’s overall very active out there," Luminiello said. "Sellers are finally coming to terms with the true value and being realistic about their prices, so that’s helping everything get active again."
Activity in New Jersey is slightly above what is happening nationwide, said Young, of ERA. And from what his agents tell him, the momentum is happening throughout the state, not just in select towns that were somewhat immune to the recession because of their location or housing stock.
That’s what Gary Large, president of the New Jersey Association of Realtors, is seeing too.
"In most cases, we’re starting to see a stabilization of prices," said Large, who is branch manager of Prudential New Jersey Properties in Morristown. "We’re getting very close to the point we’ll be able to say prices have stabilized and the correction is over."
But Greg Gwizdz, an executive vice president with Wells Fargo Home Mortgage, said the perfect storm of low interest rates, home prices and inventory won’t stay like this forever.
"At some point, rates will go up and some home prices will go up, and everybody’s going to be surprised," Gwizdz said. "Hopefully, that’s what potential homebuyers are thinking about."
"This is a window of opportunity," he said. "And windows do close."
source star ledger
