Factors that continue to impede a speedier recovery in the housing are consumer confidence, job-growth uncertainty, and tough lending standards that keep many otherwise qualified buyers from financing a home purchase. However, consumer confidence may be showing signs of improvement according to a report released by Fannie Mae on December 7, which revealed that consumer sentiment toward home prices is stabilizing and that, for the first time in six months, more people believe that prices will soon begin to rise. This is an encouraging development, as much of our economic vitality depends upon the overall confidence of the consumer, and could trigger even stronger home sales as more people feel confident that prices will go up.

As the new year begins, many consumers appear to be in a holding pattern, waiting to see how the economy reacts to the different demands both here and abroad. Yet with steadily increasing sales and record-breaking affordability, now is the time to take advantage of these opportunities to buy or sell a home.

Here in the New Jersey, many people are wondering about conditions in specific areas. Patrick Parker Realty is happy to go over with you end of 4th Quarter Numbers for any NJ area while also going over with you conditions from end of 4th Quarter 2011.
4 words… It’s Busy Out There!
Sources: Fiserv, Fannie Mae

Interest Rates
Mortgage rates continued to push historic lows in November, dropping another .08 points, to 3.99% for a 30-year fixed mortgage. “Rates on 30-year fixed mortgages have been at or below 4 percent for the last eight weeks and now are almost 0.9 percentage points below where they were at the beginning of the year, which means that today’s homebuyers are paying over $1,200 less per year on a $200,000 loan,” said Frank Nothaft, Vice President of Freddie Mac.

Home Sales
Sales among existing homes rose in November by a seasonally adjusted 4%, to 4.42 million units up from 4.25 million in October, and are 12.2 percent above last year at this time. Lawrence Yun, chief economist for NAR said, “Sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010 – a genuine sustained sales recovery appears to be developing.”

Home Prices
While median home prices in November rose to $164,200 from $162,500 in October, they are down 3.5% from a year ago. David Stiff, chief economist at Fiserv, stated, “Housing affordability has improved dramatically because of declines in both prices and mortgage interest rates. The monthly mortgage payment for a median-priced single-family home is now $700, compared to $1,140 in 2006—a decline of nearly 40%.” (Based on 2011 Q2 figures)

Inventory
With increased levels of sales, the inventory of homes on the market continued to decrease, falling by 5.8% in November to 2.58 million homes available for sale, or an equivalent of a seven month supply at the current sales pace. This positive sign of increasing sales and lower inventories are keeping the housing market on track for stabilizing home prices and a stronger housing sector.

Buyer/Seller Tips
If one of your New Year’s resolutions is to sell your home, here are a few things to keep in mind:

• Although the traditional home-buying season starts in the spring, here are some reasons why listing your home now, rather than waiting, could prove to be a smart decision.
• On average, the number of home sales in January drops almost by half from the previous year’s peak. A house that is priced right and staged well will stand out even more with less competition.
• Lenders, home inspectors, movers, and other vendors also see a seasonal dip in transactions. This could mean a quicker, easier, and possibly cheaper time to buy, sell, and move.

Even if you’re not ready quite yet, now is a great time to start the conversation. We can give you pointers on which repairs and preparations to tackle first, and which ones may not be necessary, saving you time and money. Starting now can help you capture the most buyers!

Patrick Parker Realty
info@patrickparkerrealty.com
www.patrickparkerrealty.com

The Rental Boom
While easily overstated, there has been something of a rental boom in 2011. Vacancy rates dropped sharply to 5.6% in the third quarter of 2011, the lowest level since 2006. Meanwhile, rents rose to a nationwide average of $1,004 in the third quarter, a rise of 2.4% year over year, and Reis Inc (the source of the above data) estimates that the total rise in rents for 2011 will be 3.6%. Developers (who tend to do plenty of market research before committing to construction projects) are acting on this information as well: rental unit construction starts are up 33.3% in the third quarter since the same period last year, to 48 million units according to the U.S. Census Bureau. A look at the November figures (the most recent monthly figures) show even more drastic differences: the rate of housing starts for apartment buildings with 5 or more units rose to 230,000, an increase of 25.7% since October, and 219.4% since November of 2010.

