New Jersey Real Estate

From The Wall Street Journal Online

Home buyers may now need to pull out their calculators when tackling a common dilemma: what to do if they don't have enough money for a 20% down payment.

In recent years, piggyback loans, low-cost and easy to get, have been the product of choice for many cash-strapped consumers eager to purchase homes. But with short-term interest rates now sharply higher -- currently above 8% -- piggyback loans are less appealing. Now, there are signs that some borrowers are giving traditional private mortgage insurance a second look.

New federal tax legislation expected to be signed by President Bush today gives some consumers even more reason to turn to mortgage insurance. The new law makes the insurance premiums tax deductible for some borrowers who take out new mortgage-insurance contracts in 2007. That is in addition to the tax deduction homeowners can already take on the mortgage interest they pay.

What's more, new guidelines issued recently by bank regulators could make it tougher for some borrowers to get piggyback loans, particularly if these are paired with exotic types of mortgages that may increase risk. Some lenders have already seen higher delinquencies on piggyback mortgages.

For borrowers, whether a piggyback loan or mortgage insurance makes more sense is likely to depend on interest rates as well as an individual's borrowing needs. "When rates were very low, there was no question that a...piggyback was more economical for consumers," says Doreen Woo Ho, who runs the home-equity business for Wells Fargo & Co. Now, she says, the two options are "more competitive."

As the cost difference narrows, Vanessa Meyer, a veterinary technician in Fort Morgan, Colo., opted for mortgage insurance when she and her husband refinanced their mortgage last month. Ms. Meyer says mortgage insurance was "a little bit more [expensive], but we wanted one payment."

With a piggyback loan, a borrower takes out a mortgage for 80% of the home's value and finances the balance of the debt with a fixed-rate home-equity loan or a home-equity line of credit, allowing consumers to borrow as much as 100% of a home's purchase price. Piggybacks were particularly attractive when short-term interest rates were at rock-bottom levels. As recently as 2004, borrowers could get home-equity lines of credit with rates as low as 4%, well below the rate on their main mortgage. In addition, interest on home-equity loans and lines is typically tax-deductible.

With mortgage insurance, a borrower with less than 20% to put down takes out a single loan and pays a mortgage-insurance premium that can vary based on the amount the borrower puts down, credit history and other factors. For a $225,000 mortgage, for example, the insurance premium could run $50 to $100 a month. (In some cases, the lender pays the mortgage-insurance premium and charges the borrower a slightly higher interest rate.) Lenders require mortgage insurance because borrowers who put little, if any, money down are more likely to default.

The popularity of piggyback mortgages has grown sharply. Some 49% of home purchases made in the first three quarters of this year that required financing included a piggyback mortgage, up from 24% in 2002, according to SMR Research Corp., a market-research firm.

But there are signs that this growth has stalled and that mortgage insurance may be making a comeback. SMR says piggybacks' share of the market was flat in 2006, following years of steady increases. Meanwhile, 6.3% of mortgages originated in the third quarter carried traditional private mortgage insurance, up from 5.9% a year earlier, according to Inside Mortgage Finance, an industry publication. The figures are based on the dollar value of loan originations and don't include mortgage insurance purchased by lenders on a bulk basis.

Mortgage-insurance providers are expecting business to pick up in the wake of the tax-law change, which they had lobbied for. The Mortgage Insurance Companies of America, a trade group, is spending $1.1 million on an advertising campaign aimed at mortgage brokers and real-estate agents. Genworth Financial Inc., a leading mortgage insurer, is running "webinars" to explain the implications of the new law. PMI Group Inc. is sending out 15,000 foam oranges with stickers saying mortgage insurance is now deductible.

Mortgage lenders are also rethinking their strategies. J.P. Morgan Chase & Co. is currently looking at how to help its loan officers understand the new rules and decide whether mortgage insurance or a piggyback is a better bet for borrowers. "There's a whole generation of mortgage brokers who have not seen or sold mortgage insurance," says Thomas Kelly, a J.P. Morgan Chase spokesman.

