Summary of the New Jersey Real Estate Market
The New Jersey housing market is both bolstered and hindered by nearby New York, one of the biggest metropolitan areas in the world. New Jersey tends to serve as a suburb of New York, and as New York commerce goes, so goes the New Jersey real estate market. This makes the New Jersey market a relatively volatile one, with deals a little more difficult as much of the state is geared towards rental properties and investment acquisitions. However, New Jersey also has its own cluster of industries independent of New York, which keeps the state real estate market under control when the out of state commerce is fluctuating.
General Real Estate Prices in New Jersey
Median home prices in New Jersey are above the national average, especially around the more populated areas. New Jersey usually fluctuates around the top 15 in median home prices. Many homes in New Jersey have incredibly valuable architecture, which raises the value of the surrounding homes and neighborhoods. Proximity to these types of neighborhoods also induces a greater amount of stability in the prices of the homes, as foreclosures are less prevalent there. Fixed rate mortgages are above the national average, and adjustable rate mortgages are only good deals in New Jersey if a plan is in place to pay the house off before the term is up. Adjustable rates follow and sometimes multiply the national average for adjustable rate mortgages, because of the relatively high volatility of the industries there and the fluctuating foreclosure rate.
Top Cities in New Jersey
The largest city in New Jersey is Newark. The city is the largest in the state because it is the hub for the New Jersey / New York metro connection, and is a center of railroad, sea, and air transportation. In fact, transportation has eclipsed manufacturing in recent years as the top industry in the city, along with the continually growth based industry of telecommunications. However, telecommunications is one of the most volatile new industries, which definitely contributes to the volatility of the local real estate market. However, the chemicals trade keeps the city going as one of the busiest in the state even in bad times.
Jersey City is the second most populous city in New Jersey. It has recently experienced a spike in tourist activity, thanks in no small part to the popularity of television shows based on its young adult lifestyle. Though this is good for the state as a whole, it does not do much for the local real estate market, and as one of the more populous areas in the state, its foreclosure figures and volatility sway the numbers for the rest of the state. Jersey City tends to have a seasonal real estate market, with higher prices for rentals and buyers in the summer, and lower prices in the winter months. Other leading industries which stabilize the state and provide much employment are educational services, social assistance, and health care. The health care industry has had pullbacks in the recent past, but its effect on the real estate market seems to be negligent.
The top 5 cities are rounded out by Paterson, Elizabeth, and Edison. The state as a whole writes the third most life insurance policies in the nation. These cities also benefit from New Jersey’s world class shipping terminal and railway routes.
Types of Mortgages Offered in New Jersey
New Jersey offers fixed rate mortgages, which, as stated before, are mostly above the national average. The adjustable rate mortgages offer the best chances for a deal, but are more volatile and are usually only used by investors or people who can pay the mortgage off before term. New Jersey financial institutions offer both 5 / 1 adjustable rate mortgages and 3 / 1 adjustable rates. There are also reverse mortgages available, home equity lines of credit, 100% financing loans for qualified buyers, and mortgages sponsored by the FHA and VA.
Summary of Foreclosure Laws in New Jersey
New Jersey is a recourse state. Lenders use the judicial foreclosure method, and the state allows deficiency judgments. The redemption period is notably short in New Jersey, only 10 days. Also, lenders can file complaints to collect on payments in lieu of accelerating the note. An uncontested foreclosure takes around 250 days to bring into effect.
The Foreclosure Process in New Jersey
The lender must, before starting the foreclosure process, mail a letter to the borrower at least 30 days before in notice of the pending foreclosure proceeding. The debtor has the right to avoid further proceedings by paying off the defaulted amount in full. Otherwise, the lender begins the foreclosure by going through the courts. The lender has the choice of bringing forth lawsuit for either the payments that are in default or the whole of the principal balance. The debtor must be informed of this action either in person or by public note. After this notification, the debtor has no less than 35 days to respond to the notice. If no response is made, the court can rule, and and date of sale for the property is scheduled.
The foreclosure sale notice must be placed on the physical property, in the county office of the property, and must be published in at least two newspapers. At least one of these public notices must be in the county seat or in the largest municipality. The debtor must be given notice of the sale at least 10 days before the scheduled date. The foreclosure is in the form of a public auction, administered by the office of the sheriff, and the property goes to the highest bid. The sheriff is responsible for the transfer of the foreclosed property to the new owner within 10 days after the property sells. The sale must also be confirmed by the court as well. The last of the debtor’s redemption rights occurs during this 10 day waiting period, during which they may object to the court or pay off the defaulted amount.
State Government Programs in New Jersey for Home Owners
New Jersey sponsors a program for qualified police and firemen to finance home ownership after retirement. These are some of the most competitive mortgage rates in the state. Another large state sponsored program is the Live Where You Work Program, which attempts to reward people who want to buy homes in the communities in which they work. New Jersey also has programs and laws for teachers to help with home ownership, and to those with physical and mental disabilities and their caretakers.
New Jersey has enacted many anti predatory laws that include limitations on charging fees and points in excess of a certain percentage of the total amount of money financed. Lenders are also prohibited from giving loans that borrowers can not reasonably pay. Also, most notably, the Civil Code Provision of the Real Estate Act of New Jersey prohibits variable rates from fluctuating too much, and forces borrowers above a certain total financed amount to take a fixed rate loan. There are also laws against charging interest unfairly before all proceedings in buying a real estate property are fully concluded.