From the Asbury Park Press:
After years on rise, home prices at Shore ebb
Posted by the Asbury Park Press on 05/16/07
BY MICHAEL L. DIAMOND
The median home price in central New Jersey fell 3.4 percent during the first quarter, the National Association of Realtors said Tuesday in a report that showed the Shore remains mired in a real estate slump.
The median price of $363,500 was down from $376,400 the same quarter a year ago, the association reported, and the decline wasn’t a surprise to sellers such as Jamie Baker, who has lowered the price of her Bradley Beach house three times in the past year — with little luck so far.
“I keep hearing, “If you sold it three or four years ago, you would have sold it right away,’ ” said Baker, 33.
The figures show the housing market for the region that includes Monmouth, Ocean, Middlesex and Somerset counties fared worse than the rest of New Jersey and the nation. For example, the median price in southern New Jersey and Philadelphia rose 1.3 percent. The median price nationwide fell 1.8 percent, the association said.
Jeffrey Otteau, president of the Otteau Valuation Group, a real estate consulting business in East Brunswick, said the region’s decline stood to reason, because the rise in home prices during the first half of the decade far outstripped consumers’ ability to keep up with them.
The latest statistics indicate “that the housing market is still unwinding, particularly in markets like New Jersey, where the run-up in prices was significantly above the national increase,” said Joseph J. Seneca, an economist and professor at the Edward J. Bloustein School of Planning and Public Policy at Rutgers University.
Seneca said the residential real estate market soared during the first part of the decade, thanks to both record-low interest rates that kept monthly mortgage payments manageable and unconventional mortgages that helped consumers with poor credit histories buy homes.
But wages didn’t keep pace. From the first quarter of 2000 to the first quarter of 2006, the median New Jersey home price rose 101 percent. From 2000 to 2005, the median New Jersey household income rose 8.6 percent, Seneca said.
Once mortgage rates ticked up even a little, workers in their 20s or 30s making an average wage in New Jersey couldn’t afford to buy their first homes.
“When the first-time home buyer is priced out of the market, then that echoes through the rest of the market,” Seneca said.
Seneca said he didn’t expect the real estate downturn to create a recession, but it already has spelled financial trouble for a variety of people and businesses, including home builders, banks and consumers.
When the first-time home buyer is priced out of the market, then that echoes through the rest of the market,” Seneca said.
Seneca said he didn’t expect the real estate downturn to create a recession, but it already has spelled financial trouble for a variety of people and businesses, including home builders, banks and consumers.
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These are the idiots who overpaid 80-100% in the lehigh valley and now are being foreclosed on. These fools took out the subprime & arm loans decided to drive 3-5 hours a day and commute from around Allentown. What a jaskass move, now people are watching as their McMansions lose equituity. They threw up cookie-cutters on former swamp land and sold them like mad. There are nice houses sitting on the market for over a year here.
Look the the lehigh county multiple listing service and compare it with the lehigh county deeds website. 90% of the home on there all have been purchased during this housing bubble. The rental market is worse than houses, these people are 30 to 60 days from foreclosure.
It’s getting ugly and the morning call (local bias paper) won’t report on the truth. When Lehigh & Northampton counties foreclosure rates went up 25% last year, no report, this year they are up almost 40% and no report. That’s a joke, I mean their mouths have to be sore, sucking off all the realtors and contractors around here for ad’s.
It’s starting in the outlying areas like PA and the shore and will gradually work its way towards the city. NY commute towns will be the last in the country to really go down.
I’m at the shore in Monmouth County, and can confirm the slump. Neighbor’s had his house on market for a year with no sale. Despite concerted marketing from all local realtors, which sponsored a town-wide open house weekend, nothing is selling. Prices are way, way, way too high, imho, though it’s unlikely any reductions will be made until after Labor Day.
i’m in the far western part of monmouth county -near allentown. i can tell you we spiffed up our house — and set what we thought was a realistic price, given the housing slump. (even other realtors agreed the house was fairly priced.) it sat on the market for about six weeks, and we got ONE offer. we ended up selling for a LOT less than we wanted…but we didn’t have the option of sitting around and waiting for prices to rise. on the other hand — i purchased a home in the northwest part of NJ — and paid proportionately less. while it looks like every seller’s taking a hit — i think a certain market range is more vulnerable. most first-time buyers (with decent credit) can readily find their $250-$300K house — and those homes are moving, albeit slowly. but when you’re selling something that’s priced over, say, $450K — it’ll take QUITE a while. part of the problem: a glut of new construction that builders cranked out right before the market chilled. our home sits down the road from a brand-spanking-new development. much of that inventory still hasn’t moved. buyers can pick and choose and cut some nice deals. no buyer pays full price, anymore. often, their offers are insultingly low — even with the slump factored in.
good luck to anyone out there who’s selling.
we haven’t closed yet — by the way. and it ain’t over til the moving guys drop your sofa and break a tile in the living room…at your new address.
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