Not optimistic about the home buying season

From the Record:

Buyers will like spring selling season

When Iraj and Michele Hastings began searching for a house in North Jersey recently, they were happy to find a lot of choices in their price range of around $500,000.

“We saw at least 25 houses,” said Iraj Hastings, a financial analyst who works in New York. “We thought it best to take our time.” The couple recently made an offer on a 100-year-old, four-bedroom colonial in Westwood.

A couple of years ago, buyers rarely had the luxury of shopping around. Houses were snapped up almost instantly, often in bidding wars. But buyers backed off last year, and are being further squeezed now by a tightening of mortgage money and a meltdown in the subprime mortgage market.

With all this in the mix, Realtors and sellers are watching closely to see if this year’s spring selling season signals a new direction for the housing market. So far at least, several North Jersey Realtors say this spring looks like an average market — neither boom nor bust.

“We had a remarkable six or seven years. We might be going into a more typical time,” said Harry Collis of Collis Realty in Bogota. “We’re in a state of transition. Two springs ago — that was hysteria. Multiple bidding — that’s a thing of the past.”
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“I’m not optimistic about the spring home buying season,” said Celia Chen, a housing economist with Moody’s Economy.com. “Affordability still remains an issue for many people, particularly in markets that previously were hot, which would include the New York City metropolitan area. On top of that is concern about what’s going on in the subprime lending market … there are definite risks that conditions will get much worse.

David Lereah, chief economist of the National Association of Realtors, predicts that national house prices will decline 0.7 percent this year, to a median $220,300, after rising a scant 1 percent last year. He predicts price increases of 2 percent or less for next year.

Prices are down an estimated 5 percent to 10 percent from their peaks in the region, according to several real estate agents.
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Because of the drop in demand, many sellers are getting used to the idea of lower prices. Jay Noriega and Tara Voss Noriega first tried to sell their Rochelle Park Cape Cod by themselves, asking $415,000. They got a couple of low offers — including one for $330,000 — and then listed the property for $404,000 with Gold Star Realty Inc. GMAC Real Estate in Oradell.

“I’m asking a little bit less than what the peak price was, and I feel we can get it,” said Voss Noriega, whose family is moving to Point Pleasant.

Marie Nevard recently sold her Pompton Lakes town house for a bit less than the listing price of $359,000, after about five months on the market. Nevard, an accountant who is moving to New England, figures she could have gotten a higher price a couple of years ago. But she is philosophical about the housing cycle.

“You can’t put your life on hold based on high points and low points in the real estate market,” she said.