The new tax legislation makes premiums fully deductible for borrowers who take out a new mortgage-insurance contract in 2007, provided they have $100,000 or less of adjusted gross income ($50,000 if married and filing separate returns). The deduction phases out for borrowers with incomes between $100,000 and $109,000. The deduction applies to insurance on mortgages taken out to buy homes and on refinancings, provided the new loan isn't for more than the amount of mortgage debt being refinanced. To claim the deduction, borrowers must file an itemized tax return. Unless the law is extended, the tax break will expire at the end of 2007.

Borrowers who took out piggybacks in recent years have seen the rate on their home-equity line increase by as much as four percentage points. Now some borrowers whose adjustable-rate mortgages are resetting are opting for mortgage insurance instead of a piggyback when they refinance, says Michael Zimmerman, vice president of investor relations for mortgage insurer MGIC Corp.

Consumers should compare the monthly payments on a piggyback versus mortgage insurance. If the rate on the home-equity line is more than two percentage points above the rate on your primary mortgage, "you should be strongly considering a mortgage-insurance policy," says Keith Gumbinger, a mortgage analyst with HSH Associates. "But you need to run the numbers."

HSH offers a calculator (www.hsh.com) that helps borrowers determine how much they would pay with mortgage insurance. And mortgage-advice Web site www.mtgprofessor.com includes calculators that borrowers can use to compare the costs of a piggyback versus mortgage insurance.

The size of the piggyback loan can also make a difference. "If you are taking out a $400,000 first mortgage and a $30,000 or $40,000 [home-equity loan]...it still may make sense to pay a little higher rate on $30,000 or $40,000, rather than paying mortgage insurance on the whole $430,000," says Dan Arrigoni, president of U.S. Bank Home Mortgage, a unit of U.S. Bancorp. In an effort to keep loan volumes up, some lenders are offering special deals that make piggybacks attractive to borrowers with good credit even as short-term rates move higher.

Another factor to consider: how fast you expect to pay down your mortgage. Since 1999, mortgage insurers have been required to automatically cancel the premium when a homeowner has paid down the mortgage to 78% of the original purchase price. Also, homeowners can ask their lender to stop premium charges if rising home prices and monthly mortgage payments bring their loan amount to 80% or less of the home's value.

"It may involve springing for an appraisal, but that can quickly pay for itself," says Greg McBride, a senior financial analyst with Bankrate.com. Homeowners selecting this route should use an appraiser who has been approved by their lender, he adds.

Some caveats: Borrowers typically can't terminate their mortgage insurance in the first two years after they have taken out their loan, says Jack Guttentag, professor emeritus at the University of Pennsylvania's Wharton School. Borrowers may also be unable to cancel their mortgage insurance if they had a late or missed payment or if they took out a home-equity loan or line of credit.

--------------------------------------------------------------

If you are looking for homes for sale in Spring Lake NJ, Newark NJ,  Marlboro NJ or any other area in New Jersey ERA Othello Realty are the real estate agents that you are looking for.  Whether you are looking to buy or sell your New Jersey real estate they can help you.  We list homes for sale in Manalapan NJ, Point Pleasant Beach real estate and many other New Jersey properties for sale. Aberdeen NJ Homes for Sale, Homes for Sale in Marlboro NJ and Information on Marlboro NJ. Search through thousands of houses for sale in New Jersey. We are the realtors NJ!

From The Wall Street Journal Online

The state of the housing market in much of the country may be gloomy but in Manhattan, real-estate brokers are still celebrating -- and record Wall Street year-end bonuses are only part of the reason.

In many major metro areas, from Miami to San Diego, the number of homes listed for sale has soared over the past year or two as sales have plunged. Median home prices in the U.S. fell 3.5% in October compared with a year ago, the largest year-over-year drop on record, according to the National Association of Realtors. A new report from UBS AG predicts a continued decline and warns that the slump could "seriously impact the overall economy" in 2007.

Yet despite the national outlook, Manhattan has shown resilience, fueled by lower-than-average unemployment rates, a surging financial sector and a swelling population of millionaires (and billionaires) immune to the impact of a slowdown.

Manhattan's international credentials are unique in the U.S., says Andreas Hoeferp, chief global economist at UBS Wealth Management Research. A power center that attracts major players in fashion, art, media and finance, the island has more in common with other world capitals like London, Hong Kong or Paris. "Like other financial capitals, the real-estate market here is cushioned by a global demand for housing that's unmatched in the U.S.," Mr. Hoeferp says. Still, there could be clouds gathering, some analysts warn, including a glut of new condominiums and possible price declines.

