Still hoping for a quick recovery

From the New York Times:

It’s Spring. Somebody Tell the Buyers.

IT’S spring, the traditional time for hope and growth in residential real estate sales. But beyond the borders of New York City, there are indications that a wintry chill besets the market in much of the region.

On Long Island and in Connecticut, brokers report the inventory of unsold homes continues to build, while the number of buyers is reduced by new lending restrictions.

In New Jersey, the market seems to have slowed from March to April — just when things would ordinarily be revving up. The number of sales contracts signed in April declined in 20 of 22 counties monitored by the Otteau Valuation Group, which does market analysis for brokers. Even in Hudson County, which encompasses such sought-after riverfront towns as Hoboken and Jersey City, sales volume declined 21 percent.

Next month, units at one newly built high-end condominium building in Hoboken will be put up for auction. Forty of 128 units at the complex, Velocity, which will have 24-hour concierge service, are to be offered at base prices set well below the cost of construction, according to Erik Kaiser, chief executive of the REMI Companies, the developer.
…
Next door in Jersey City, where numerous condominium projects are under way, 16 percent fewer sales contracts were signed last month than the month before, according to the Otteau Group.

Jeffrey G. Otteau, president of the company that bears his name, analyzes numbers of signed contracts rather than closed sales, as most multiple listing services do, because they present a more timely read on market conditions. The April statistics are the latest available, he said, and are being provided this week to agents who subscribe to his service.

Many brokers in New Jersey, as elsewhere in the region, continue to speak of the market as having bottomed out and moving into recovery. In Westchester County, sales are up, asserted P. Gilbert Mercurio, of the County Board of Realtors. There were 4 percent more closed sales in the six-week period April 1 through May 17 compared with the year before, Mr. Mercurio said.

But Mr. Otteau suggested that such reports might possibly lag behind reality. He said that he, too, had predicted market recovery in New Jersey by now — and that he had been somewhat surprised by the further weakening in April. Given the definitiveness of the statistics, however, and the likely reasons behind them, Mr. Otteau said he thought the same scenario probably held true around the region.

“I would say there are two things affecting the market negatively right now,” he summarized: “tightening lending standards as a result of problems with the subprime market, and fear that the problems will spill over and affect the market as a whole.”