Right time to purchase a home, for some

Real estate brokers are often seen as eternal optimists, but those selling homes in the local area all agree that this is a great time to buy due to historically low interest rates.

Opinions differ on whether the bottom of the market has been hit, or if things will improve any time soon.

Carolyn Shen, an agent with Century 21 Action Plus Realty, Millstone, said there have been fewer sales overall than last year. Researching sales numbers for single-family homes in East Brunswick, Helmetta, Milltown, Monroe and South River, Shen found there were 198 homes sold last year from Jan. 1 to May 20, while only 156 sold in the same time period this year.

Adult communities in those towns had 98 sales during the same period in 2008, but only 83 in the same time period of 2009. For condominiums, there were 58 sold in that time frame in 2008 and just 37 in 2009.

"Right now, we are seeing a big demand for condos and small, well-priced singlefamily homes. There are a lot of first-time home buyers looking and competing for these homes," she said.

Shen said that those with good credit can definitely get a mortgage, but those who aren't "squeaky-clean" will pay more or won't be able to secure the financing.

Stuart Davis, of Davis Realtors, East Brunswick, said the financial world has changed a great deal from just a few years ago.

"It's back to basics," he said, with lenders wanting a lot of information from applicants. For those who have good credit and are employed, there are a lot of opportunities, he said.

Ofir Hillel, a partner in Orange Key Realty, with offices in South Brunswick and Freehold, said financing is not difficult to obtain if the buyer's credit is good, and the buyer has the right ratio of income to pay the loan.

Gloria Zastko, president of her own real estate agency in North Brunswick, said this market is different from anything she has seen in her 38 years in real estate. The federal first-time homebuyer incentive of $8,000 is very attractive, she said, but buyers should understand that they must purchase and close on a home by Nov. 30 for eligibility. She sees financing as going back to the way it was before the early years of this decade when subprime mortgages became available.

Zastko noted that she bought her own first home 50 years ago, and interest rates were not as low then as they are now.

The high rate of foreclosures and short sales are also affecting the market by bringing property values down, Shen said.

"The banks are not in the real estate business and are cutting their losses by selling these homes at rock-bottom prices," she said. "This affects the value of the homes in the area when the appraiser looks for comparable homes that have sold when doing an appraisal for someone buying a home."

Davis said the number of houses that will come onto the market due to foreclosure is "the great unknown." Banks are working with homeowners to help keep them in their houses, he said.

Shen believes the houses priced from $600,000 to $800,000 have been hit hardest, with listings she has in that price range getting the fewest showings.

Zastko said houses in a new South Brunswick development priced from $850,000 to $1 million have been selling, however. Overall, she said the key to the market is pricing.

"If it is priced right, it will sell. If it's too high, it will not sell," she said, adding that even some foreclosures and short sales are not selling because they are overpriced. "The best bet is a home treated with TLC [tender loving care] and priced right," Zastko said.

Hillel said that, across the board, houses that are priced correctly are selling, but anything overpriced is not. Overall, he sees the market picking up.

Zastko is not sure if the market has hit bottom, saying it is not going to correct itself, but will adjust.

"Affordability is the paramount part of the equation," she said. Home prices were artificially inflated by subprime mortgages, and people bought houses they couldn't afford, counting on the value of the house continuing to rise, she said.

However, Davis does think the market is near the bottom. He said real estate always runs in cycles, and since it has been declining for three years now, it may be close to bottoming out. He agreed that first-time buyers are driving this market, and finds townhouses and condominiums in demand if they are priced right. For anything priced over $800,000, "the air is thin," he said. Next year, he thinks there will be an uptick in the market.

In Davis' view, the long-term threat to real estate in New Jersey is high property taxes, and he said the state must come up with another way of raising revenue.

Hillel said it is his gut feeling that the market is near bottom.

"It's a great opportunity now for the long-term investor," he said.