From the WSJ:
The housing market is improving across the nation, but the New York metro area is lagging behind.
According to the closely watched S&P/Case-Shiller home price index, which was released Tuesday, prices in the largest 20 metro areas were up a seasonally adjusted 0.9% in May from April and were down 0.7% when compared with May a year ago. But in the New York metro area, prices are recovering far more slowly, up just 0.6% in May from April and down 2.8% from a year ago.
Economists say cities and towns in New York and New Jersey are experiencing an uneven recovery where affluent areas are generally improving while working-class communities remain in distress. The New York area is “still suffering a bit from what happened during the financial collapse,” says Maureen Maitland, vice president of S&P Indices. “There was a lot of job loss for people in financial services in the area, and that hasn’t come back.”
The market is especially troubled in New Jersey. Data compiled for The Wall Street Journal by Zillow.com shows that of the 25 cities in the metro area with the biggest year-over-year price declines as of June, nearly 70% are in New Jersey.
Three of the four largest declines were in New Jersey, with Roselle, down 12.5%; Plainfield, down 10.5%; and Union Township, down 10.3%. All three towns have been grappling with job losses. In the past few months, prices improved across the state but it isn’t clear whether the trend will continue.
“It’s urban and rural markets where home prices are the worst,” says Jeffrey Otteau, president of Otteau Valuation Group, a New Jersey-based analysis firm. “That’s where the greatest number of subprime loans originated, where unemployment is highest.”
Even in some affluent New Jersey towns with stable prices and just a handful of foreclosures, appraisers are being exceptionally conservative when placing values on properties. “Appraisers cannot ignore distressed sales as possible comparable sales,” says Ken Chitester, a spokesman for the Appraisal Institute, an industry trade group.