Author Archives: vlm


The Wizard of Oz and the Perfect Storm

Real estate values are about to free fall

Close your eyes for a moment. Picture the scene from the beginning of The Wizard of Oz when Dorothy and Todo get locked out of the storm shelter. They run back to the house to Dorothy’s bedroom. The next thing you know the house is free falling in a tornado.

Real estate values are about to free fall as if they are affected by a tornado and no one knows where the landing will be or how hard they will hit the ground. For real estate values the tornado is coming, and the storm shelter door has been locked months.

Until recently the only asset class not affected by inflation has been the value of real estate. The wealth you have built in your home since 2008 but especially over the last two years has now caught the inflation bug.

Raising oil prices and interest rates, which by themselves would increase inflation, have an inverse relationship to the value of your home. Higher oil prices, interest rates and more inflation will drive down the value of your home.

There are two ways to reduce inflation and preserve the value of your real estate investments as well as other assets. Government can reduce the restrictions on the production and exploration of United States oil and flood the domestic and European markets with an abundance of oil. This will drive down oil prices, interest rates, the cost of all goods and services and inflation within a few months. Or we can sit back and witness what the government seems hell bent on doing. Curb inflation by limiting oil production, driving prices on everything up, increasing the interest rate and destroying your wealth by crashing real estate values. If your wealth is reduced, you have less money to buy things with.

Anyone who is close to or is retired, especially if your mortgage is paid off, still has an opportunity to preserve their wealth. Sell your home now and ride out the perfect storm to survive the crash landing. You will have great opportunities. There is always a rainbow at the end of the storm.

There is always a rainbow at the end of the storm

 

Baby Boomers: Time to Cash Out Your Home

Baby Boomers Time to Cash Out Your Home

It has never been a better time to cash out your home’s equity and Baby Boomers are the age group poised to benefit the most from today’s housing market. 

Preserving one’s wealth is the most important action you can take.  Baby Boomers who have been fortunate to experience property appreciation and have not taken the equity out of their homes, should be thinking about ways to reap the benefits and create other opportunities for wealth building without incurring more debt.

Up until October of 2021 the pattern of contracts for the resale of homes priced over $500,000 was approximately $20,000 to $30,000 over listing price. From then until the present homes priced over $500,000 are commanding resale prices of $75,000-$125,000 over listing price.

If you want to take advantage of your one asset that has appreciated the most in your lifetime you might want to consider selling your home now because the train is about ready to leave the station.

Since February of this year interest rates have increased 2 ½ %. For every 1% increase in the home interest rate a buyer loses $10,000 of buying power for every $100,000 borrowed. If a buyer is comfortable making monthly mortgage payments on a $500,000 mortgage and interest rates go up by 1% point that same mortgage payment will translate to a $450,000 mortgage.

A 2 1/2 % rate increase will decrease the equivalent mortgage to $375,000. This is great news for buyers and terrible news for sellers.

Consider this. Inflation affects everyone’s life in a negative way. Some economists are saying that the only way to stop inflation is to raise the interest rate higher than the inflation rate. The inflation rate now is approximately 8%.

Three or four months from now you probably don’t want to say to yourself, “If only I sold my house.”

Stay healthy and safe and look for those great opportunities. Contact me to assist your search…

Interested in more home buying advice and in exploring opportunities in South Jersey? Be sure to follow our Facebook page!

Listing Price vs. Selling Price – What to Expect

Listing Price vs. Selling Price - What to Expect

What is a fair listing price? What is a fair selling price? The listing price vs. selling price difference is determined by a number of factors. Whether a REALTOR sells four homes a year or four hundred homes, the rule of thumb for establishing a listing price for a homeowner or making an initial offer for a buyer is always the same. Statistics show that in a market where there are approximately an equal number of buyers and sellers, homes will sell from 88-92% of the listing price.

If I am working with a seller, I advise them to list their home at 10% but no more than 15% above recently sold similar homes in the past six months. If I am working with a buyer, I suggest making an initial offer of 10% but no less than 15% below recently sold similar homes in the past six months. More often than not unless there is a bidding war, the contract amount for the home will end up being in that 88-92% range of the original listing price.

