Steady as She Goes: July West Orange Home Sales Report

From politics to the weather, we have been enduring a summer of ups and downs. One thing we have been able to count on for a steady, smooth ride so far this summer is the consistent home sales in town. July ended with 36 residential homes being sold at an average sales price of $368,944, which is hovering very close around the May and June numbers. In May the average sales price was $363,733* and in June it was $369,824*.  See attached document to see the list of single-family and multi-family homes that sold last month. 

Out of the 36 residential homes that were sold, six were sold for asking price and six were sold over asking price. Year-over-year, however, comparing last July with July 2010, there is a drop in price and the number of homes sold. Five more homes sold July 2010 at an average sales price of $400,477.   

West Orange 2011 Real Estate Sales

Single-Family Homes  

MONTH

TOTAL SOLD

AVERAGE LIST PRICE

AVERAGE SALES PRICE

SP/LP%*

DOM

July

36

$380,787

$368,944

97.3%

94

1H2011**

(Jan-Jun)

171

$391,976

$373,592

95.5%

112

The multi-family sales (2-4 units) are tracking a little differently. Although there is a $59,617 drop in the average sales price from to July, there is a $47,933 improvement in price year-over-year. In July 2010, five properties sold but only with an average sales price of $178,700. 

West Orange 2011 Real Estate Sales

Multi-Family Homes (2-4 units) 

MONTH

TOTAL SOLD

AVERAGE LIST PRICE

AVERAGE SALES PRICE

SP/LP%

DOM

July

3

$262,967

$226,633

89.5%

199

1H2011 (Jan-Jun)

10

$269,180

$239,900

88.1%

176

*These numbers are slightly different from what was published in July because more sales were added to the GSMLS for May and June after July 6.  **SP/LP% = Property sold XX% of list price

OUTLOOK: Buying or Selling a West Orange Home for Over $650,000? Beware of the next 30 Days

If you are buying or selling a home in the mid-600s and higher, it’s important to pay special attention to the changes in the loan limits that are coming in the next few weeks. According to Ashley Murray, a premium mortgage consultant with HSBC Bank USA, N.A., the temporary higher conforming loan limits authorized by the American Recovery and Reinvestment Act of 2009, which allowed loan limits in Essex County to be raised to $729,750, will be lowered to $625,500.

This means to obtain a loan amount for over $625,500 the buyer would move into a jumbo loan category where the underwriting guidelines are different, the interest rates are higher and the maximum loan value is 80 percent; which requires the buyer to have at least a 20 percent downpayment.

This change most affects the well-qualified buyer who is looking to purchase a home for say $700,000 today using an FHA loan with 3.5 percent down, according to Fred Burt, a senior loan officer at Superior Mortgage Corp., a direct lender. Today this buyer would need a downpayment of just $24,500 and would get a mortgage for $675,500.  As of October 1, this same buyer would now need to get the loan amount down to $625,500, forcing the buyer to now put down a minimum of $74,500: these numbers do not include the monies needed for closing costs. If this buyer does not have the extra $50,000 on hand, then as of October 1, this same well-qualified buyer will now have to look at homes with a maximum sales price of $648,500 instead of $700,000.  

It’s important to keep your eye on this whether you are a buyer or a seller. Banks and lending institutions have cut off dates on when they will stop accepting applications for the current, higher loan limit so if you are a buyer you must check this with your bank and watch the calendar.  If you are a seller, you must have your Realtor verify the buyer’s ability to purchase if you do not plan to close by September 30.

“There aren’t any exceptions to this date so it’s important that you do not let your scheduled closing date slide into October or the buyer may no longer be able to afford to purchase your home,” continued Burt.  “To insure my clients are covered, I will not take an application that does not meet the new loan limits after September 9. It’s not worth the risk because after September 30 they will not be buying the home, unless they can come up with more money to put down to get their loan amount lower than the new loan limits.”

Homeowners with homes on the market for sale at $650,000 or higher also need to make note of this change because the buying pool – the number of buyers who can afford to purchase your home – will potentially decrease. 

Regardless of how we look at the market, buyers are still coming out to see and purchase homes in West Orange. For the past few years we’ve always had about 400+ homes on the market in the summer and this year isn’t any different. As of August 5, there were 423 single-family homes for sale in town and 92 under contract.

All of this data has been compiled using information from the Garden State Multiple Listing Service (GSMLS) as of August 5, 2011; if changes were made in GSMLS after August 5, 2011 it is not reflected here. The MLS is used by real estate agents selling properties in West Orange, New Jersey. This data does not include private sales or new construction not listed through a real estate agent.

Towne Realty Group, LLC. Independently Owned and Operated. Bev and Bob Meaux, Salespersons, Towne Realty Group.