North Jersey High End Feels Pain

It seems like the NY Times is jumping on the Lowball! bandwagon. The weakness in high-end properties should be obvious to readers now. There are no shortage of million dollar homes in each edition of Price Reduced! and Lowball!

From the NY Times this weekend, registration required:

A Relative Glut of Million-Dollar Homes

GOOD news for wealthy people who want to buy very expensive homes in New Jersey: Top realtors in exclusive areas report that the supply of homes priced over $1 million is up – in some cases way up – and homes are taking longer to sell, resulting in some serious deal making.

“There are some very high-priced homes selling, and they are selling for incredible deals,” said Jacelyn Botti, president of Weichert Realtors.

Until recently, Mrs. Botti said, the average home sold by Weichert – the state’s largest real estate agency – had been selling for 98 or 99 percent of its asking price. But starting some time in June, brokers began to see some high-end houses sell for significantly less than the asking price.

In Mendham, for instance, the house at 7 Charolaix Farm Road, listed for $12.76 million, sold for $9 million – 71 percent of the asking price – after more than a year on the market. (The highest-priced homes traditionally take a longer time to sell, Mrs. Botti noted, but a year is “quite” long.)

In Bernardsville, the estate of John Dryden, the founder of Prudential Insurance, at 450 Claremont Road, listed for $12 million, sold for $7.4 million – 62 percent of the asking price – after 546 days.

“This has been escalating very quickly since August,” Mrs. Botti said. In June and July, there was an overall “listing supply” of two to three months, meaning there were enough houses on the market to supply all those looking to buy within that time frame. In September, the listing supply had grown to five or six months, and now, Mrs. Botti said, it is 8 to 10 months statewide.

…

Jeffrey G. Otteau, whose Otteau Appraisal Group, based in New Brunswick, provides real estate brokers with statistics and analysis of the residential market based on its own research, said that in New Jersey the number of highly paid jobs is not growing and that this is negatively affecting the high end of the real estate market.

From mid-2002 to mid-2005, the state gained 104,000 jobs, Mr. Otteau said. But for the three highest-paying categories – information providers, financial services, professional and business services – there was zero increase in the number of jobs.

Caveat Emptor!
Grim

Thanks to chaoticchild for bringing this article to our attention.