Carmela Pereira
Real Estate Professional
Realty Executives Elite Homes
????OPEN HOUSE SUNDAY 8/29 12-3 PM????
4BR/3BAs Updated Bi-Level Home
30 Gerard Rd, Nutley
$557,250
Pristine be-level home with many updates - newer kitchen with stainless steel appliances, updated baths, and hardwood floors on the lower level. Sliders on lower level to outdoor patio. Spacious yard that is perfect for entertaining. Close to major highways, shopping and restaurants.
For more details:
https://www.rockawaynjhomesforsale.com/listing/mlsid/87/propertyid/3737352/
Carmela Pereira
Realty Executives Elite Homes
[M} (973) 580-1991
[O] (973) 846-0065
One of the hottest topics of conversation in today’s real estate market in Rockaway is the shortage of available homes. Simply put, there are many more potential buyers than there are homes for sale. As a seller in Rockaway, you’ve likely heard that low supply is good news for you. It means your house will get more attention, and likely, more offers. But as life begins to return to normal, you may be wondering if that’s something that will change.
While it may be tempting to blame the pandemic for the current inventory shortage, the pandemic can’t take all the credit. While it did make some sellers hold off on listing their houses over the past year, the truth is the low supply of homes was years in the making. Let’s take a look at the root cause and what the future holds to uncover why now is still a great time to sell.
It’s not just today’s high buyer demand. Our low supply goes hand-in-hand with the number of new homes built over the past decades. According to Sam Khater, VP and Chief Economist at Freddie Mac:
“The main driver of the housing shortfall has been the long-term decline in the construction of single-family homes.”
Data in a recent report from the National Association of Realtors (NAR) tells the same story. New home construction has been lagging behind the norm for quite some time. Historically, builders completed an average of 1.5 million new housing units per year. However, since the housing bubble in 2008, the level of new home construction has fallen off (see graph below):
The same NAR report elaborates on the impact of this below-average pace of construction:
“. . . the underbuilding gap in the U.S. totaled more than 5.5 million housing units in the last 20 years.”
“Looking ahead, in order to fill an underbuilding gap of approximately 5.5 million housing units during the next 10 years, while accounting for historical growth, new construction would need to accelerate to a pace that is well above the current trend, to more than 2 million housing units per year. . . .”
That means if we build even more new houses than the norm every year, it’ll still take a decade to close the underbuilding gap contributing to today’s supply-and-demand mix. Does that mean today’s ultimate sellers’ market is here to stay?
We’re already starting to see an increase in new home construction, which is great news. But newly built homes can’t bridge the supply gap we’re facing right now on their own. In the State of the Nation’s Housing 2021 Report, the Joint Center for Housing Studies of Harvard University (JCHS) says:
“…Although part of the answer to the nation’s housing shortage, new construction can only do so much to ease short-term supply constraints. To meet today’s strong demand, more existing single-family homes must come on the market.”
When we look at existing homes, the latest reports signal that housing supply is growing gradually month-over-month. This uptick in existing homes for sale shows things are beginning to shift. Based on recent data, Odeta Kushi, Deputy Chief Economist at First American, has this to say:
“It looks like existing inventory is starting to inch up, which is good news for a housing market parched for more supply.”
Lawrence Yun, Chief Economist at NAR, echoes that sentiment:
“As the inventory is beginning to pick up ever so modestly, we are still facing a housing shortage, but we may have turned a corner.”
So, what does all of this mean for you in Rockaway? Just because life is starting to return to normal, it doesn’t mean you missed out on the best time to sell. It’s not too late to take advantage of today’s sellers’ market and use rising equity and low interest rates to make your next move.
It’s still a great time to sell. Even though housing supply is starting to trend up, it’s still hovering near historic lows. Talk to a trusted real estate professional about how you can list your house now and use the inventory shortage to get the best possible terms for you.
In today’s real estate market, low inventory and high demand are driving up home prices. As many as 54% of homes are getting offers over the listing price, based on the latest Realtors Confidence Index from the National Association of Realtors (NAR). Shawn Telford, Chief Appraiser at CoreLogic, elaborates:
While this is great news for today’s sellers in Rockaway NJ, it can be tricky to navigate if the price of your contract doesn’t match up with the appraisal for the house. It’s called an appraisal gap, and it’s happening more in today’s market than the norm.
According to recent data from CoreLogic, 19% of homes had their appraised value come in below the contract price in April of this year. That’s more than double the percentage in each of the two previous Aprils.
The chart below uses the latest insights from NAR’s Realtors Confidence Index to showcase how often an issue with an appraisal slowed or stalled the momentum of a house sale in May of this year compared to May of last year.
If an appraisal comes in below the contract price, the buyer’s lender won’t loan them more than the house’s appraised value. That means there’s going to be a gap between the amount of loan the buyer can secure and the contract price on the house.
In this situation, both the buyer and seller have a vested interest in making sure the sale moves forward with little to no delay. The seller will want to make sure the deal closes, and the buyer won’t want to risk losing the home. That’s why it’s common for sellers to ask the buyer to make up the difference themselves in today’s competitive market.
Bottom Line
Whether you’re buying or selling in Rockaway, your real estate agent is your ally. They’re with you throughout the process and are there to help you navigate the unexpected, including potential appraisal gaps.
