From the Record:

Skyrocketing prices come back to earth

John and Susan Scerbo put their five-bedroom Ramsey house on the market more than a year ago, expecting to sell within a few months.

But the house is still for sale, even after the couple cut the asking price from $695,000 to $649,000.

“We got caught in a tough market,” said John Scerbo, a financial consultant. “Buyers are slow to act, and there’s enough inventory out there that they can take their time looking.”

As the Scerbos have discovered, the overheated 1999-2005 housing market cooled quickly in 2006.

And real estate experts expect property prices and sales to remain slow in 2007, both nationally and in northern New Jersey.

“A lot happened during the boom, and we have some paying back to do yet,” said David Seiders, chief economist with the National Association of Realtors.

Or, in the words of Oradell Realtor Margrit Vogler: “We had a very good run, we saw beautiful price appreciation, but how could it continue like that? If it did, a little Cape Cod would cost a million dollars. Who’s going to buy that?”

In North Jersey, house prices are expected to be flat or down slightly — around 3 percent or less — in 2007. But even with the downturn in prices and sales volume, 2007 is likely to be a historically solid year — just not as over-the-top as the record-breaking years we’ve seen recently, both nationally and in New Jersey.
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Although the National Association of Realtors has not yet produced its final price data for 2006, Karl Kern of Kern & Rogers Realty Inc. in Wyckoff and Mark DeLuca of Mark DeLuca Realtors in Teaneck both say prices in the Bergen County area dropped about 5 percent in 2006. Both said another drop of 3 percent or so is possible in ‘07.

“Inventory is still very high, and inventory puts a whammy on prices,” said Kern.

Tough as the softer prices may be on sellers, they come as welcome news for buyers.
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Walters predicts that prices will remain soft for 2007 and 2008. Kern has a similar view. After 2007, Kern predicts the housing bear market will become an “inchworm” market, with prices inching forward slowly.

“I think it’s the nature of the cycle of real estate that we’re not going to have a boom again for a long time,” Kern said.