From the Record:
North Jersey home values dropped 3 percent in the first half of this year, bringing Bergen County’s median single-family home price below $400,000 for the first time since the housing meltdown began five years ago, an analysis by The Record has found.
The analysis also found that prices did not move in lock step across Bergen and Passaic counties; values fell furthest in lower-priced communities hard-hit by rising foreclosures and the troubled economy. More affluent housing markets held their value better. Some even rose.
Rick Del Guercio, a Glen Rock appraiser, said his experience bears out The Record’s findings.
Hard hit at the bottom
Prices generally dropped most at the low end of the North Jersey housing market, but held their own at the high end.
The analysis for this article and accompanying graphics used traditional “arms-length” sales that reflect market values as well as sales of properties at various stages of a foreclosure or estate liquidation process. Sales of distressed properties were included because they represent a significant part of the housing market and reflect the true value of homes in many communities, according to real estate experts.
“You see a greater drop in some of these lower-end towns than in some of the higher-end towns,” he said. “The lower end is being flooded by foreclosures, which is obviously dropping the price for everyone.”
“Locations where the distressed property percentage is high are having huge problems, while other areas are stabilizing,” said Barbara Weismann, a real estate agent with Weichert Realtors in Tenafly.
The Record’s analysis also found that the number of home sales in the two counties plummeted 25 percent from the first half of 2010 to the first half of 2011, though that probably reflected the fact that sales were artificially inflated in early 2010 by the $8,000 federal tax credit for buyers.
The number of homes sold decreased from about 3,600 to 2,800 in Bergen and from 1,450 to 1,000 in Passaic. The latest numbers are down by about two-thirds from the highest levels seen during the housing boom.
As painful as it is to see housing wealth disappear, “most sellers at this point have adjusted to the new pricing realities,” said Beth Freed of Prominent Properties Sotheby’s International Realty in Ridgewood.
But rather than accept lower prices for their homes, many are simply delaying plans to sell, if they can.
“I think most of the people who are selling right now are doing so because they have to, either because of job loss or divorce,” said Jaime Bolnick, a Re/Max agent in Franklin Lakes.
“Buyers are seeing incredible savings in comparison to just a couple of years ago,” said John Reilly of Century 21 Van Der Wende Associates in Little Falls, who says prices have returned to 2003 levels in many towns.
“A lot of buyers are hesitant to commit even if it’s priced fair or below market,” said David Hsu, an agent with Abbott and Caserta Realtors in Ho-Ho-Kus.
That smaller pool of buyers translates into lower demand, which in turn, means lower prices.
Carmelo “Mel” Oliveri of Property Hub Realtors in Paramus predicts that prices will continue to drop because of the large number of foreclosures and short sales expected to come on the market over the next couple of years.
Sheldon Neal, a Re/Max agent in Oradell, agreed.
“The ones who benefit will be first-time buyers,” Neal said.
But, Hsu warned, they should resist the temptation to treat a home as “an investment vehicle.”
“Those days are over for a while,” he said.