If you’ve given even a casual thought to selling your house in Rockaway the near future, this is the time to really think seriously about making a move. Here’s why this season is the ultimate sellers’ market in Rockaway, and the optimal time to make sure your house is available for buyers who are looking for homes to purchase.
The latest Existing Home Sales Report from The National Association of Realtors (NAR) shows the inventory of houses for sale is still astonishingly low, sitting at just a 2-month supply at the current sales pace.
Historically, a 6-month supply is necessary for a ‘normal’ or ‘neutral’ market in which there are enough homes available for active buyers (See graph below):
When the supply of houses for sale is as low as it is right now, it’s much harder for buyers to find homes to purchase. As a result, competition among purchasers rises and more bidding wars take place, making it essential for buyers to submit very attractive offers.
As this happens, home prices rise and sellers are in the best position to negotiate deals that meet their ideal terms. If you put your house on the market while so few homes are available to buy, it will likely get a lot of attention from hopeful buyers.
Today, there are many buyers who are ready and able to purchase a home in Rockaway. Low mortgage rates and a year filled with unique changes have prompted buyers to think differently about where they live – and they’re taking action. The supply of homes for sale is not keeping up with this high demand, making now the optimal time to sell your house.
Bottom Line
Home prices are appreciating in today’s sellers’ market in Rockaway. Making your home available over the coming weeks will give you the most exposure to buyers who will actively compete against each other to purchase it.
With real estate prices in Rockaway New Jersey on the rise, and multiple-offers the norm in many markets, are sellers crazy not to sell now? Yes. And No.
• If this is the right time to cash in your real estate investment, accurately crunching the numbers with your real estate professional will confirm that selling is the right thing.
• If this is not the right time to let go of your home in Rockaway to achieve another goal, it doesn’t mean that later may not be ideal. Real estate professionals are geared up to sell real estate now, so deciding on the actual timing of your sale is up to you. Deciding when to sell should be based on your personal criteria, not the professional’s. Compare what would make selling now right for you with reasons offered by real estate professionals as proof that this is the right time. Is there a fit or not?
Even when broad trends sweep through the real estate industry and across the country, it’s still all about what you—as an individual or as part of a couple or a family—can and want to do with your specific property or real estate dream.
The fact is you won’t know in advance whether either selling now or not selling now is positively the best move. “Experts” may say they know or sound like they know, but they understand less than you do about what’s right for you.
At some point after the sale, you may look back on what happened and decide that was either the right thing to do or the wrong thing. Hindsight is 20:20 in real estate, but by then it’s too late.
Not acting because of indecision or fear is not the answer either.
Over the years, I have met hundreds of people who each told their “if only I’d…” real estate story about what they could have bought or sold, but hesitated. None of them could forget about what they had lost or could have gained, real or imagined.
So how do you decide when to act and when to wait?
That’s the challenge—and that is also a very individual thing.
We’ve all got our own decision-making and investing style, whether we are conscious of these approaches or not. All we can do is keep improving both, so that we make confident, knowledgeable decisions about when to invest and when to take profit.
Three Key Contexts for Deciding If Now Is The Right Time to Sell:
#1. Ignore what’s hyped in the media and focus on facts about the real estate market in your neighborhood in Rockaway.
Select a local real estate professional like Carmela Pereira who have experience with multiple-offer markets if that’s what’s happening in your area.
Ask a lot of questions. Listen carefully to answers and ask “Why?” a lot. Take notes so you can discuss options.
Don’t just go with the highest bidder. If they are wrong, you’re the one who will suffer. Merely listing under market value to attract multiple offers does not guarantee the seller nets more than they would by listing at market value. Solid marketing strategies and professional substance are what make the difference in real estate.
Nor are you out to make new friends. Stay skeptical. Your sale may just be another deal for the professionals involved, but your real estate represents great value in your life. Perhaps it’s the driver of your entire financial future.
Invest just as much time and effort in deciding what you’ll do with the cash after you sell. Will you rent? Where will you live next if you decide to buy another home? Are market conditions there going to limit your choices?
• Cashing Out: Low interest rates make putting cash in the bank a financially unattractive prospect, so what’s your plan to grow that capital or at least protect it? Do you have a financial advisor you can really trust or is this DIY investing? The home equity or value that took decades to accumulate can disappear very quickly if you are not experienced at managing lump sums or you trust the wrong financial advisor.
• Buying In: If you are going to switch from seller to buyer in a similar hot sellers market, you may discover that much or all of what you gain by selling can disappear into your next real estate purchase. If that proves true, but you have improved your location and/or made a great lifestyle choice, that financial equilibrium may be acceptable. However, if you end up with less than you had and you’re not happy about that, this may have been an expensive real estate lesson.
It’s your choice. What would be easier to live with? Regret that you could have taken profit out now, but did not, or regret that you gave up your home, but did not improve your financial well-being?
That’s where many real estate owners—sellers—are today. They ask themselves, “Will I look back on this time and say I was crazy to sell or that I was crazy not to sell?”
The smart ones don’t just wonder or end up whining “if only.” They commit to exploring their options and getting the facts to discover exactly where their best future might lie.
