From the Record:
Home sales and prices are beginning to rebound in North Jersey, but what effect that will have on the still-sluggish higher end of the market – which slumped the most in 2012 – remains to be seen.
Prices of single-family homes in Bergen County rose 5.9 percent for the first five months of this year, to a median $413,000, while prices in Passaic County rose less than 1 percent, according to multiple listing services in both counties.
That’s a marked improvement from 2012, when, according to an analysis by The Record, home prices dropped 1.3 percent in Bergen and 1.7 percent in Passaic. Prices of homes $700,000 and up in Bergen and Passaic — stung by the loss of thousands of high-paying jobs that vanished in the recession — fared much worse, dropping 6.6 percent, the analysis shows.
Although the listings services don’t break the 2013 sales down by prices, evidence that the overall market is gaining is potentially good news for sellers in towns like Demarest, Old Tappan and Saddle River, which suffered double-digit price declines last year, according to The Record’s analysis. As home values firm up in the middle of the market, more households may find they have the equity to trade up and boost values in those towns.
For now, however, “The upper end is still sluggish,” said Robert Abbott of Abbott & Caserta Realtors in Ho-Ho-Kus.
Patricia Nichols, a fashion industry executive, has seen it firsthand.
Looking to downsize after her daughter left for college, she sold her five-bedroom Upper Saddle River colonial in 2012 for $780,000 — about 22 percent less than her original asking price in 2010.
“Would I have liked to have gotten more? Of course,” said Nichols, who moved to a town house. “But it was almost a two-year process. At some point, you have to cut your losses.”
Part of the problem is fewer buyers. From 2006 to 2011, the North Jersey economy lost 10 percent of the jobs in industries where the average salary is at least $80,000, according to an analysis of jobs data by The Record. One example: The number of finance jobs in New Jersey — about 249,000 — is down by about 11.5 percent from 2005.
“The labor markets have fewer top-end salaries than they did before,” said Jeffrey Otteau, an East Brunswick appraiser who tracks the housing market statewide.
In addition, fewer households can trade up to luxury homes, because their current homes haven’t been gaining value.
“Demand for high-priced houses depends on appreciation and equity buildup in the middle-priced houses,” Otteau said. “That has not occurred.”