From the Central Jersey Register News:

Expert: Housing woes may last through late ‘09

The local housing market has followed its expected downward course this year, and predictions it would begin to recover about this time have proved overly optimistic.

Many in the industry agree that prices are approaching or have already hit rock bottom, but there is some dissent on how much things will worsen before they improve.

Between the second quarter of 2007 and the same period this year, existing single-family home prices dropped just over 3 percent statewide, and sales dropped 18.53 percent, according to the New Jersey Association of Realtors’ Home Sales Report. Figures for the second quarter of 2008 were released this week and are preliminary.

Locally, prices throughout Burlington County dropped just over 4 percent since this time last year, and sales went down 15 percent.
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“I guess it’s déjà vu from 2007,” said Bill Dressel, executive director of the New Jersey State League of Municipalities. “The housing market and development in general as it relates to the public/private sector partnership has gone south.”
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“We are fighting our way through a recessionary period as it relates to low housing starts and just a dismal financial picture as it relates to the business community overall,” he said.

Joseph Seneca, professor at Rutgers Edward J. Bloustein School of Planning and Public Policy said there were some encouraging signs in the New Jersey real estate market, including a statewide increase in home sales in recent months, a fairly constant level of unsold inventory, and a slow decrease in prices, which he said probably helps the market.

But he emphasized the starker picture for the national economy, which he said has a large impact on the state. Rises in mortgage prices, credit standards and the large, if fairly stable, inventory of unsold houses are all national issues. So are the financial problems of large institutions, which he said have “no end in sight.”

“There are lots of foreclosures continuing nationally, and that adds more inventory to the market,” Dr. Seneca said. “House prices continue to fall, creating negative conditions for equity for homeowners.

“Foreclosures will continue to rise, and a good amount of the sales we’ve seen, particularly of existing homes, are fire sales of foreclosed homes being conducted by banks. So the housing market remains on a downward trajectory and prices are likely to continue to erode into 2009, nationally and in New Jersey.”
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Experts generally agreed that the market is attractive for buyers with good credit who did not buy a house recently. “If you have equity in your home and we can price your house to sell, we can sell your home,” said Jeanne Roveda, broker/president of Century 21 B&R Realty in Upper Freehold. “Have prices adjusted? Yes, they obviously have. If you bought your house in 2005, 2006 or 2007, you may not be able to get what you paid for it.”

“We’re actually at a much slower market than 12 months ago,” said Donna Reichert, one of the owners of Coldwell Banker Winzinger Reichert and Associates on Route 130 in Bordentown. She estimated prices had fallen 20 percent in the area.

She added that things have picked up in recent weeks, “but people have to be realistic to expect what to sell their house for.”
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Dr. Seneca’s forecast was slightly bleaker than those expressed by real estate agents. He said that others’ previous predictions of an economic turnaround in the second half of this year has been “postponed,” possibly to the last six months of 2009.

“And a big reason for that is the housing market hasn’t recovered, and with these negative factors,” he said, “the near-term outlook is for further weakness.

“I think there’s more correction in prices to come because of the very large inventory on the market and the still-increasing number of foreclosures putting more supply on the market, both nationally and in New Jersey,” Dr. Seneca said.