Home Sales & Prices
It’s estimated that 2011 will see a record low 302,000 new home sales, which is obviously bad news for developers and the construction industry. Single family housing starts are down 3.9% since this time last year, but building permits for single family homes are up by 4.6%, suggesting that we’ll see a bump in new home construction in 2012, and that developers are confident that 2012 new home sales will be substantially stronger.

In the third quarter of 2011, home prices were down in 111 out of the 150 markets that the National Association of Realtors monitors, which is disheartening for anyone looking to sell. For landlords and property managers however, the news is brighter: 81 of the 82 rental markets that Reis Inc monitors saw rising rents. At a certain point, this trend will drive up home prices, as renters start deciding it makes more fiscal sense to buy a home.

Shadow Inventory
We talked about it this time last year, and it’s still just as relevant and troubling this year. Shadow inventory is housing that is not yet listed on the market for sale, but that is likely to end up on the market through distressed means: either a short sale, a foreclosure auction, or a bank REO (bank-owned property). Estimates range from 1.6 million homes on the very low end up to 15.3 million homes, which would take between 1 year and 4 years to unload. Current rate of sale is 4.97 million homes/year, and there’s currently 3.5 million homes listed for sale (a 9 month supply – for reference, a normal market has a 6 month supply). Even if home sales improve dramatically (which few experts are holding their breath for), we’re looking at several years just to clear out all the shadow inventory, which suppresses prices because foreclosures, short sales, and bank REOs all sell for less than normal market prices.

Public Opinion
Real estate markets share several qualities with politics, and one of these shared qualities is that public opinion matters. Currently, 73% of the public believes that real estate sales will be either stagnant or lower in a year from now, and that public sentiment will have a very tangible effect on the markets as a self-fulfilling prophecy: fewer people will look to buy if they believe the housing market is still declining, which in turn will drive the decline further. And speaking of politics, 70% of the public believes that the housing sector will be a key issue in the 2012 election.

Predictions for 2012
The crystal ball is murkier than usual, between the unstable US markets and economy, the upcoming election cycle in 2012, and the continued uncertainty in the European Union (yes, it matters: a collapse in Europe would have a devastating impact on US economic markets which are intimately tied to the housing market). But enough equivocating, here are some firm predictions:

• Home prices will continue to decline through the end of the second quarter in 2012, and will then roughly stabilize for the following year.
• Rents will continue to rise. My official forecast: 2.5%.
• We’ll still be talking about shadow inventory this time next year, and we’ll still have 1-2 years’ shadow inventory looming over the market.
• Jobs & local markets: One of the other qualities real estate markets share with politics is that all housing markets are local. National trends are all well and good, but there are some markets that basically haven’t seen a recession at all (Washington D.C. comes to mind) and others that have been annihilated (Las Vegas comes to mind). As local job markets improve, local housing markets will improve, starting with the rental market and then spilling into the home sales market.
• Cash will remain king: Sure, interest rates are low, but guess what? Only buyers with plenty of cash are being qualified for loans! LTV (loan-to-value) ratios are down, which mean buyers need to put down more money at the table than they did 5-10 years ago. Stay liquid, and don’t over-leverage yourself – the rental industry in particular requires a hearty cash cushion, as rental income can be inconsistent, and repair expenses are unpredictable.

It’s a good time to be a landlord, but only if you’re not mortgaged to the hilt, and only if you have a comfortable cash cushion. With some foresight, some cash, and a little luck, 2012 will be a great year to buy and hold rental properties, as real estate prices remain low and rents continue to rise.

Patrick Parker Realty can help you list your rental property.  Or, if your a renter, you can contact us to find the perfect property for you.  Our community is ripe for rentals and we have the local know-how to get you, and find you, the perfect deal!

