We’ve all heard the saying that our home is our castle; but with all the ups and downs of the housing market over the past few years, what we may be asking is whether our castle is a sound investment. The answer is a resounding “yes.” The truth is that real estate has always been a sound, long-term investment. And now with more affordable prices and historically low interest rates, it is definitely a great time to buy.
At a recent seminar for Realtors given by Jeffrey G. Otteau, President of the Otteau Valuation Group and widely recognized expert on real estate trends, Mr. Otteau reported that sales in New Jersey are up 24% overall year-to-date, and are gaining strength. The country’s modest economic recovery has helped increase consumer confidence, and the low inventory of available homes has created pent-up demand As a result, the sales forecast for the months to come is mostly positive.
One slightly darker spot on the horizon is the luxury market, which Otteau defines as homes over $2.5 million in value. He believes that market is static right now due to the uncertainty of the looming “fiscal cliff” at the end of 2012. Unsold inventory in that price range is currently at a 27-month supply, versus the 7.8 -month supply in the $400,000 to $599,999 range – a supply that is considered to be a normal, balanced market indicative of price stability.
“We are probably passed the bottom of the market now,” Mr. Otteau states. “Prices have been rising slightly in the U.S. over the past six months and they will soon start to rise in New Jersey at many price levels, but overpricing a house is still a very expensive mistake for homeowners.” The Otteau Valuation Group has done extensive studies which show that the longer a house is on the market, the fewer showings it will get, and the fewer interested buyers there will be. And if an offer is received it will most likely be greatly discounted.
Mr. Otteau’s forecast is that homes sales will weaken in the last months of this year; but in 2013, the economic and housing recovery will continue, leading to an accelerating pace of recovery in 2014 as borrowing becomes easier and Generation Y buyers begin to find their way into the housing market.
It is a lot to digest, and that’s where Lois Schneider Realtor comes in. The fact is, all indicators point to improvements in the housing market, and our experienced sales associates are here to assist you in navigating the process. Let the experts at Lois Schneider Realtor bring you home to your new castle.