Realtors: market on the upswing

VERNON — With the recent turmoil in both the housing market and banking industry, first-time home buyers may be a little gun shy. But real estate brokers and bank professionals are bullish about the market and adamant that there has never been a better time to get rid of the rental.

“The market has picked up. We are seeing a lot more first-time homebuyers and move-up buyers,” said Teri DeGroat of Weichert Realtors of Vernon.

“There’s a misnomer out there because a lot of people are thinking that you can’t get mortgages. The process is longer but it’s not harder to get a mortgage. It’s just a little more time consuming. And you need to bring a little more paperwork than you had to before,” said Kelly Mitchell, also of Weichert Realtors of Vernon. Mitchell also adds that the interest rates dropped to 3.99 percent within the last two weeks, making it relatively cheap to buy a home.

Weichert Gold Services Manager Tom Jagger says banks are not as lose as they were but “they are still lending to people, which is great.” He adds that there are not as many "no-doc" loans (loans that don't ask for documentation or proof of earnings) so buyers will need to show a W2 or paystub to get a loan.

Karen Glowacki of Prudential Gross and Jansen Highlands Realty says “not only is money very cheap but the homes are priced very reasonably, sellers are on board and they know now that if they get a buyer they have to hold on to that buyer.” She says the rental market is also pretty hot right now, with so many people losing their homes. “Investment buyers should be out in droves because they can pick up a house for a really great price, do a little cosmetic work and turn around and rent it,” said Glowacki.

“There is a lot of buying opportunity in the market right now especially if you are looking for a home in the $150,000 to $220,000 range,” said Renee Turner, assistant vice president at First Hope Mortgages, a fully owned subsidiary of First Hope Bank.

Getting the right loan
There are many FHA (Federal Housing Administration) government programs that are available to first-time home buyers. First Hope offers FHA programs as well as USDA loans geared toward rural financing which requires zero percent down payments. Another program called Smart Start can provide up to 100 percent financing and is offered by the New Jersey Housing and Finance Administration.

“There are property and income restrictions in certain cases. But all of Sussex County qualifies for USDA loans — it’s a great program,” said Turner.

Lucy Belniak of Exit 23 Realty in Hamburg says the USDA loans seem to be the most popular now. “Their criteria is a little bit more stringent,“ but she says people are being approved “as long as their credit is decent and they have the income to borrow.”

Another attractive option is the VA loan program for veterans. Teri DeGroat says she has been keeping busy with those as the veterans return home from the war and buy their first homes.

Finding the right home
Short sales have also made the market attractive for first-time homebuyers who don‘t have a home on the market themselves. Realtors agree that the homes may be in rough shape but there are some good buys out there for people who have the time to wait for a bank to approve the sale. Donna Smith of Exit 23 Realty in Hamburg says people can get into a great home for as low as $120,000. “A lot of them are going to be short sales at that price. You can do a 203K loan that allows you to borrow more for renovations.” She explains that there are requirements but it’s not impossible to qualify for the program, which is similar to an FHA loan with a small down payment.”

But short sales can be time consuming with banks taking as long as five to nine months to approve the transactions, so they are not for everyone. Mitchell says that some buyers just get tired of waiting and without a seller to be responsible for the repairs, it may just not be worth the time when you can get into a traditional home in as little as three months.

Realtors say there are plenty of opportunities to purchase quality homes in the $200,000 range. Glowacki says in places like Vernon and Wantage it is cheaper because people feel that the Route 23 corridor with its lights is less desirable than the Route 15 corridor.

Mitchell says the rental market and the condo markets have heated up since the downturn. “The pricing came down so much we are seeing a lot of investors come in and gobble up those condos.” Mitchell says the two markets go hand in hand and in places like Morris County in Jefferson and Oak Ridge, she says she has begun to see bidding wars.

Be mindful when refinancing
Everyone concurs that it is not wise to use one's home as a bank. It is not advisable to refinance a home mortgages and using that money for other expenses. And it seems, too, that house flippers — people who buy cheaply, sometimes do fix-ups and then re-sell, are not having much luck at this point in the market.

Donna Smith thinks home flipping is what caused the housing market’s collapse. She says “everyone built these McMansions with zero interest loans.” In the old days Smith says people would stay in their home and pay it off, then downsize and retire. She is a firm when she says, “your home is not an investment. Your home is your home.”

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