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 

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 

Why The Luxury Homes Market is Booming

Since June interest rates have risen roughly 1% causing renters who were on the fence about their buying timetable to speed up their searches. In the Essex County market we have seen a huge surge in buyers from areas such as Hoboken, New York City, and Jersey City. A lot of these young couples were renters who became active buyers.

The surge in buyers has caused record lows in inventory and made prices appreciate above normal appreciation rates. We've even seen bidding wars break out in the luxury home market which is usually not common due to the "jumbo" loan process.

However, is this boom sustainable? The answer is, it depends. If the fed continues to buy mortgage backed securities to keep interest rates low, we should continue to see buyers come out in the droves in all price ranges. Once interest rates hit roughly 6% and the cost of renting vs. buying become even, then we'll see the market slow down and appreciation scale back. Until then, we will continue to have a booming sellers market.

-Kyle Kovats, New Jersey Realtor

Why Do Some Agents Overprice Properties?

So, you're selling your home and you want to get top dollar. You interview 3 agents and decide to go with the agent that will list your home for the most money. Sounds smart. You're figuring if they're going to list it for the most money they'll surely sell it for the most money, right? Wrong.

Beware of agents who overprice listings, they intentionally do it for a couple of reasons that I will outline below.

1) They bought your listing- the term "buying a listing" refers to a strategy some agents use to get listings. Buying a listing means that they essentially told you that your home is worth alot more money than it actually is to excite you and get you to list with them. After you list with them, month after month after minimal showings they will tell you that your home is priced too high and that you must reduce the price. After six months go by and your home has still not sold, you're left with what we in the industry call a stale listing. You missed the initial excitement of the market during the first 6 weeks that your house was listed. Now, you find yourself in a bad spot where no matter what you do you're not going to get top dollar.

You're probably asking what's the point of agents doing that, they only get paid if they sell my home, so why list it unrealistically? The answer is #2.

2) They intentionally overprice your listing knowing that it won't sell at that price so that they can get buyers to work with from your listing. Here's how it works. An agent will overprice a home, host open houses and field calls on the property for the sole purpose of gaining buyers to work with to sell every home but your own. Your home is essentially a lead generator for them.

How do you combat this? Simply ask any agent that you are considering hiring the following two questions.

1) What is your sale price to list price ratio?
2) What percentage of your listings are actually sold?

-Kyle Kovats, New Jersey Realtor

Housing Inventory Near All-Time Low, Seller's Edition

Housing inventory is near an all-time low, but what does that mean for homeowners considering making a move?

Sellers find themselves in a great position in this market. With interest rates slowly rising and buyers flooding the markets looking to take advantage of the rates while they're still low, sellers are finding themselves choosing between offers rather than hoping to receive just one. As a seller you have a couple of options in this unique market in regard to pricing.

1) Price your home at market value: What we've seen in this market is that if you price your home at market value you will generate a ton of interest in your property and most likely wind up with a bidding war on your hands that very well can cause your home to sell above it's value. The only problem in this scenario is often times the buyer will have to come up with more money at closing because the bank appraisal will come in less than the sales price. It is important to have your realtor look over the details of the contract and put a contingency in the contract that the buyer will agree to pay the difference between sales price and appraisal at closing. This will deter any speed bumps in the closing process.

2) Try to stretch the market: in areas where there is very limited inventory for your specific home, you could potentially try to stretch the market and see what it will bear. However, I would recommend not overpricing too highly because in that case you'll have nobody even taking a look at your home. Again, you could potentially deal with appraising problems if you effectively stretch the market, so it's important to put necessary contingencies in the contract.

If it were my house what would I do? I'd price my home at fair market value and have as many potential bidders get involved as possible to entice a bidding war. Once a bidding war breaks out there's no telling where it can go, and you can REALLY stretch the market in this scenario. Keep in mind the most action on a home is in it's first 6 weeks on the market so pricing at fair market value will catch the publics eye and have the most people interested as possible.

-Kyle Kovats, New Jersey Realtor
NorthJerseySuburbs.com

Housing Inventory Near All-Time Low, Buyer's Edition

You've heard it on the news, you've read it online but how does low housing inventory effect the average consumer?

For buyers, this is one of the most competitive buying markets you'll ever come across. Homes for sale that are priced near market value are breaking out into crazy bidding wars where some houses have sold for up to 20% above asking price. Don't worry too much though because you have some options.

1) Make your offer stand out from the competition. Whether it means waiving various contingencies, putting down a larger down payment to give the seller confidence that your deal will hold firm and not fall apart at the closing table, or even just meeting with the seller face to face to explain why their home is so special to you (yes, some sellers take emotion into consideration). Find different ways to make your offer stand out from the rest in a multiple bid situation.

