Source: Record, The; Bergen County, N.J.
Publication date: 2006-08-16
By PRASHANT GOPAL, STAFF WRITER
The pace of existing-home sales in New Jersey was down 16.3 percent in the second quarter, compared with the same period in 2005.
Nationally, the pace of home sales in the second quarter slowed to a seasonally adjusted rate of 6.69 million units, down 7 percent from the prior-year quarter, the National Association of Realtors said Tuesday.
With inventories of unsold homes mounting, price appreciation is slowing. Nationally, the median sale price for an existing single- family home was $227,500 in the second quarter, up just 3.7 percent over a year. The nation's strongest increase was in the Northeast, where the median price rose 6.3 percent.
In the New York City region, which includes Bergen, Passaic and Hudson counties, the median sale price was $549,200 in the quarter, up 8.4 percent but short of the double-digit annual increases of recent years.
"It's not too much of a surprise," said Sean Maher, associate economist with Moody's Economy.com. "Housing is slowing down."
Local Realtors say sellers need to bring their expectations in line with the market.
"When your house is priced higher, you don't get as many showings," said James Collins, a Realtor in the Alpine/Closter office of Coldwell Banker. "When they come down 5 to 10 percent, you start to get showings, and you'll see homes moving."
According to separate data from the New Jersey Multiple Listing Service, the median sale price for a one- to four-family home in Bergen County was $488,000 in the second quarter, a 5 percent increase over the same period last year. The price increase also was 5 percent in Passaic County, to $390,000.
By contrast, prices increased 19 percent in Passaic County from the second quarter of 2004 to the second quarter of 2005, and 15 percent in Bergen County, according to the MLS data.
Bob Clarke, an agent with Classic Realty Group in Tenafly, acknowledged that the market has slowed down, but said it appears to be stabilizing.
A recent drop in interest rates has helped, he said. The rate for a 30-year fixed mortgage, which crept up from below 6 percent in 2005 to 6.63 percent earlier this month, stood at 6.55 percent last week, according to Freddie Mac.
"Three or four months ago, there was a lot of fear," Clarke said. "Nobody wanted to buy right before the market tanked. Nobody knew where interest rates were going. People have the sense now that the market isn't going to tank. It's leveling off, and interest rates have leveled off."
But James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, said the future of the housing market remains cloudy. He said there is no certainty on interest rates, and he noted New Jersey has a relatively weak job market.
"There's still the potential to have a housing-led recession," Hughes said. "I don't think a soft landing is guaranteed."
Hughes and other economists say the condo market is particularly risky because of speculators who entered the market during the housing boom, trying to make huge profits with quick sales.
Speculators are more likely to panic and sell in a down market, Hughes said.
Nationally, the median condo price was $225,800 in the second quarter, down 0.3 percent from 12 months earlier.
In Hudson County, where luxury towers are rising along the Hudson River, the median condo and co-op price in the second quarter was $370,000, up 5 percent over the period ending June 30, 2005, according to the Hudson County Multiple Listing Service.
The condos in Bergen County sold for a median of $400,000 in the second quarter, up 3.5 percent, according to the New Jersey Multiple Listing Service. The median condo price in Passaic County was $360,000, up 8.3 percent.
New Jersey's wealth and its proximity to New York City have fueled the area's long real estate boom. But New Jersey was one of many former boom areas that saw a drop in sales volume last quarter.
New Jersey had the 10th worst drop in sales pace in the nation in the quarter. The steepest declines were in Arizona and Florida, each at about 27 percent. Low sales volume can often result in downward pressure on home values.
The greatest sales growth was in Alaska, with a 49 percent increase, and Arkansas, which was up 18 percent.
Overall, 28 states had slower sales.
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Median home prices
The days of double-digit price gains in the housing market appear over..
Q2 2005 Q1 2006 Q2 2006 %Change, Q2 05 to Q2 06
New York metro* $506,800 $521,400 $549,200 8.4%
Newark-Union** $414,400 $405,300 $443,800 7.1%
Atlantic County $244,900 $251,700 $257,300 5.1%
Central Jersey*** $394,100 $375,600 $393,600 - 0.1%
U.S. $219,400 $217,900 $227,500 3.7%
Northeast $281,500 $284,300 $299,200 6.3%
* Includes Bergen, Hudson and Passaic counties; New York City and Westchester, Rockland and Putnam counties in New York.
** Includes Essex, Hunterdon, Morris, Sussex and Union counties, and Pike County in Pennsylvania.
*** Includes Middlesex, Monmouth, Ocean and Somerset counties.
Source: National Association of Realtors
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Staff Writer Jennifer Caballero contributed to this article.
(c) 2006 Record, The; Bergen County, N.J.. Provided by ProQuest Information and Learning. All rights Reserved.
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