October 2013: How's the Real Estate Market Doing?

The real estate market in NJ has experienced rising home values since early 2012. Why? Interest rates reaching all-time lows lead to a huge surge in buyers and has fueled the housing market for the past 22 months. Bidding wars have become commonplace and multiple offers on properties, the norm. In fact, one of the only problems that I’ve run into is that houses are selling for too much money in these bidding wars and buyers have to put down a larger down payment to meet lending criteria due to appraisal values coming in below sales prices.

But what happens when interests rates rise, will the housing market slump? Over the summer from June to August we saw interest rates rise nearly 1% and all this did was bring more buyers to the market than we previously had. The reason for this is buyers did not want to miss out on locking in an interest rates in the 3-4.5% range (30-year rate today is 4.28%). I personally saw a ton of buyers coming out from their rentals in the Hoboken and NYC areas to find homes in the suburbs.

Economists have stated that buying in New Jersey will be cheaper than renting until interest rates hit roughly 6%. The bottom line is we may not experience the 7-10% appreciation in home values per year that we’ve seen over the last 22 months but the housing market should continue to appreciate for the foreseeable future. 

If you'd like to check out some of the current inventory we have in North Jersey, check out my website, NorthJerseySuburbs.com. If you have any questions at all please feel free to e-mail me, KyleKovats@Gmail.com 

-Kyle Kovats, New Jersey Realtor