From the NYT:
THE fall real estate season is under way, and the school of hard realities is in session.
“The sales data is telling us nothing good,” said the market analyst Jeffrey G. Otteau. “Going into the end of the year, the trends are overwhelmingly negative in New Jersey: lagging home sales, declining prices, an inventory buildup — and everything in place to indicate the foreclosure rate will continue to rise.”
Mr. Otteau is the president of the Otteau Valuation Group, which collects contract sales data in 21 counties.
The August report showed a severe three-month-long dip in sales pace over the previous year, occurring in what has traditionally been the strong spring-to-summer period. “Now we are in the throes of fall,” he said, “when sales are always slower, and the general doldrums just grow more intense.”
Mr. Otteau said he remained loyal to the real estate maxim that local market situations differed.
But based on the “truths inherent in the data,” he predicted, no county, community or neighborhood in New Jersey would be unaffected by the overall market’s downward slump heading into 2011.
“Sales will remain sluggish, and home prices will go through a second round of declines, across the board in the state,” he said. “What will vary by market is the degree, the magnitude and depth of the weakening.”
In the August report, Mr. Otteau described the May-June-July period after the expiration of the federal home-buyer tax-credit program as “the weakest in six years — making it clear that the housing market is unable to sustain itself without additional stimulus.”
But, he added, “What is so troubling about the picture here in New Jersey is that housing trends tend to be a leading indicator of what will happen in the overall economy.”
Because “this recent relapse in the housing market follows 11 consecutive months of rising home sales,” which had the effect of helping stimulate other economic activity and employment, Mr. Otteau predicted that “going forward, if the housing market continues to lag, the reverse pattern can be expected.”
“Due to the close relationship between unemployment, home prices and mortgage delinquency,” he said, “foreclosure rates would rise further later this year.”