From the Record:
Mounting economic woes worsened conditions in North Jersey’s stumbling housing market at the end of 2008, sending prices down another 8 percent and the number of sales down to levels not seen in nearly 20 years.
Amid a deepening recession and a banking crisis that squeezed the flow of mortgage money, the median price for a single-family home in Bergen and Passaic counties slipped to $390,000 in the fourth quarter, from $425,000 in the same period of 2007.
The drop marked the biggest year-over-year decline in the two-county region since the market began to stall in 2007.
The economic problems followed a yearlong buyer-seller standoff that staved off major price erosion as sellers held out for peak prices and refused buyers’ attempts to negotiate downward. But with economic conditions declining in late 2008, price drops accelerated and the market cooled so much that fewer than 2,000 homes sold in the two counties from October through December.
“It was bad as I’ve seen it in my 33 years in the business,” said Richard Stabile, president of ReMax Real Estate Associates in Woodcliff Lake. “It was the perfect storm for real estate.”
As Marlyn Friedberg of Friedberg Properties in northeast Bergen County said: “The market died. People went into hiding.”
An analysis by The Record of data obtained from county and state agencies found that:
* The median price for single-family homes in Bergen County sank from $455,000 in the fourth quarter of 2007 to $425,000 in the fourth quarter of 2008. In Passaic County, the decline was steeper, from a median of $370,000 to $335,000.
* Since the all-time peaks of $495,000 in Bergen County and $390,000 in Passaic County, medians in the two counties both are down 14 percent. While substantial, those drops are nowhere near the dips of 30 percent or more felt in other parts of the country.
* An estimated 1,600 to 1,700 homes sold in Bergen and Passaic counties from October through December. That is down nearly two-thirds since the all-time fourth-quarter high of 4,713 in 2004 and the first time since 1990 that fewer than 2,000 homes sold in any fourth-quarter period. The Record used past years’ trends to reach this estimate; the available data did not include all sales through the end of 2008 because of a lag in deed recordings.
* The downturn not only cut into potential profits for people who bought before the real estate boom of the 2000s, but it forced losses onto sellers who bought when prices were at their highest. Among the 185 homes that sold during the peak of the real estate boom and sold again in 2008, two-thirds lost value.
In many towns, sales were so few that median prices could not be meaningfully calculated. But among towns with at least 30 sales in the quarter, the combination of economic forces hit hardest in such places as Clifton, Fort Lee and Ridgewood, where prices were down 20 percent to 24 percent from their peaks.
At the other end of the scale, medians in Paramus, Ringwood and West Milford were off less than 10 percent.
Jeffrey Otteau, an East Brunswick appraiser who tracks the market statewide, predicted a 9 percent total drop in New Jersey prices in 2009.