Homes that are priced this way will attract 60% of the buyers that are looking for homes in the particular price range.

Some sellers don’t understand this and demand that their home be priced at a number that the homeowner wants. An unrealistic seller could say that they want to get back the full value for recent improvements. In all reality no one cares how much money a seller has put into their home. However, improvements will increase the chances of selling a home in relation to other homes that have not been improved. Ultimately price is determined by the supply and demand of the market.

Some buyers have the mindset that they are going to negotiate a ridiculously low price and get their dream home at a steal.

The goal with listing price vs. selling price is finding a balance. The bottom line is no one is going to pay more for personal improvements that a homeowner falls in love with and a buyer is not going to steal a home. A good deal is one when both the seller and buyer feel that they have made a fair deal for everyone. Your home is worth whatever price someone is willing to pay for it.

Get More Listing and Selling Price Advice!

Stay healthy and safe and look for those great opportunities. Contact me to assist your search…

Interested in more home buying advice and in exploring opportunities in South Jersey? Be sure to follow our Facebook page!

How Sellers Price Their Homes

how sellers price their homes

Clients often ask, “How much under the listing price should we offer?” The best way to understand market value is through comparative research to see how sellers price their homes in the area. Professional real estate consultants review and study at least 40 to 60 listings, visit 10 to 20, and inspect 5 to10 properties to develop a sense of relative worth for properties in a given area.

Additionally, a professional appraisal factors into determining the fair market value of the home. An appraisal protects you because Lenders want to make sure that you don’t overpay for a home. If the home value does not meet the sale price in the eyes of the appraiser, they’ll let you know. At that time, the Realtor can renegotiate the sale price or void the agreement and refund your earnest money deposit.

Four basic factors influence how sellers price their homes:

1. Sellers Get Poor Advice

Some real estate agents inflate the value of the seller’s home in an effort to obtain the listing. There’s a natural tendency on the part of sellers to list with the real estate agent who gives them the promise of the highest selling price. When homes are overpriced, they

• Stay on the market longer

• May not sell

2. Sellers Set an Unrealistic Price for Emotional Reasons

These sellers believe their home is worth every penny of their asking price for personal reasons. Sometimes they lose their objectivity and focus on features that seem more valuable to them (rather than to the buyer). For example, the suede wall-covering in the master bedroom may not appeal to potential buyers.

Additionally, some sellers, anticipating reticence to buy, feel it’s a good idea to leave a little “negotiating” room in the asking price.

3. Sellers Price their Home at Fair Market Value

These sellers carefully and realistically study other homes for sale, and may consul.t with a real estate professional. They price their home competitively, and it usually sells quickly at (or very near) the asking price.

4. Sellers are Motivated to Sell

When sellers want a fast sale, they price their home below fair market value. These homes usually sell right away, at or above the listed price. There are usually competing offers.

Eric Schlamowitz is your established Realtor in the South Jersey region – whether you’re buying or selling a home in the area, he can help you! Reach out to Eric to set up an appointment today and get started on your new home adventure.

Eric and his team have a wealth of experience in helping residents buy homes, and can help you understand how sellers price their homes and what to be aware of. We’ll help you determine the fair market price for any home. Our job is to ensure that you have the tools and information you need to make an informed decision. We’ll help you every step of the way.

Interested in more real estate advice and in buying a home in South Jersey? Visit our Facebook page for up to the minute updates and advice!

Coming Out of the Funk of the Pandemic Fog

Coming Out of the Funk of the Fog

It has been two years since the virtual reality of living in a daily fog overtook our lives. Expectations, goals and dreams were either put on hold or vaporized in front of our eyes. A sense of hopelessness created a funk for everyone, young and old. We celebrated the spring of 2020 with a national lockdown. Today, we have the opportunity to celebrate the spring of 2022 with reconnection and a new beginning of hope.

If we have learned anything from the past two years, it is that there are very few things that we can control. Something we can control is how we create wealth through real estate or protect the wealth that we have already created with the home and properties we own.

