Archive for the 'Living in South Orange' Category

Many first-time home buyers are intent on getting the best deal possible – not a bad strategy at all.  But many buyers forget that “the best deal” depends both on house price and mortgage rate (unless you’re one of the lucky few who intend to pay all cash).  Remember this handy little equation: For every increase of 1 percentage point in mortgage rate you can afford 9% less in home price.  Let’s do the math:  Say you’re shopping for a $500,000 house in South Orange, NJ today but you feel that if you wait another 6 months the price might drop and you’ll be able to get this same house for $475,000.  But what if in this same time period rates go from 4.75% to 5.75%?  Now you can only afford a $455,000 house so that $500,000 house that you thought would drop to $475,000 is now beyond your budget.  Bummer!  Although my crystal ball is in the shop at the moment, I would bet that interest rates will go up before home prices come down a whole lot.

The Washington Post reports that rates for a 30-year, 20%-down fixed-rate mortgage are the lowest they have ever been since Freddie Mac started following rate changes in 1971. As of last Friday, 6/25, the average rate is  4.69%, down from 4.75% the week before and more than 5% a year ago. Rates for a 15-year, fixed-rate mortgage have gone even lower, as low as 3.875% (compared to 4.89% last year).

The Post explains that mortgage rates are dropping

because investors, nervous about global economic stability and a volatile stock market, are plowing their money into mortgage securities backed by Fannie Mae and Freddie Mac, assets that investors perceive to be relatively safe bets.

But despite the great terms, consumers are becoming less and less interested in buying houses and applying for mortgages. The end of the tax credit in April combined with shaky employment and stagnating wages have led to a steep drop in home sales, and a corresponding decrease in mortgage applications. While some people are still in the market to buy a home, the numbers are reduced and the lower mortgage rates are not working to attract those on the fence. Michael Fratantoni, a vice president at the Mortgage Bankers Association, says that consumers at this point are used to fairly low mortgage rates, and do not therefore see the 4.69% rate as a reason to commit to a mortgage if they are not otherwise prepared to.

However, for those who already have mortgages, now is an excellent time to refinance, and indeed, refinancers make up a whopping two-thirds of all mortgage activity. For those who can, refinancing is a great option, but not everyone who wants to will be able to, given that house prices have dropped and their own credit history might not fit the more stringent qualifications mortgage lenders have adopted since the subprime mortgage crisis.

When I walk to Watchung Plaza from my Montclair home, I take a short route  through an interconnected grid of streets and through a small park.  I wave to my neighbor on the way.  I stop for a brief minute in the park to chat with a friend who’s on her way home from work (she’s just gotten off the 5:31 train from Manhattan).  It’s social.  It’s interactive.  It’s exercise.  It’s green.

On the other hand, it’s very difficult to walk to the train station, or the corner store to get milk in a town that is laid out in a branching street pattern with a series of dead-ends -aka cul-de-sacs- feeding in to a main artery. In these configurations, you can be a stone’s throw from your destination, but have to travel a mile to get there.  This may be a satisfactory layout for the car but not for the pedestrian or bike rider.

Watch this very clever video from the Congress for New Urbanism and you’ll see what I mean…

httpv://www.youtube.com/watch?v=VGJt_YXIoJI

South Orange Performing Arts Center

 For those of us who opted for the staycation this year, ArtsMaplewood and SOPAC offer a welcome distraction:  Free Outdoor Performances for Kids & Families  Kids: bring your parents to this event, grab your red-checkered picnic blanket, but leave the basket at home. Whole Foods will be on site selling delicious meals for the family.

Wednesdays in South Orange (Cameron Field in Meadowland Park)
Thursdays in Maplewood (Memorial Park)

Two Performances Each Day at 5 & 6:30pm

Wed, Aug 19 & Thu, Aug 20
Little Red Rosie and the Three Big Pigs  (I am proud to mention that friend and colleague, Nancy Chu -who moonlights in the theater-wrote and directed this performance)

Wed, Aug 26 & Thu, Aug 27
Brady Rymer and the Little Band That Could

For years, New Jersey was sprawling westward, northward, and southward with real estate development in formerly rural areas. Now the recession has hit and so many of those big new shiny houses a couple of hours outside the city are losing value rapidly—despite their newness, their immense pasture-like lawns, and quiet isolation. What seemed like a good idea a few years ago is suddenly languishing in the for-sale market.

That’s why now seems like a good time to start talking about why density is good for the planet and good for humans. Yes, density. The word has a bit of a negative connotation. But you’ll get past that. These days, many young families want to live in areas where they can walk places, shop in their towns, spend less time in cars and get to the city quick.  Density is also a good investment.  In the recent economic downturn, towns on train lines have been holding real estate values far better than those far from urban centers.

Walkable Suburb is my new website and blog.  And it’s the focus of my New Jersey real estate business. You can find out more about density, new urbanism and what makes New Jersey’s inner-ring suburbs like Montclair, Glen Ridge, Bloomfield, South Orange and Maplewood, walkable suburbs.  These towns were built early in the last century with walking, community, and public transportation in mind. They are increasingly desirable and make sense for the world today.

Welcome to Walkable Suburb. Please drop in from time to time or sign up for my monthly summaries via email or my RSS feed. I hope to keep the journey interesting with insights, market analysis, and tips for life and real estate in New Jersey’s best walkable suburbs.