New national numbers were released by the National Association of Realtors® yesterday.  Overall, sales (sales closed in May) were up, but not as much as had been expected.  Lawrence Yun, NAR's chief economist noted that many sales written in earlier months failed to close because of poor appraisals.  Lending institutions often have been sending in appraisers who were unfamiliar with areas, even entire towns, and properties failed to appraise and consequently failed to close. 

This has always been a problem, especially when appraisers ignore information having do to with distressed properties.  A property sold in foreclosure is not a valid comparative sale, since it is not between a "willing buyer and willing seller."  Using such properties drives all values down.  As values decline, the potential is for additional properties to fall into foreclosure - a downward spiral, not unlike Detroit over the past ten years.

In the Northeast region sales were up 3.9% over April, but still down 10.1% over a year ago, and prices were down 12.5% over a year ago.  Somerset County New Jersey sales were off 17% over a year ago, but up 12.6% over April.  Remember, all real estate markets are local, so make your real estate buying and selling decisions based on local, not the mythical national numbers.

March is generally not only the month of NCAA basketball, but of increasing real estate activity as well.  This year has been no different.  There is ample evidence that conditions are very good for home buyers and sellers.

Fact #1:  Interest rates nationally are at the LOWEST LEVEL EVER.  Thirty-year fixed-rate mortgages with no points at 4.85% are outstanding.

Fact #2: Mortgage money is available to qualified buyers with good credit scores.

Fact #3: Tax credits of up to $8000 are available for people who have not owned a home for the last three years.

Fact #4: Down payments as little as 3.5% (FHA) are possible.

Fact #5: Inventories of unsold homes in Somerset County, NJ, while not at the historic highest, are still substantial, affording buyers a good selection.

Fact #6: It is unlikely that home prices in Somerset County will decline further in the foreseeable future.

So, what should people be doing about all this?  First of all, prospective buyers should get pre-approved for a mortgage.  Contact a lending institution - if you don't have one in mind, contact me so that I can recommend one.  It may take longer these days to get a true pre-approval (7-10 days), but not only does getting a pre-approval make you a stronger buyer in the eyes of a seller, doing so also flags any blemishes on your qualifications that can be removed before you get too deeply into the purchase process.

Secondly, after obtaining a pre-approval subject to selection of a home and a purchase contract, familiarize yourself with the areas you want to concentrate your search in.  The Internet is useful for the early stages.

Finally, once you have narrowed down the areas you want to live in, contact a Realtor® to help you find the property you want.  You need someone who not only has extensive experience and skill, but someone who knows the market.  Does someone come to mind?  

OK, so the "light at the end of tunnel" was another train.  Like most of America, I am now peeling myself off the tunnel walls to which I was plastered by the on-rushing fast freight of The Financial Crisis (worthy of capital letters, don't you think?).  There is cautious, very cautious, optimism out there.  But before we get too involved in what might be, let's look at what the market in Somerset County did in September.

In a nutshell, September 2008 was not much unlike September 2007, with listings taken (547 vs. 608), and two more sales made (239 vs. 237).  The number of properties available for sale on October 1, was 2402 this year, 2453 in 2007.  There was a 4% drop in average sale prices this September over last, and for the year Somerset County average sale price is $469,730 vs. $498,302, or nearly 6% lower than last year.

The supply/demand ratio was lower in September than in August by just a bit, but the absorption rate climbed to 10.1 months from 9.4 months in August.  However, it was lower than September of 2007, when it was 10.4 months.

The general financial horrors of September probably are not reflected in the sales made numbers.  Consumer confidence is reputed to be crucial to the improvement of the American economy.  The financial rescue plan signed on October 3 should generate an increase in that confidence level, but it will take several months for substantive improvement to work its way through the system.  In the meantime, if you are thinking about buying or selling real estate in Somerset County, New Jersey, be in touch with a Realtor® who is in touch with the market.