Overall, the number of homes sold in Manhattan was up about 1% in November versus a year ago (compared to an 11.5% drop in sales nationwide in October), and prices continue to appreciate. Median home prices in the borough rose 17.5% during the same period and 26.8% since November 2004, according to Gregory Heym, chief economist for Realtor Brown Harris Stevens. Manhattan's strength is even more pronounced at the high end, where growing demand for trophy properties is propping up the luxury market. The number of $3 million-plus homes sold was up 6.5% year-on-year in November, according to Mr. Heym.

Among the big-ticket sales: the $27.5 million paid by New York Stock Exchange Chief Executive John Thain for a two-bedroom duplex apartment at 740 Park Ave., one of the city's most storied addresses. Formerly home to Rockefellers, Vanderbilts and Chryslers, the building's current residents include cosmetics executive Ronald Lauder and Blackstone Group chief Stephen A. Schwarzman.

In addition, 38 single-family townhouses priced at $10 million and over sold during the same period, up from 22 last year, says Kirk Henckels, an executive vice president of Stribling Private Brokerage. Those sales include the $53 million that investment banker J. Christopher Flowers paid in October for the century-old, five-story Harkness Mansion on East 75th Street, just off Fifth Avenue. The price for the 20-plus-room limestone mansion, which includes a ballroom, 11 fireplaces and a center atrium, is thought to be the highest paid for a Manhattan residence.

Ballooning Bonuses

The health of the New York real-estate sector is the result of lower unemployment rates than the national average, higher job growth rates and a Dow Jones Industrial Average in record territory. The financial industry, long a bellwether for New York's real-estate economy, is soaring. Through the first nine months of 2006, combined earnings at seven top global securities firms based in New York surged to $39 billion, according to David Trone, a banking analyst at Fox-Pitt, Kelton. Meanwhile, new federal data show the average weekly pay for finance jobs in Manhattan was about $8,300 in the first quarter of 2006, up more than $3,000 per week in three years. A projected $36 billion in bonuses will be doled out this year by the top five investment banks in New York, according to Options Group, an executive search firm, up from a record $21.5 billion in 2005 and nearly a fourfold increase from $8.6 billion in 2002.

"There's an incredible amount of money out there right now," says Jacky Teplitzky, an executive vice president at Prudential Douglas Elliman. "It's not clear if that funnels into real estate, but it certainly can't hurt."

Tatyana Dobryanskaya says she expected to wait until next year before looking for a new apartment. But the 30-year-old fixed income analyst says a bigger-than-expected bonus (she declined to disclose how much) from the investment bank she works for helped to change her plans. She is now in the hunt for something in the $1.5 million-to-$2 million range. "There was really no reason to put this off," she says.

Vincent Piazza, a 36-year old research analyst, has moved even faster. He just signed a contract for a new $1-million-plus loft condo in the Wall Street area. It features 10-foot-high ceilings and marble and limestone bathrooms. Mr. Piazza says his year-end bonus is only part of the reason he's buying now. "I waited a year for prices to come down a bit," he says. "They never did."

Traditionally, the upper end of the New York market tended to hold its own when the city's overall housing market slowed, largely because wealthy buyers were buffered from market gyrations. That was particularly true during the last boom-bust cycle in the late 1980s, economists say. Now, however, even as the national market cools, the entire Manhattan real-estate market is humming, fueled in part by rising income levels and interest from wealthy out-of-town buyers.

Ramesh Vangal, an Indian technology and health-care entrepreneur with homes in Bangalore and Singapore, paid nearly $7 million in October for an apartment on Central Park South. Mr. Vangal says he and his wife and business partner, Katharin, have always loved spending time in Manhattan, but that they bought here for business and financial reasons: "New York has always been an important place to do business, but it's also a good place to invest your money," he says.

Clouds Looming

Despite the robust New York scene, some real-estate observers see warning signs for Manhattan. More listings are crowding the market and the length of time homes are taking to sell is creeping up. Quarterly data show 7,243 units on the market, compared with 6,926 a year ago. The average time a home spent on the market in the third quarter of 2006 before selling was 92 days, a 28-day increase from a year ago.

