“It may be 2016 before home prices match the highs of 2006.”

From the Daily Record:

Home prices drop 7% in Morris

The average price of a home in Morris County dipped back below a half million dollars in the first half of the year, according to a new data analysis that found the Morris housing market faring slightly worse than the rest of New Jersey.

A Gannett New Jersey analysis of state Department of Treasury sales data shows that for the first half of 2008, the average Morris home sold for about $492,000, almost 7 percent below the sale price for the first six months of 2007. That compares with a statewide decline of nearly 5 percent in the average sale price, to about $370,000.

At the same time, the number of homes sold in Morris dropped by nearly 44 percent to 2,034, compared with a 43 percent statewide plunge.

The analysis underscores the fact that Morris, which tends to fare better than New Jersey on most measures, has been hard hit by the downturns in the economy in general and in the real estate market in particular.

“Morris County is going to be somewhat more vulnerable to the restructuring of Wall Street,” said James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “People also could have overextended themselves.”

Sima Wolf, owner of Exit Realty Gold Service in Mountain Lakes, said, “We are definitely seeing a lot of short sales.” She estimated that nearly half of the sales they see involve a home being sold for less than the amount left on its mortgage.

“It used to be more prevalent in other areas of the state, but now we’re seeing more of it in Morris County,” Wolf added.

Foreclosures are up, as well. The number of properties in foreclosure in the first two-thirds of 2008 already surpassed the 2007 total. Through August, 323 properties had defaulted on their mortgages, according to the Morris County Sheriff’s Office, compared with 316 in all of 2007. And during the first eight months of 2008, the sheriff’s office had sold 179 properties, 43 more than in all of 2007.

Hughes and others cautioned that the analysis may not be the best indicator of the housing market because it does not compare sales of specific types of homes – for example, new construction, condominiums or single-family houses – nor does it take into account specific local factors affecting the market.

Still, its overall conclusion – that the housing market is down – is accurate.

“Clearly, the trend is down,” said Hughes, citing another study that showed prices down 17 percent over the last year when comparing specific types of houses to one another.

Jeffrey Fellers, manager of Coldwell Banker Residential Broker in Madison, said: “We are definitely off from the high of 2006. In October, it was as if the phones were shut off.”

According to the Gannett analysis, the largest sale price drop was registered in Mendham Township, one of two municipalities where the average home sold for more than $1 million in the first half of 2007. The average Mendham Township home price dropped by nearly $335,000, to about $860,000.

Hughes said prices could continue to fall for another year or more before slowly rebounding.

“I don’t think there’s going to be a quick resolution to this,” he said.

It took four years to recover from the last housing crash, in 1988, according to Hughes. If that pattern holds true, it’s unlikely that home prices will start back up until 2010.

“The turnaround is likely to be very slow,” Hughes said. “It may be 2016 before home prices match the highs of 2006.”

This entry was posted in Economics, Housing Bubble, New Jersey Real Estate. Bookmark the permalink.

70 Responses to “It may be 2016 before home prices match the highs of 2006.”

  1. grim says:

    Down goes Morris

  2. grim says:

    Big price chop in a high-end Morris County town, courtesy of Gator.

    132 Ormont Road
    Purchased: 9/14/2005
    Purchase Price: $890,000

    Relisted: 11/23/2008
    Current asking price: $775,000
    13% under 2005 purchase price

  3. grim says:

    From Reuters:

    US holiday sales view still weak after weekend rush

    U.S. consumers sought bargains on toys, clothes and electronics as holiday shopping kicked off this weekend, but an early rush to stores was slower this year and was not likely to change a weak outlook for the season, analysts said on Sunday.

    Early results from the Black Friday weekend, which begins one day after U.S. Thanksgiving, showed that sales grew both in stores and online.

    Sales on Black Friday, which once marked the day retailers would turn a profit for the year, rose 3 percent to $10.6 billion, according to tracking firm ShopperTrak. That was slower than an 8.3 percent rise in 2007.