Contact us at 732.455.5252 or www.patrickparkerrealty.com.

In addition to improving employment conditions, home affordability also improved as interest rates fell further, opening the door for more first-time home buyers who accounted for 34% of the sales in October, an increase from 32% last month and over last year. The western United States saw the greatest increase in home sales, which were up 4.4% month to month and up over 15% from last year.

A strengthening job market, along with encouraging signs from the housing sector, including a 10% jump in pending sales for October, are strong economic forces. While mortgage lending still remains a challenge, these forces may send a signal to banks to relax lending regulations and allow for a more rapid recovery.

Interest Rates
Mortgage rates continue to push lower, dropping to 3.98% from 4.23% in October of 2010, offering historic affordability to today’s home buyers. While mortgage lending conditions continue to be a challenge, more and more people are seeing the advantage of buying a home sooner rather than later. Lawrence Yun, NAR chief economist, said, “Home sales have been plodding along at a sub-par level while interest rates are hovering at record lows and there is a pent-up demand from buyers who normally would have entered the market in recent years. We hope this indicates more buyers are taking advantage of the excellent affordability conditions.”

Interest rates are at record lows these days, and this 4th Quarter appears to be much busier then the first three, which I believe is a direct result of affordability conditions.

Home Sales
Existing homes sales improved 1.4% in October, or to an annual pace of 4.97 million, a 13.5% increase from October of last year. Even more dramatic, was the jump in pending home sales, which surged in October by 10.4% from September, and were up 9.2% from October 2010. This jump in pending sales could lead to a strong fourth quarter as signs continue to point to a pent-up demand brought on by current lending conditions of mortgage providers.

Home Prices
The national median home price in the U.S. saw a small decline in October to $162,500, from $165,800 in September. This number can be affected by the sale of distressed properties, which typically sell at discounted prices. Distressed properties accounted for 28% of homes sales in October. Yet despite a drop in the median price from last September, the Federal Housing Finance Authority reported that seasonally adjusted prices rose 0.2% in the third quarter from the second quarter in 2011, which could be an early sign of appreciating home prices.

Inventory
By the end of October, the total number of homes on the market had fallen 2.2% to 3.33 million homes, which represents 8 months of inventory at the current sales pace. Since a record high of 4.58 million homes in July 2008, the inventory of homes for sale has been steadily declining. When homes sell faster than they come on the market, the market comes from its current favor toward buyers into balance or in favor of sellers. This can trigger an appreciation in home prices and lead the way to a stronger recovery.

Deciding to Buy
When first-time home buyers decide they are ready to buy, it is important for them to begin the process by carefully assessing their values, wants, and needs—both for the short and long term. This is a critical step since consultation sessions normally start with the buyers’ values. Afterward, buyers can explore their wants and needs and, once defined, determine actual criteria.

A recent study shows how important the following home-buying factors were to buyers:

   •   List Price: 72%
   •   Location: 69%
   •   Neighborhood: 55%
   •   Floor Plan: 37%
   •   Square Footage: 28%
   •   Schools: 22%

By having the home-buying criteria in mind before walking into a consultation, buyers are off to a better start when meeting with their real estate agent. The consultation allows buyers to fill in any missing gaps within their values, wants, and needs. Typically, I find that most buyers which meet with me have a much clearer vision as to what they want.

Wishing you a Happy Holiday Season from the Patrick Parker Team!

Patrick Parker Realty
732.455.5252
pparker@patrickparkerrealty.com
www.patrickparkerrealty.com

1. Paint Choices — Use light shades of warm colors such as red, orange and browns. These colors can make a room look bigger and more welcoming. To give a room added depth, you might try an approach of using light colors on three walls of the room and a coordinated darker tone of the same color on the other wall to trick the eye into perceiving added depth.

