2015 Real Estate Market Set to Rock and Roll

The National Association of Realtors recently published an article regarding 10 reasons this years market is set to rock! Check it out!

Get Ready to Rock!


-Kyle Kovats

Freddie Mac Predicts 2015 Will be Biggest Year for Home Sales Since 2007

I've linked the article at the bottom of this post.

This does not come as a surprise because as unemployment has gone down along with interest rates, buyers will be out in troves this spring.

This is great news for homeowners. For potential buyers, give me a call before beginning your search. There is a good chance you'll be involved in bidding wars this spring and finding exclusive deals will help you avoid that.

Have a great holiday!

2015 Will be Huge

Inventory Turnover

A quick July market update for all.

The first two weeks of July have been slow weeks as many buyers seem to have packed their bags and headed on vacation. Homeowners, don't worry this is normal, do not get nervous and accept an offer you're not happy with. The buyers will be back in full swing in early August! 

To all of my agents out there, you can still prospect for buyers by following my "selling agent, not listing agent" webinar. If you haven't viewed it yet, contact me for access. 

As always if you have any questions, feel free to contact me. 

Kyle Kovats

201-403-1314 

KyleKovats@Gmail.com 

Outrageous

The one word I can use to describe the type of market that we are dealing with currently. Why is this market so outrageous? The number one explanation is interest rates.

With rates still hovering in the low 4's we are seeing a mass migration of buyers moving from their rentals out to the suburbs. In fact, many economists note that until interest rates hit roughly 6.5% it will be cheaper to buy than rent in New Jersey.

But the question remains, how long will rates stay near historically low levels? There's really no telling. Rates were predicted to be at about 4.5-5% this summer but we obviously have not seen that just yet.

If your a buyer, there truly has never been a better time to buy, take advantage of these rates while they're around. If you're a seller planning on "moving up", make the move now. The longer you wait the higher prices and interest rates will soar.

As always, if you have any questions give me a call (201-403-1314) or shoot me an e-mail (KyleKovats@Gmail.com).

Spring Market on Fire

Bidding wars are back, prices are up and inventory is wayyyyy down.

In Northern Jersey this years spring market is roughly 5.5% ahead of last years market for median sales prices.

The price appreciation is due in part to the lack of inventory combined with low interest rates which has buyers coming out swinging. When homes are marketed properly we've seen as many as 11 offers on a single property in less than a week!

Of my 6 listings in the past couple of months, my average sales to list price ratio is 104.7%. In other words my listings are on average selling for 4.7% above asking price.

If you're looking for an agent who will actively market your home and bring results, contact me for a free consultation.

Kyle Kovats
201-403-1314

Government Getting More Conservative on Lending Criteria

When a consumer takes out a mortgage loan from a bank they do so on the primary mortgage market. The primary mortgage market consists of anyone who directly loans money to consumers, for example a bank.

The primary lender packages up and sells these mortgages on the secondary market as mortgage backed securities to free up funds and be able to lend more money.

One of the largest players in the secondary market is the government and they set their criteria on what type of mortgages they will buy. Currently, consumers can qualify for mortgages with DTI (Debt to Income) ratios all the way up to 49% and the government will still buy them on the secondary market. However, the government has begun to hint that they want to take a more conservative position and bring their DTI limits to 43% 

So how does this effect both buyers and sellers? 

For buyers: You will now have less purchasing power as you will qualify for a smaller mortgage amount. For example, say you gross $10,000 a month. Currently you can have a monthly debt of $4,900 at that income level.  

Hypothetically, Let's say in that $4,900 monthly debt, $2,800 goes towards your mortgage, $1,500 goes towards your credit card expenses and the remaining $600 goes towards car loans. Now keeping your wage at $10,000 and lowering the DTI to 43% you can now only have monthly debt of $4,300. If your credit card and car loan expense stays the same, you've now gone from being able to afford a $2,800 monthly mortgage payment to a $2,200 monthly mortgage payment. 

For Sellers: Being that buyers will have less purchasing power, the market will not appreciate as much as it has for the past two years (7%-10% YTD). Simply, what this means is that if you're planning on waiting to sell for another few years to see your home appreciate, don't. Interest rates are only going up from here so it makes more sense to sell now when buyers can still afford more than usual due to lower interest rates. While you can take advantage of the low rates yourself on your next purchase. 

As always if you have any questions, give me a call 201-403-1314. 

-Kyle Kovats, New Jersey Realtor

Why is the First-Time Home Buyers Market Lacking Inventory?

With the jobs market still recovering we are seeing homeowners stay in their first homes for longer periods of time. This is due to stagnant wages and outsourcing becomes more and more prevalent. 

The biggest correlation to the housing market is the jobs market. When the jobs market is booming the housing market is on fire and many "upgrade buyers" enter the market. When the jobs market is uncertain, people hold onto their first homes rather than becoming "upgrade buyers". This leads to a low amount of inventory in the first-time homeowners market. 

So how do you find a home when there's nothing on the market? 

1) Call me. 

2) Tell me exactly what you're looking for, be as specific as possible. Once I know exactly what you're looking for I can almost always find you a home off the market that suits your needs. 

As always if you have any questions, feel free to give me a call 201-403-1314. 

-Kyle Kovats, New Jersey Realtor