    Online sales for that day rose 1 percent to $534 million, web tracking firm comScore said on Sunday.

    “I don’t believe that up 3 percent on Black Friday means we can look forward to up 3 percent for the rest of the season,” said Michael Unger, principal in the retail practice at Archstone Consulting. “I think we’ll see a lot of aggressive discounting in the last two weeks.”

    Hastings still expects total retail sales over the holiday period of November, December and January to fall 6 percent to 8 percent from last year. That would mark the first contraction in holiday spending since the National Retail Federation began tracking such sales in 1992.

  4. bi says:

    very soon, you will lose all your shirts if you keep putting money on it.

    “Mike Morgan – I’m not sure I have to expand on this. I am writing this early morning on Black Friday. Our research and mystery shopping notes, point to the worst Black Friday since TGD. “

  5. grim says:

    My own worthless anecdote?

    My local Costco was empty this afternoon, no lines at the register. In and out in a few minutes, not typical for a Sunday.

  6. Frank says:

    In Hoboken this week, 8 2BRs sold in an average of 66 days at an average sale price of $538,375, most of them at or above asking.

    You call this a recession?? Can I have 3 of them?


  7. grim says:

    All about the comps Frank..

    841 Willow
    Listed $399k, Sold $400k

    3/3/2007 – $454k
    3/13/2008 – $424k

    409 4th Street
    Listed $459k, Sold $450k

    11/21/2007 – $518k
    9/1/2007 – $498k

  8. grim says:

    705 Adams
    Listed $599k, Sold $520k

    Prior sales, not sure if its a comp, but the unit size is the same.

    4/28/2006 – $795k

  9. Frank says:

    These condos are worth no more than $300K based on current rents. The fact that they are selling for $500K+ shows you that there’s no recession and people are willing to pay more than it costs to rent them.

  10. crossroads says:

    Hughes said prices could continue to fall for another year or more before slowly rebounding

    Is Hughes taking into consideration the alt-a and option arm resets that will begin 2010-2011

    do we know how nj will be effected?

  11. Frank says:

    Alt-a arm resets will actually help the market because rates will reset lower. Option arms are lost cause, the bonds trade in the 30s, most of these people are going to foreclose anyway you look at it.

  12. jamil says:

    Cindy: From previous thread about why Citi sent the letter to everybody (instead of just risky users). Community organizers are now in charge..

    LA Times (“Civil rights complaint targets Wall Street rating firms”)

    “In what is apparently the first legal action of its kind, an association of community-based organizations has filed a federal civil rights complaint against two of the three largest Wall Street rating firms, charging that their inflated ratings on subprime mortgage bonds disproportionately caused financial harm to African American and Latino home buyers across the country.”

    I expect similar frivolous lawsuits in other areas to follow.

  13. crossroads says:

    your sure alt-a arms will reset lower? its only 08 are the rates in for 2010?

  14. bi says:

    clot/stu, hold you laugh for 60 days. we should check it back soon after O takes the office.

    Mike Morgan’s latest:

    “MARKETS -Very briefly, I believe the Chinese markets will be hardest hit over the next 30-60 days as social unrest grows. This and other factors are also in our overall view that world markets are heading lower . . . again. Our investment approach is still 100% on the short side with the exception of a long position in Yahoo.”

  15. 3b says:

    #10 He needs to also include the length and severity of the recession.

  16. Stu says:


    I agree, I will be as critical of O as I was of W and McCane.

  17. Mikeinwaiting says:

    Gary need someone to hangout with?
    Just got let go, no severance, no 2 weeks just bye. I guess I will enjoy the winter here in Vernon!

  18. jamil says:

    Stu: Our lovely state-aligned O-media (Russia would be proud of it) has today credited O for winning the war in Iraq (NYT) and last week’s stock market gains (CBS “News”). Once he is actually in WH, he will probably cure cancer, AIDS and poverty, at least as far as O-media and O-wood are concerned.

