From the Daily Record:
The average price of a home in Morris County dipped back below a half million dollars in the first half of the year, according to a new data analysis that found the Morris housing market faring slightly worse than the rest of New Jersey.
A Gannett New Jersey analysis of state Department of Treasury sales data shows that for the first half of 2008, the average Morris home sold for about $492,000, almost 7 percent below the sale price for the first six months of 2007. That compares with a statewide decline of nearly 5 percent in the average sale price, to about $370,000.
At the same time, the number of homes sold in Morris dropped by nearly 44 percent to 2,034, compared with a 43 percent statewide plunge.
The analysis underscores the fact that Morris, which tends to fare better than New Jersey on most measures, has been hard hit by the downturns in the economy in general and in the real estate market in particular.
“Morris County is going to be somewhat more vulnerable to the restructuring of Wall Street,” said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “People also could have overextended themselves.”
Sima Wolf, owner of Exit Realty Gold Service in Mountain Lakes, said, “We are definitely seeing a lot of short sales.” She estimated that nearly half of the sales they see involve a home being sold for less than the amount left on its mortgage.
“It used to be more prevalent in other areas of the state, but now we’re seeing more of it in Morris County,” Wolf added.
Foreclosures are up, as well. The number of properties in foreclosure in the first two-thirds of 2008 already surpassed the 2007 total. Through August, 323 properties had defaulted on their mortgages, according to the Morris County Sheriff’s Office, compared with 316 in all of 2007. And during the first eight months of 2008, the sheriff’s office had sold 179 properties, 43 more than in all of 2007.
Hughes and others cautioned that the analysis may not be the best indicator of the housing market because it does not compare sales of specific types of homes – for example, new construction, condominiums or single-family houses – nor does it take into account specific local factors affecting the market.
Still, its overall conclusion – that the housing market is down – is accurate.
“Clearly, the trend is down,” said Hughes, citing another study that showed prices down 17 percent over the last year when comparing specific types of houses to one another.
Jeffrey Fellers, manager of Coldwell Banker Residential Broker in Madison, said: “We are definitely off from the high of 2006. In October, it was as if the phones were shut off.”
According to the Gannett analysis, the largest sale price drop was registered in Mendham Township, one of two municipalities where the average home sold for more than $1 million in the first half of 2007. The average Mendham Township home price dropped by nearly $335,000, to about $860,000.
Hughes said prices could continue to fall for another year or more before slowly rebounding.
“I don’t think there’s going to be a quick resolution to this,” he said.
It took four years to recover from the last housing crash, in 1988, according to Hughes. If that pattern holds true, it’s unlikely that home prices will start back up until 2010.
“The turnaround is likely to be very slow,” Hughes said. “It may be 2016 before home prices match the highs of 2006.”