Over the past two years the real estate market has been great for sellers and stressful for buyers. Despite the insanity, there are good options and strategies for both buyers and sellers to make deals that benefit both sides.

Browse through my new updated website and let me know if you would like to discuss your options in creating your real estate wealth or protecting what you have in these crazy times. Or just drop me a line and say hello and let me know how you are doing.

The Real Estate Shift Is Here – Expect Prices to Drop

The Real Estate Shift Is Here - Expect Prices to Drop

Over the past two years sellers have reaped the benefits of increased property values. A low inventory of homes on the market over this time was only an extension of a pre-pandemic trend. Based on supply and demand, a low inventory of homes combined with an overabundance of buyers means property values will go up. Buyers have also helped to increase property values. Most buyers got caught up in the emotional side of the buying process and couldn’t help but overpay for a property.

The proposals to purchase one of my listings had offers that varied by $200,000. A buyer on another listing of mine paid $50,000 over other comparable properties, waived the home inspection and was willing to pay another premium if the property didn’t appraise for the contract amount.

Upcoming moves by the Federal Reserve will likely prevent buyers from overpaying for properties and force property values down.

The Federal Reserve has indicated that there will be three to four interest rate hikes this year. Some experts think there could be seven to eight rate hikes to slow down and decrease inflation.

Increased interest rates, reduces the buying power for individuals. This results in lower property values for sellers. For every point that the cost to borrow money increases a buyer loses $10,000 of buying power for every $100,000 borrowed.

For example, if you are comfortable making monthly payments on a $200,000 mortgage and the interest rate goes up one point you will now only be comfortable buying a home with a $180,000 mortgage in order to maintain the same monthly payment.

If each interest rate increase varies from ¼ to ½ percent a buyer could be looking at an interest rate increase of 1 to 2 percent by the end of the year. In the example above a 2 percent interest rate increase would reduce buying power by $40,000, resulting in a mortgage loan of $160,000.

If you are a frustrated buyer because you keep losing your dream home in a bidding war just have patience. The prices are coming back to you. Sellers who feel they don’t want to miss out on the recent prices for homes will help to increase inventory by listing their homes. This in turn will also help to reduce home prices.

Free Home Valuation

Taunton Lakes Neighborhood in Medford, NJ

Taunton Lakes Neighborhood

One of the hidden gem communities of Burlington County in South Jersey is Taunton Lakes in Medford. The community of a little more than 100 homes is also known as the Old Taunton Colony Club. Most of the homes are located on a pristine lake, where, if you look close enough, you will find homes situated within the natural Pinelands habitat. No two homes look alike and vary in style and size, but all the homes compliment the neighborhood scheme.

There is a rich history of this area that goes back to Revolutionary War times. Taunton Lakes evolved from an area that focused around iron works, making furnaces, forges, and cannon shot to an area of cranberry bogs that became the favorite place for local outings during the mid-1800s.

In 1920, a Philadelphia businessman bought the properties around the lake prior to the completion of the bridges over the Delaware River between Pennsylvania and New Jersey hoping to develop Taunton Lake into a satellite community of Philadelphia. World War II slowed the development of the community. Eventually remaining lots were sold to the Taunton Lakes Company formed by the local residents that also purchased the lake.

The homes on the lake can vary in price from the low $300,000 to the high $900,000 range. Being situated on the lake will also add to the value of your home. It is common to see ducks and turtles swimming past your dock while watching the sun rise or set depending on which direction your home faces. Families enjoy water activities at the beach or off their respective docks. It is a great lake if you enjoy open water swimming, especially if you are a triathlete that would like to swim at least a mile.

Taunton Lakes in Medford is located in the Lenape Regional School District where public school students will attend Shawnee High School. It is nicely tucked away from typical Philadelphia suburb congestion, yet it’s easy enough to access great shopping and dining on NJ Routes 70 and 73 in the direction of Cherry Hill and Marlton. It’s ideal quiet and convenient living, and we believe you’ll love it here!

Find Out More About The Taunton Lakes Neighborhood!