And while the number of Manhattan sales rose slightly in November compared with the same period a year ago, some of that lift may be inflated. Condos make up only about one-third of Manhattan's housing stock, but they accounted for roughly 44% of sales last month, according to economist Mr. Heym. And much of that came from new buildings where buyers may have made down-payments months or even years ago. That means many of November's "sales" may have occurred when the overall market was still strong. (New condo sales are only registered when the building is completed and residents move in.)

A building boom in the past few years is likely to create a glut next year as new condos are completed. Between 2001 and 2005, there were 21,142 units completed in Manhattan, compared with 12,812 from 1996 to 2000, according to the Real Estate Board of New York. REBNY estimates that there are more than 20,000 new condominium units either under construction or being planned in Manhattan. "The real-estate market here simply cannot sustain that kind of growth," says Nouriel Roubini, a professor of economics at the Stern School of Business at New York University. "Prices will fall very hard."

And brokers shouldn't put too much stock in ballooning Wall Street bonuses. Appraiser Jonathan Miller has analyzed first-quarter sales data since 2003 (bonuses are typically handed out between December and February) and his numbers show no significant bounce in Manhattan home sales, with one year showing a slight decrease. "There's a significant amount of money on the sidelines" in this economy, says Mr. Miller.

The potential for a real-estate slowdown and the imminent glut of new units has done little to slow some developers. Hotelier André Balazs is erecting two new Manhattan condos and recently broke ground on a third -- a 47-story tower in the Wall Street area. Called William Beaver House, the high-rise will include three penthouses, an outdoor Jacuzzi, a hot tub and a 60-foot lap pool with lounge-deck and bar. "I see this as a place for hard-working, hard-playing Wall Streeters," he says.

---------------------------------------------------------------------------------------

Newark NJ Real Estate, Spring Lake NJ Real Estate, Marlboro NJ Real Estate, Jackson NJ Real Estate are all popular destinations.  Spring Lake NJ is the premium shore location with its exclusive homes for sale.  Newark NJ is a popular city location for it's proximity to NYC and it's large business population.  Marlboro NJ is known for it's excellent school district, it's exclusive homes for sale, vicinity to NYC and it's a beautiful area.  Jackson NJ is a very popular residential area in Central New Jersey with many different classes of homes.  If you are interested in real estate in any area of New Jersey, please let ERA Othello Realty help you. Aberdeen NJ Homes for Sale, Homes for Sale in Marlboro NJ and Information on Marlboro NJ. We are the realtors NJ!

From The Wall Street Journal Online

Sadia Bruce never studied natural history in school, but here's what she wants for Christmas: "Cabinet of Natural Curiosities," a $200 oversize book of plant, animal and insect illustrations from the collection of an 18th-century Dutch pharmacist. "It might give the idea that I was cerebral," says the 26-year-old standardized-tests tutor, who lives in Montclair, N.J.

Buying smart is taking on new meaning. From shadow boxes of beetles (pinned and labeled) to replicas of gibbon skulls, home-decor items and other gifts with an intellectual aesthetic are big sellers this season.

Aspiring eggheads sometimes want things they may not even understand. Nancy Bass Wyden -- co-owner of The Strand, a new, used and rare books emporium in New York, and director of its "books by the foot" division -- says sales of insta-libraries, including editions in French and German, are up 140% this year. "I'm not sure if those folks knew how to read those languages," says Ms. Wyden of some recent customers. Prices range from contemporary fiction for $50 a foot to leather-bound classics for $400 a foot. (On the whole, people don't seem all that interested in reading books: Bookstore sales nationwide fell 1.6% in the first nine months of 2006, according to the Census Bureau.) Other Strand clients include private-equity king (and board member of the New York Public Library) Stephen Schwarzman and his wife, Christine, who Ms. Wyden says spent $200,000 on books for their Park Avenue triplex, including pastel-colored books for a bedroom antechamber and movie-reference works and academic books for the family room. Through his spokesman, Mr. Schwarzman declined to comment.