2. Lighting — When your home is small, lighting becomes extremely important. The feeling of openness is aided by lighting, because of our lifelong conditioning to think of sunny spaces as being associated with the outdoors. Aim lighting on walls to make them be brighter. Consider having lighting controls installed that will allow you to dim or increase the intensity of the lights in each room to fit your needs.

3. Minimize the Furniture — Any rooms in the house that have too much furniture in them look smaller than they really are. The more things that are in the space, the less space there is for people to visualize being comfortable. Be sure not to crowd your furniture together when you want to make your room look larger. Avoid placing big armchairs and sofas in small spaces. To maximize the utilization of space, try to use furniture that can do more than one thing. For instance, an end table with an integral magazine rack takes up less space than two pieces.

4. Accessories — Curtains and other accessories you use in your decorating can have a big impact on how large or small it appears. Use light colored curtains to allow the entry of light during the day. Choose light colored furniture, or at least as a minimum use light colored covers for the furniture, since light colors will generally give a more open appearance to the space.

5. Get Rid of Clutter — Effective use of storage is important, especially in limited spaces. The more clutter in your home, the smaller and less appealing it will look. This is not just something for making your home nicer for others, but a good thing to remember in having a handle on your own lifestyle too. Select storage systems that fit your family’s needs. When you cut down on clutter, the property will be more appealing to guests and homebuyers — and you will be more comfortable there too.

6. Mirrors Can Add Size — Use wall mirrors strategically to give the illusion of depth to the room. There is hardly any improvement you can make that will be more cost-effective in adding apparent size to a room. Mirrors can be attractive art elements in and of themselves, and they serve a secondary purpose of making small rooms appear larger.

Use these real estate tips to improve your home without spending a fortune. In fact, these suggestions are among the most efficient ways to improve your home with just a modest outlay.

Patrick Parker Realty
732.455.5252
pparker@patrickparkerrealty.com
www.patrickparkerrealty.com

1. People looking are more serious buyers.
2. Serious buyers have fewer houses to choose, so you have less competition.
3. Houses “show better” with Holiday decor.
4. Buyers are more emotional.
5. Buyers have more time to look during the holiday.
6. Many people will buy by year-end for tax reasons.
7. January is the month for transfers. Transferees cannot wait until spring; you must be on the market!
8. New Jersey sold listings have proved to be up August – December.
9. You can sell now, but specify a delayed closing or extended occupancy until Early next year if you desire.
10. By selling now you have an opportunity to buy during the spring, when Many houses are on the market.

BOTTOM LINE:
By listing now, you may have fewer actual showings, but more qualified buyers.
THE REASON: You have less Competition.

Selling a house during the Holiday season is tricky, but not impossible. It’s the time of year when potential home buyers are focused on all things Thanksgiving, Christmas, Hanukkah and New Years, not buying a new home. The few house hunters that are in the market to buy a new home during the Holiday Season have the market in their favor, but you can tip the odds back in your favor and get the house sold during the season with these house selling tips.

Minimize Decorations
Home buyers want to see the home, inside and out, not an overload of decorations. Minimize the decor to make the house look as big as possible. Scale down to a small Christmas tree and a few neutral decorations. Remember that fragrance also plays a big part in making a house feels like a home, a seasonal fragrance, such as cinnamon or spruce, will entice buyers while still adding to the cheer for the family trying to sell the home.

Make the House Appealing From the Curb
The exterior front of the house is the first thing potential home buyers will see, and they will form an opinion on the spot. Giving a house curb appeal in the dead of winter during the Holiday season is not as easy as it is during warm weather, but it is doable.

Rake the fallen leaves, shovel the snow from the walkways and remove all unnecessary pieces of furniture from the front porch. Remove dead flowers from outdoor containers and replacethem with small evergreen shrubs and plants. Prune and shape overgrown shrubs located in the front of the house.

After the leaves have fallen from trees in the front yard, the house’s paint or siding is more visible from the curb. Make any exterior repairs and touch up exterior paint if needed.

