by Francine Lichtman, Real Estate Sales Associate
We have a lot of good news out there right now.
Statistics tell us that 56% of New Jersey households can afford an entry level home. This is up from 44% just a year ago. The first-time homebuyers credit is definitely a factor here. The NJ Housing and Mortgage Financing Agency is offering a program that makes it easier for many residents to take advantage of this program. They will offer a “pre-fund” of $5,000 that will allow first-time homebuyers who make less than $120,000 to use the tax credit to cover closing costs, rather than having to wait to get the credit when they file their tax return next year.
Another piece of good news is that there is a measure before Congress to raise this credit to $15,000 and extend it to mid-2010. Right now, the deadline is December 31, 2009. In addition, there is a push for this to include ALL homebuyers and not just first-time. The importance of these incentives from the government cannot be underestimated.
Presently, there are 46 towns in New Jersey that have less than six months of inventory, which is the balance point below which home prices tend to stabilize or rise. The top performing 20 towns in New Jersey indicate that Maplewood is #16 with a 4.4 month supply of inventory. The only other Essex County towns are Glen Ridge with a 2.5 month supply, Cedar Grove with a 3.8 and Nutley at #15 with a 4.3 month. As a matter of interest, Chatham in Morris County ranks #10 with a 3.8 month supply of inventory.
Certainly, we will see continued economic challenges ahead, but one thing to remember is that the housing market leads the economy in and out of recession. There is a ray of light that is faintly visible to all who are watching closely. If the government programs continue and are even perhaps enhanced, we will begin the recovery in earnest before the year ends.
I often speak about the first-time homebuyer. My reasons for doing so are to remind everyone that all of the movement within our market begins with this group of consumers. When the first-time buyer makes a purchase, it allows that original first-time buyer to move up into their next home, and so on. This is what creates the demand for the homes that many of you own right now. It is a massive chain that needs to be in place for the housing market to be a healthy one.