Retailers and marketers say the interest in things that make people look smart is partly a reaction to the Internet, which has made hardcover encyclopedias, maps and models obsolete -- and hence more desirable. Baby boomers, in particular, are keen on items that make them seem well-educated, well-traveled or well-read.

"They aren't hesitant to try to communicate that," says Stephen Gordon, chief executive of the Sundance Catalog, which this season is selling refurbished manual typewriters from the 1940s, including the Royal Arrow ($695), "a steadfast companion during Hemingway's frequent stays in Havana."

At Assouline.com, "Le Questionnaire de Proust," a $295 leather-bound facsimile of the French writer's famous list of interview questions and his handwritten replies -- plus blank pages so contemporary questioners can live out their own Proustian impulses -- is temporarily sold out. Modern Library's six-book boxed set of "Remembrance of Things Past," meanwhile, is ranked 27,318 on the Amazon sales list.

The smart look is partly rooted in the sciences, both natural (astronomy, geology, zoology) and applied (architecture, forensics, medicine). Sales of minerals such as amethyst geodes and fool's gold at the American Museum of Natural History in New York have soared more than 130% this year. The museum store recently added provenance certificates to some of its gold and meteorite samples, attesting to where and when the rocks were mined or found. Several pages of Restoration Hardware's holiday catalog this season are devoted to astronomy-themed gifts. And "Cabinet of Natural Curiosities" is one of the most popular items from art-book publisher Taschen, which released a smaller, more affordable $60 edition last year. Its distinctive red coral cover made it an instant hit in design magazines and stylists frequently use it as a coffee table prop.

"People like science stuff that subconsciously has a lot of weight because it doesn't seem frivolous," says David Thompson, president of Vagabond Vintage Furnishings, an Atlanta-based wholesaler that sells to Williams-Sonoma Home and other companies. "They want things that seem sophisticated."

Some retailers are increasingly veering into the unusual or the macabre. A series of decoupage plates by John Derian ($880) depicts a 19th-century image of a skeleton. The Evolution Store in New York City, which sells replicas of skulls (a replica of the Australopithecus "Lucy" is a top seller) and other bones, has opened a new department devoted entirely to insects. Companies are also exploring funkier parts of the natural world, such as fungi, sea creatures and crustaceans. A stylized faux sea-urchin condiment bowl with a gilded interior and a silver spoon is the best-selling new item from Vagabond Vintage Furnishings.

Not everyone approves of decorating to look brainy. "Queer Eye" interior designer Thom Filicia compares it to wearing eyeglasses without a prescription. "It's creating a façade," he says. Literary and culture critic Harold Bloom is similarly unimpressed. "I find it too absurd to stimulate me to any comment," Mr. Bloom wrote in an email. Others object solely on visual grounds. "Personally, little bird skeletons frighten me," Mr. Gordon says.

------------------------------------------------------------------------------------

ERA Othello Realty can help you buy or sell your home.  732-364-2015.  We offer relocation packages for corporate accounts, government accounts or for individuals.  Whether you are moving from out of state to New Jersey, or you are within NJ and are moving north, south or lateral. We are your NJ Relocation specialists and we look forward to being challenged by your needs.  From finding a house to selling your house, from moving companies to utility changes, and from school assistance to job assistance we are here for you every step of the way. We are the realtors NJ!

From The Wall Street Journal Online

Investors, painfully aware that the housing market is in the doldrums, may be surprised to learn that some of this year's best stock performers have been real-estate companies.

Yes, home builders have been basement dwellers and some lenders look shaky. But real-estate investment trusts are up more than 30% year-to-date, and the real-estate mutual funds that invest in them are hitting home runs, according to fund-tracker Morningstar. REITs, as they are known, are tax-advantaged stocks that concentrate on the commercial side of the real-estate business and distribute the lion's share of profits to shareholders through dividends. They deal in office parks, shopping malls and apartment buildings -- rather than McMansions.

Commercial construction has been booming after a protracted slump earlier this decade. During the first half of the year, commercial building grew at a 15% annual rate, according to Commerce Department data. The sector contracted in 2001, 2002 and 2003, so likely isn't as overdone as the residential side. Overbuilding would be a big problem for REITs because that would drive down rents, their primary source of income.