2) Hire a realtor who actively seeks out off-market properties. With the shortage of inventory I've been prospecting for a minimum of 3 hours per day for my buyers looking for off-market homes that might be open to offers. Basically, I have my buyers tell me exactly what section of town they are looking in and their housing preference and I will call every house in that area and even door-knock the houses that I feel are the best fits. In North Caldwell alone I was able to find 8 homes off of the market that were open to offers for my clients. What it comes down to is actually working and seeking out business rather than waiting for business to come to you.

By the way, I recently launched my website, check it out! NorthJerseySuburbs.com

-Kyle Kovats, New Jersey Realtor

VIP Buyer's List

With the inventory crunch we've seen over the past couple of years, Realtors must begin finding innovative ways to find their clients the right home. 

Many of my clients are faced with the problem of knowing where they want to move but not being able to find the right place. At this point in time with interest rates rising, time is of the essence and as a buyer you must seek out an agent who is going to expose you to more than just the homes that are on the market that everyone has access to. 

I recently had clients looking in North Caldwell who did not like anything that they came across on the market. It was at that time I began actively prospecting for them and I was able to find six (yes, six) homes off the market that were open to offers. They weren't just open to offers for the right price, these were people that were actually ready willing and able to move when a buyer was brought to them. 

If you're a buyer and you're having a tough time finding a place, give me a call. After we discuss your search parameters, I will be sure to find you a home that suits your needs. 

-Kyle Kovats, New Jersey Realtor 

E-Mail: KyleKovats@Gmail.com 

Cell: 201-403-1314 

Getting Homes Sold Before They Hit the Market

In the market that we find ourselves in right now where inventory is low and buyers demand is high, it's becoming increasingly tough to find buyers a quality home. To solve this problem, I don't wait for the quality homes to hit the market, I find them myself.

For three to four hours daily I call and door knock areas that my clients are interested in to find out what homes are off of the market that might be open to offers. This has been a huge part of my business lately and has really opened my buyers to more homes to choose from. Any agent can just look on the MLS and see the homes that are there, but if you want an agent who will find you a home that fits within your search parameters, seek out an active agent like myself.

If you have any questions about my services or any questions on the market in general, feel free to reach out to me, KyleKovats@gmail.com.

-Kyle Kovats, New Jersey Realtor

Consumer Confidence on the Rise

In a recent study released by Prudential Real Estate, the company found that 80% of all millennial's (ages 25-34) surveyed had a favorable view of the real estate market. This demographic is particularly important as they have been labeled as renters with home ownership not being a priority to them, a stark contrast to their baby boomer parents.

So, what does this mean for the average consumer? If millennial's come out in bunches to take advantage of the market conditions we're going to see housing prices rise at an even faster pace. Millennial's would fit into the first-time home buyer demographic and as we saw in one of my previous blogs, only about 25% of all buyers in this market are first-time home buyers.

In essence, whether or not the market can keep it's pace could come down to the millennial's, it's something worth keeping an eye on.

-Kyle Kovats, New Jersey Realtor

Should I Wait Until Next Spring to Sell my Home?



Now that the spring selling season is coming to an end, homeowners who have not been able to get their homes sold are asking themselves whether or not they should just wait until next spring to put their home on the market. There's really two ways to look at this.

In the spring you open your home up to more out of town buyers who have kids in school and are waiting until the summer to close so they can start their kids out fresh for the new school year.

On the flip side many people have a pre-conceived notion that the only time you'll sell your home is in the spring, and therefore that's a huge advantage to selling your home in the fall/winter. In the fall/winter, inventory is tighter than usual with less homes for sale. While interest rates slowly rise, buyers are still looking to take advantage of the mortgage market. With a steady influx of buyers and shrinking inventory in the fall/winter months it's a simple case of supply and demand that will cause your home to sell for top dollar.

If you have any questions, feel free to reach out to me, KyleKovats@Gmail.com


-Kyle Kovats, New Jersey Realtor

As Interest Rates Rise, so do Mortgage Applications



Over the past couple of months interest rates have been on a steady rise. During this time mortgage applications have also been on the rise as homeowners race to take advantage of historically low rates. So, what does this mean for the real estate market?

Inventory is staying just about the same but buyers are flooding the markets while interest rates are low. This is all leading to home prices rising and bidding wars breaking out on almost every home that is priced right. Even homeowners who bought at the peak of the market in 06-07 are selling their homes and taking losses because they realize that if they wait for their home's value to rise, their replacement home's value will rise as well essentially evening it all out. However, they actually save money rather than lose money when selling now because they can buy their replacement home with a low-interest mortgage.

In my opinion until mortgage interest rates hit 6% (the point where renting and buying are equally affordable), we will continue to see home prices rise.

