CNBNews

Even after the market peak in 2005, Gloucester City, and to a lesser extent Brooklawn, continued to go strong, again out-performing the county average. Camden County showed increases of 4.95% and 2.00% in 2006 and 2007 respectively. Brooklawn had higher increases of 7.18% in 2006 and 8.30% in 2007. Gloucester City continued to have a strong market in 2006 and 2007 with respective gains of 20.33% and 11.70 %, considerably higher than the county figures.

The last half of 2008 did have a considerable slowdown in the local real estate market, and in most areas of the country, continuing from a slower drop in the 1^st half of the year. There were only 92 homes sold in Gloucester City in 2008, less than half of the 195 sold in 2005. Brooklawn showed a slightly better market with 28 homes sold in 2008 down from the peak of 44 sold in 2005. The 1^st and 2^nd quarters of 2009 are expected to show improvement. The more affordable market pricing, coupled with record low interest rates, currently available below 5%, will give buyers better buying power than has been seen in years. In addition, the federal government has instituted a temporary tax credit of up to $7,500 for qualified buyers, even further enhancing their buying power. Despite the slowing market, these factors should encourage qualified buyers who may have been apprehensive during the recent turmoil of the financial market and the uncertainty of the election cycle to re-enter the home buying market.

Home buyers who act in the near future will find themselves in an excellent position. If interest rates rise just a half point from 5% to 5.5%, a buyer requiring a $150,000 mortgage will be paying an additional $46.45 a month on a 30 year loan, this is equivalent to adding $8,653 to the sale price or an additional $16,722 over the term of the loan. Values will have to fall considerably more to make up for the increases in interest rates that are expected.

Even though a homeowner who purchased a home in the last couple of years may currently find themselves “upside down”, (owing more than the current value of the home), values are eventually expected to increase again, albeit more slowly. Gloucester City may never again see an annual increase of 24.46% in average sales price as it experienced from 2004 to 2005, but on average, homes will continue to see long term increases in value and will remain the average homeowner’s most valuable asset. To a certain extent, the increases that Gloucester City experienced in values, was a way for it to “catch up” to surrounding communities. As values rose in surrounding towns during the peak of the market, many buyers were priced out of those markets. They then turned their home search to more affordable towns like Gloucester City, thus increasing demand and therefore values.

Click here: Local Market Data 08

The author is a partner with Labbree Realty, Broadway and Bergen Street, Gloucester City.  He is a licensed Realtor and Broker associate with over 15 years of full time experience specializing in the Gloucester City and Brooklawn markets. Bill Labbree, Jr. holds the Accredited Buyer's Representative(ABR), Certified Residential Specialist(CRS) and Graduate, Realtor Institute(GRI) designations. He currently sits on the Board of Directors of the Burlington Camden County Association of Realtors(BCCAR) and is a past SAC Director of the TReND MLS.