Low interest rates help, and the private-equity boom has added steam to some REIT players, luring investors who want to bet on the next fat deal. REIT mergers and acquisitions have hit a record $117 billion in 2006, according to the National Association of Real Estate Investment Trusts, soaring from $30 billion for the past two years combined.

But has the REIT run gotten overdone? One recent event raises the question: industry icon Sam Zell's $20 billion sale of Equity Office Properties Trust, the REIT he took public in 1997, to Blackstone Group. If Mr. Zell is selling, perhaps that says something about the outlook for the sector as a whole.

REITs look pricey by other measures. Consider one metric of how much investors are paying for every dollar of the cash REITs produce -- called price-to-adjusted funds from operations. It stands at 26, well above the group's historic average of 15, according to Green Street Advisors, a real-estate research firm.

"REIT valuations are just so high relative to other assets that the sector as a whole is really susceptible to a shift in investor sentiment," says Christopher Mayer, a real-estate professor at Columbia University and a board member of Oak Hill REIT Management, a hedge fund.

"Everything has to work right in the wonderful world of real estate that we live in," says Sam Lieber, Alpine Mutual Funds president.

------------------------------------------------------------------------

Looking to buy a home in New Jersey? ERA Othello Realty can assist you to purchase a house in NJ . A home is a house you make your own and we would like to help you buy real estate in New Jersey .  From Lakewood NJ real estate to Brick NJ homes, from Jackson New Jersey houses to Toms River waterfront property. From the Jersey Shore houses with a slip to a condo in Point Pleasant beach.

From The Wall Street Journal Online

Scott Rechler, chief executive of Reckson Associates Realty Corp., is poised to run a new real-estate venture, but his new company won't have Reckson or Rechler in the name.

Under terms of an agreement announced by his family, Mr. Rechler is divesting himself of most of his stake in the family business, Rechler Equity Partners, and will agree to restrictions on the use of Reckson or Rechler in the company name, said Gregg Rechler, a Rechler Equity managing partner and Scott's brother.

The announcement doesn't reflect animosity toward Scott Rechler but a need for brand clarity in the Long Island, N.Y., market where the two sides of the family could compete head-on, added Mitchell Rechler, a Rechler Equity managing partner and Scott's cousin.

That competition became a likelihood last week after Reckson shareholders voted to approve a merger of the Uniondale, N.Y., real-estate investment trust with SL Green Realty Corp., another REIT, for about $4.1 billion, not including debt assumption. As part of the agreement, SL Green agreed to sell about one-third of the portfolio in a secondary transaction to a group of investors led by Scott Rechler for $2.1 billion -- a deal that became controversial because some shareholders considered the price too low. Mr. Rechler's group will own office properties in Long Island, New Jersey and Westchester County, N.Y., unless the deal fails to close.

Scott Rechler, in an interview yesterday, said the sale of his stake in Rechler Equity will allow him to use the proceeds toward the suburban portfolio acquisition. He said he hasn't decided on the name for his new real-estate company.

Rechler Equity's announcement essentially completes a split -- business-wise -- in the family that started three years earlier. After several years as a publicly traded company, Reckson came under pressure from analysts for having so many Rechlers involved in the company. As a result, in 2003, Scott Rechler moved up to sole chief executive from co-chief, and four other family members, including his father Roger and uncle Donald, left the company. As compensation, they bought the company's industrial portfolio from Reckson for $315 million.

At that time, Scott Rechler retained a small equity holding in the portfolio that became the core of Rechler Equity Partners. His family members substantially bought him out last week. Although Scott Rechler will retain a fractional interest in the company, he will no longer participate in business decisions. The family's buyout of Scott "demonstrates our commitment to the Long Island marketplace," Donald Rechler said in a statement. "We wish Scott all the best with his future endeavors."

--------------------------------------------------------------------------

ERA Othello Realty is your real estate source for New Jersey Real Estate. We have real estate agents throughout NJ. From Monmouth and Ocean county to Passaic and Mercer county we will help you buy a home or sell a house. From Freehold houses to Marlboro homes and Manalapan real estate we have central NJ real estate covered. From the Jersey Shore condos to mansions on the waterfront, we are your NJ Real Estate source.