Market the House and Price it to Sell
The Internet is the home seller’s friend. Market the house online by uploading a virtual video tour of the house and post pictures of the home taken during spring and summer so potential home buyers can see what the landscaping looks like during warm weather.  Patrick Parker Realty will manage all of your Online Marketing efforts as well as ensure all of your photos and videos present your property in the most positive light.

When the need arises to sell a house during the Holiday season, there is no time for price haggling. Research what comparable homes have sold for in the immediate area to discover the fair market value of the house.  Then discuss with your Agent possibly pricing your house for less.  It may move faster.  Patrick Parker Realty can help price your home right the first time so it spends the least amount of time on the market.

Whether attempting to sell the house on your own (FSBO) or using the services of a reputable real estate agent, employ these tips to get the house sold during the Holiday season – minimize Christmas decorations, add curb appeal, research neighborhood comparables, price the house to sell and use online venues to market the house.

We can help you sell your home during the holidays!

Contact Patrick Parker Realty at 732.455.5252 or by email at pparker@patrickparkerrealty.com.

We typically spend more than 80% of our nonworking or commuting hours inside our homes. Because we spend so much of our lives inside, it only makes sense we make a healthy inside zone the first priority.

Here are a few DIY tips from Green Your Home to get you started:

1. Cross-Ventilate. An average adult takes in more than 14,000 breaths—or about 3,000 gallons of air—a day! Surprisingly, you are more likely to breathe polluted air inside your home than outside—even in cities like ours here in Los Angeles, which aren’t known for air quality. Opening one window won’t cut it… you need cross-ventilation so the breeze actually blows though your home, taking the pollutions back out with it. Open a front door and a back door, or one window upstairs and one downstairs.

2. Lighten Up. Simply swapping out the five most commonly used incandescent bulbs for CFLs or LEDs in your home can save you $60 to $100 a year. Combined with well-designed artificial lighting, natural lighting is also a great way to boost efficiency.

3. Low Flow. American families use about 400 gallons of water a day, and 70% of that is used inside the home. The majority is used in the bathroom: the average person flushes the toilet 2,500 times a year. Transform your home’s toilet from water-waster to water-miser for cheap. Place a brick or 2-liter plastic bottle filled with water into your toilet’s tank. The volume of these objects means less water will be needed to fill your tank—you’ve just created your own low-flow toilet. Also, be sure and have a leaky or running toilet fixed by a plumbing professional immediately.

Contact Patrick Parker Realty for more tips on how to Green Your Home.

Patrick Parker Realty
732.455.5252
pparker@patrickparkerrealty.com
www.patrickparkerrealty.com

Sellers… Contact Us today for your FREE Competitive Market Analysis!

Moreover, this balancing act is even trickier now, given that we’re in a buyers’ market that is fraught with a variety of economic uncertainties. All the more reason why, when you make your decision to sell, you should do plenty of research as well as seek out the advice of a real estate professional who understands the intricacies of pricing your house to sell.

So What’s Your Home Really Worth?
Simply put, your home’s value is not determined by you, but by what the market is willing to pay for it at a given time.

These days, the market increasingly includes home buyers who have researched property values over the internet for months, have already viewed at least 10 homes, and are not under any pressure to buy. Indeed, they may be quite hesitant in hopes of missing out on one of those unbelievable deals that continue to pop up.

In trying to determine your home’s true market value and, as such, set your expectations for what you’re likely to sell it for, you should:

1. Try to be impartial. Unfortunately, the market is not interested in what you originally paid for your home, or how much you need to sell it for to buy your next home and meet your financial goals. In addition, your home may have features that you highly value, but which might actually reduce its market value by limiting the number of potential buyers.
2. Remember why you are selling. Do you want to sell or do you need to sell? While in a buyers’ market you’ll seldom get more money than is required to meet your financial needs. Unfortunately your personal situation may dictate that you take less money than the market would otherwise be willing to give you if you had more time.
3. Research online and in person. You can find out a lot about your local market through research at online, by talking to a real estate professional, or by going to open houses in your area and making comparisons with your home in terms of location, size, features and condition.
4. Get a Comparative Market Analysis (CMA). Drawn from your local Multiple Listings Service (MLS) database, a CMA presents pricing information, property details and photos of homes similar to yours (termed “comparables”) that recently sold, failed to sell, or are currently on the market in your area.

