From the Record:
The number of single-family homes sold in Bergen and Passaic counties is running about 10 percent below last year’s rate — a sign that the real estate market still has a way to go before it fully recovers from the worst downturn since World War II.
At the same time, prices for single-family homes have risen this year, according to the New Jersey Association of Realtors. Through July, median prices for single-family homes are up 3.4 percent in Bergen and 1.7 percent in Passaic over the same period last year, NJAR says.
The slower pace of sales in North Jersey reflects a similar trend nationwide. U.S. existing home sales in July were 4.3 percent below last year’s rate.
Mortgage rates are still in the 4 percent range, which might be expected to boost home sales. But the pace of sales has slackened for a number of reasons, including this year’s harsh winter weather, flat incomes, tight mortgage standards, lower inventory and rising home values, which have priced many would-be buyers out of the market.
“Median family incomes are still lagging behind price gains,” Lawrence Yun, chief economist for the National Association of Realtors, said recently. He warned that homes are likely to become less affordable in the years ahead, since the Federal Reserve has signaled that interest rates will rise in 2015.
Through July, there were 3,964 closed sales in Bergen County and 1,820 closed sales in Passaic, both down about 10 percent from the first seven months of 2013.
The year got off to a slow start with snowstorms that kept sellers and buyers out of the market. “Sellers didn’t want to put their houses on the market with 4 feet of snow around them,” said Dawn Cox, a Weichert agent in Wayne.
“Our spring market was very short,” agreed Robert Abbott of Abbott & Caserta Realtors in Ho-Ho-Kus.
Another reason buyers haven’t been purchasing homes: There’s not a lot of inventory out there. Homeowners are reluctant to list their homes, in many cases because they still owe more on their mortgages than the properties are worth.
Home inventories in July were down about 6 percent in Bergen County compared with a year earlier, at about 4,500 homes, and about 3 percent in Passaic County, at about 3,050 homes.
“Unsold inventory remains low, limiting choices for home buyers,” said Jeffrey Otteau, an East Brunswick appraiser who tracks the state housing market.
With the real estate market entering the traditionally slow fall season, it’s unlikely that the downward trend will turn around. Fannie Mae, the mortgage finance firm, recently downgraded its 2014 sales outlook.