From the Asbury Park Press:
Homeowners who had been using the rising equity in their homes as the foundation for building wealth couldn’t be too happy with the new quarterly report on home prices in the Shore area.
The median selling price for homes in the region that includes Monmouth and Ocean counties fell 4.2 percent in the fourth quarter of last year, according to the National Association of Realtors. That’s the biggest dropoff since 1991.
The numbers shouldn’t have come as any great surprise. The softening of the market had been apparent for months — a fact underscored by the epidemic of “For Sale” spreading throughout many neighborhoods in New Jersey. Many of those signs have faded with age.
Fourth-quarter numbers compiled by the Otteau Valuation Group for Monmouth and Ocean counties were even worse than those provided by the Realtors association. In Monmouth County, the median price of a home fell 7 percent, from $445,000 to $416,750. The median home price dipped 6 percent in Ocean County, from $340,000 to $320,000.
Has the market bottomed out? Most analysts believe the worst is over, even though the unsold inventory of homes remains high. The lower prices should help reduce that inventory, with home prices — and homeowner equity — increasing again early next year.
“The positive may well be that people are finally reducing the prices in order to sell their homes, and ultimately that’s going to set the stage for renewed expansion in housing,” said economist James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.
For some, particularly those considering cashing out their homes and heading to more affordable parts of the country, waiting until 2008 for the return of a seller’s market may seem a long way off. They may have to seek consolation in rising stock prices, which have gained nearly 20 percent in value in the past seven months, and keep their fingers crossed that the stock market doesn’t suffer the same fate as the recent housing market.