As always, if you have any questions about my services or the real estate market in general, feel free to reach out to me. KyleKovats@gmail.com


-Kyle Kovats, New Jersey Realtor

Large Percentage of Move-Up Buyers

The Realty Times recently did a study that showed that roughly 75% of all buyers in today's market are "move-up" buyers. In other words these are buyers that are either moving into a bigger house or moving into a better district. I've noticed this myself as I specifically target move-up buyers with my marketing efforts.

For example, I market many of my listings directly to Clifton, Nutley, Belleville, and Bloomfield. Research indicates that a great deal of move-up buyers come to the West Essex area from those four towns. This has been a great source of business for me because any agent can just throw your home on the MLS and market it locally to the local agents. However, by directly contacting these homeowners myself, I have been able to increase my sellers pool of buyers immensely. This leads to more looks on the property, more offers, and the end result is having my listings sell for top dollar.

What is comes down to is going above and beyond for my clients, and that is something that I will always do.

-Kyle Kovats, New Jersey Realtor

How to Effectively Use a Property Website

Just because you're making a website for your listing doesn't guarantee that it will be exposed to the masses. So, how do you go about getting your home exposed to the most buyers possible? It really just comes down to hard work and endless promotion.

Any marketing piece that I send out with your properties information will include a link to this website. This website will include not only information about your home and it's features but also information about the area in general. The reason it is important to include information about the area is because you want to have your home exposed to the most people possible. I tend to market my properties directly to Hoboken and NYC because research shows that a great deal of these people move out to the suburbs. Being that some of these people are not familiar with the suburban towns that I list properties in, it is important for them to have all information on hand in order to make an educated decision.

To expose this website to the masses I directly contact people selling their units in Hoboken and NYC using mojo power dialer. Through this system, I will inquire where these individuals are considering moving then I will provide them with the personalized url to your home. Anyone that does not answer the phone will get a pre-recorded voicemail about your listing as well as your homes personal website.

As always if you have any questions feel free to reach out to me, KyleKovats@gmail.com

-Kyle Kovats, New Jersey Realtor

Why Sellers List Their Homes With Kyle Kovats

 

 

6 Reasons Why Seller’s List With Kyle Kovats

 

1)      Kyle pro-actively markets all of his listings. Kyle doesn’t just throw homes on the MLS while crossing his fingers and hoping for the best like most agents. On a daily basis Kyle contacts his buyers leads, other agents in the area who work with the most buyers, people currently selling their homes because they’re looking for somewhere else to move, and in general he targets the 5-mile radius around your property because stats show that 90% of all people that move, do so within a 5 mile radius of their home. Kyle seeks out buyers and doesn’t wait for them to come to him.

2)      Kyle’s technology is unmatched by anyone in the industry. To actively market your listing Kyle uses a system called, Mojo Power Dialer. This system allows Kyle to extract data from the MLS of people currently selling their homes and then uploads the data into his computer. Kyle then turns on the power dialer and dials three phone numbers at once, the first person to pick up is the person that he talks to. The two people that don’t answer get a pre-recorded voicemail about your listing. Again, Kyle doesn’t throw marketing pieces out there and hope that people see them, he actually contacts individuals directly and can track his numbers on how many people he’s marketed your home to. Kyle also syndicates your listing to over 300 of the top real estate websites, guaranteeing maximum exposure.

3)      Kyle expands his client’s pool of buyers immensely. Again, leveraging his technology he directly markets your listing to more than just the local markets. He directly markets listings to Hoboken, Jersey City, and New York City. Research indicates that a great percentage of individuals selling in those three areas typically move out to the suburbs. Let’s face it, anyone can market your home locally by throwing it on the MLS but having an agent expand your buyers pool gets more looks on the property, more offers, and the end result is top dollar for his clients.

4)      Kyle has an open door policy for all of his clients. As I’m sure we all know, realtors have a reputation for being lazy and working part-time. Kyle works full-time and gives all of his clients a copy of his schedule showing them the exact activities that he’s taking part in on a daily basis to get your home sold. Kyle believes it is very important to have an open door policy because it keeps him accountable and assures clients that Kyle is actively selling their home. At any time Kyle’s clients are free to walk into his office without notice.

5)      Kyle’s real estate credentials are unmatched by anyone in the industry. Kyle is the youngest licensed real estate instructor in US history and has been the editor of the #1 selling New Jersey real estate textbook, Principles and Practices of New Jersey Real Estate since he was 16. Kyle teaches real estate sales strategies to new licensees as well.

6)      Kyle has extensive experience in negotiating and has been trained by Scotwork North America, a company widely recognized as the number one negotiating training company in the world.

As always if you have any questions about my services or the real estate industry in general, feel free to reach out to me.

-Kyle Kovats, New Jersey Realtor