Are you looking into buying a beautiful home in Taunton Lakes? Reach out to Eric Schlamowitz today or use the form below to contact us…we can help you find the ideal home for you in the area!

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Hoot Owl Estates Neighborhood in Medford, NJ

Hoot Owl Estates

You could live in Medford New Jersey your whole life and never know about Hoot Owl Estates. It is a quite a neighborhood gem that, until now, most people aren’t aware of.

The Hoot Owl Estates neighborhood of Medford is nicely tucked away between Hartford, Tuckerton and Taunton Roads. Pride of ownership is on display in this neighborhood, where most homes were built between the early 1970s and late 1990s. The average home re-sells for approximately $350,000.

For people like military families and first time home buyers, as well as anyone downsizing, that are interested in living in a semi wooded community, Hoot Owl Estates is an ideal spot.

There are several golf courses just five minutes away from home here, in Kings Grant, Marlton and Medford. Vincent’s offers the best sushi in Medford, and Riviera Pizza offers the best pizza in the area. Both are located within just three minutes. It’s also a great place to begin your weekend bicycle ride, on the way to Shamong, Tabernacle or the blueberry fields of Hammonton.

Best of all, homes here are a part of the beautiful town of Medford, NJ – a place that is convenient to the city of Philadelphia and is just an hour’s drive from great resort towns on our world famous Jersey Shore. Hoot Owl Estates offers some of the best of South Jersey living.

View Home Listings Here

Ask Eric About Hoot Owl Estates Today!

If you are interested in this or any other Medford, New Jersey neighborhood, contact Eric Schlamowitz today. Eric works on both commercial and residential property development projects throughout the greater South Jersey region. As a Registered Architect in New Jersey, Eric Schlamowitz has also provided real estate, architecture, design, construction, owner’s representative, and project management expertise and experience for over 30 years in New York, Pennsylvania, and New Jersey.

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    Be Your Own Short Sale Advocate

    Be Your Own Short Sale Advocate

    You can and should be your own short sale advocate. If you find yourself going down the short sale path just remember the best person that can increase the odds of a positive outcome, is YOU. Solving all the moving parts that have to be coordinated for a successful short sale is another full-time job.

    Realtors and attorneys don’t like short sales because the amount of time required doesn’t justify their fee. The banks change their people working on any particular file every three months, so you have to keep telling your story over and over and over. It often seems like no one really cares. If you have liens or are behind in credit card payments, you have to negotiate a settlement that gets wrapped into the sale.

    All this will seem daunting but who knows, can fight for and explain your situation better than you. In order to begin the short sale process with a mortgage holder you first have to get your house under contract. This will usually stop the foreclosure process because you are showing that you are being proactive in resolving the problem. A lender and creditors would rather give you time to complete a transaction than pay approximately $25,000 to an attorney to sell your home at foreclosure.

    There is no quick remedy to a short sale. If you are persistent and never give up, you just might have a successful outcome.

    Free Home Valuation

    Now is the Time to Get Out of Your Huge Mortgage

    Now is the Time to Get Out of Your Huge Mortgage

    The great Yankee philosopher, Yogi Berra, once said, “It seems like déjà vu all over again”. In a few months I believe the real estate market is going to look like 2008 all over again. There has been a moratorium on mortgage payments for people who have been adversely affected by the circumstances of the past year. Once the moratorium is lifted those people might find themselves in a situation where they still cannot make mortgage payments.

    Now is the Time to Get Out of Your Huge Mortgage

    If you feel you might be faced with a short sale or foreclosure just remember this. DO NOT PANIC. Take a deep breath and let the anxiety flow out of your body. If you are proactive you can turn this negative situation into a positive outcome. Since inventory is very low and many homes for sale end up in bidding wars you might be able to benefit from the current market.

    Depending on your specific circumstances you can sell your house and net enough or close to enough money to pay off the outstanding mortgage.

    If you are interested in exploring this path you can contact me. This process has many moving parts that need to be coordinated in order to achieve a successful outcome. I have helped many sellers successfully maneuver the process. There is no quick fix but if you have patience you can have a positive outcome.