Patrick Parker Realty will always provide you with a CMA as part of the listing presentation we show you when you consider one of our Realtors to represent you in the sale of your home.

While there are many factors that can be barriers to buying a home, such as the tightening of mortgage lending rules by banks, consumer confidence in the job market is among one of the top obstacles to home ownership. In the 2011 Housing Pulse Survey conducted by the National Association of Realtors, 80% of respondents cited job security as their primary concern when deciding to buy.

Home Sales
For only the fourth time since the beginning of 2010, home sales in August were up both year-over-year and month-over-month, posting an 18.6% gain from last year, with first-time home buyers accounting for nearly a third of all homes purchased. These indications of strength in the housing market may help to add to consumer confidence, which is an integral part of sustained growth. Even though there is still a long road to recovery ahead of us, there are opportunities to be had for both home buyers and sellers.

August home sales were up 18.6% year-to-year, posting a 7.7% increase in sales activity over July despite Hurricane Irene, which struck the Eastern seaboard and New England regions at the end of the month. As a result of the hurricane, the Northeast experienced the smallest increase in sales. At the same time, persisting restrictions among banks affecting home lending are having the greatest constraint on sales levels. NAR Chief Economist Lawrence Yun stated, “The market can easily move into a healthy expansion if mortgage underwriting standards return to normalcy.”

Home Price
Homes prices were down, with a 5.1% drop in August compared to a year ago. The national median price for homes in August was $168,300, with distressed properties, foreclosures, and short sales still accounting for 31% of sales. The buyer’s market for residential property continues, as favorable prices, and record low interest rates offer the most affordable conditions for purchasing a home in the last 40 years.

Inventory
The supply of homes measured in months on the market at their current pace of sales fell 10.5% in the month of August, to an 8.5 month supply of inventory, down from a 9.5-month supply in July. With homes being more affordable than they have been in a generation and the lowest levels of new home construction since World War II, this inventory is projected to continue to fall, which will eventually result in the appreciation of home prices and a move toward a balanced market.

As a seller, it is important to understand the current real estate market, and a real estate agent is there to guide sellers every step of the way. Agents can help sellers understand what the level of distressed sales and competition look like in their area. This way, they will be able to price their home right and will more than likely be able to attract attention from potential home buyers.

Patrick Parker Realty
732-455-5252
pparker@patrickparkerrealty.com
www.patrickparkerrealty.com

I know you’re busy so I’ll keep this quick. I just signed up for an event that’s really important to me – the American Cancer Society Making Strides Against Breast Cancer walk – and I wanted to ask if you would…

Click here to create more pink with your green!

OK, that really was the quick (and to-the-point) version, but if you have another minute, I’ll tell you a little more about what that means.

• More pink means the next big breast cancer research breakthrough.
• More pink means free lodging for breast cancer patients when treatment is far from home.
• More pink means 2.5 million breast cancer survivors who celebrated another birthday last year.

And it’s all possible because of the generosity of people like you.  

Helping the American Cancer Society continue their work in the fight against breast cancer is really important to me. Last year, Making Strides raised $60 million to help people stay well and get well, to find cures, and fight back against breast cancer and it happened one $10, $25, and $50 donation at a time. I’ve signed up for this event because I really want to make a difference in the fight against breast cancer and your donation of any amount will help me do that.

I’ll let you get back to your day and I hope to send you an email soon thanking you for your generosity.

Learn more about how the American Cancer Society is creating more pink with your green!

Many thanks,
Patrick
Patrick Parker Realty
pparker@patrickparkerrealty.com
www.patrickparkerrealty.com