  19. kettle1 says:


    That sucks! :(

    what field are you in

  20. Sybarite says:


    Give it a rest already. I thought this type of nonsense was over after election day.

  21. Frank says:

    I am hiring, if you qualify, please send me your resume.


  22. Cindy says:

    (14) bi – You might enjoy this – granted @ 45 minutes – a bit long but listen to the section on “Chimerica” and the symbiotic relationship that exits.

    Together 1/4 population, 1/3 of output, 1/2 carbon emissions, 2/3 global economic growth. He is not too worried about the dollar or inflation because….

    Chimerica lives – “I don’t know how your marriage works but mine works like this, I earn the money – my wife spends it.”

    Niall Ferguson’s
    Geopolitical Consequences of the Credit Crunch….It is dated – 10/22 but very informative.


  23. Sean says:

    In Summit, Westfield, New Providence and Scotch Plains, the average homeowner is now looking at an annual property tax bill in excess of $10,000.


  24. Cindy says:

    He also gives 6 reasons not to despair…He says it is financially possible to weather a deficit of 75% of GDP. I believe he said Japan was at 200%. Apparently, everyone else is more messed up than we are.

    Don’t put your money in Swiss francs…

  25. Cindy says:

    (17) Mike – Sorry to hear the news…

  26. scribe says:


    Sorry to hear it.

    That s*cks.

  27. Cindy says:


    more recent – 11/17 – Niall Ferguson – “Team Chimerica”
    On the failure of the G-20 to reach some solutions…

    “Memo to President-elect B O: Don’t wait until April for the next G-20 Summit. Call a meeting of the Chimerica G-2 for the day after your inauguration. Don’t wait for China to call its own meeting of a new “G-1″ in Beijing.”

    It just seems to me that this symbiotic relationship is key. We can have all of these far-flung plans for stimulus packages but without the support and cooperation of China – we are hurtin’.

  28. grim says:

    Didn’t someone here say AC was hoppin?

    Trump Entertainment to miss interest payment

    Facing tough competition and sliding revenue amid the economic meltdown, Trump Entertainment Resorts will have to skip a $53.1 million interest payment scheduled for Monday on its 8.5% senior secured notes due 2015 in order to maintain sufficient liquidity.

  29. bairen says:


    Sorry to hear that. That’s really harsh.

  30. grim says:

    In Summit, Westfield, New Providence and Scotch Plains, the average homeowner is now looking at an annual property tax bill in excess of $10,000.

    At what point will ever increasing property taxes begin to add to the foreclosure problem? Or are we already there?

  31. bairen says:

    Heard from a former colleague at Citi in Sydney. People were “made redundant” with no notice and sent home immediately.

    Our former colleagues who are still there are waiting for the hatchet man to show up any day.

    I’m glad they paid Rubin 115 million over the last 9 years. just think what would have happened without him. /off sacrcasm

  32. bairen says:

    Does anyone have an opinion of the Atlanta area? I may be able to swing a transfer there this summer.

  33. Outofstater says:

    Sorry to hear the news, Mike.

  34. Cindy says:


    More on China…

    China GDP May Expand 10% in 2009, State Analyst Says”

    “The country’s cabinet said Nov. 26 it was studying extra measures to help struggling companies in the steel, auto, petrochemicals and textile industries; to increase key commodity reserves; and to expand insurance for the jobless.”

  35. afe says:

    Sorry to hear the news (17). Hope you are able to find something quickly.

  36. Mikeinwaiting says:

    Thanks all! Service, food, thought I would be safe at least for a while. Was dist. manager, then went out on my own, recently a GM. So it goes, sold all Re in 05 & 06 ran away from market Nov 07 at 1360 so I’m in good shape. Have a mcmansion at 665 a month now that’s deflation! Thanks anyway Frank not my field. Lost you guys coming up to do some skiing, guest room all yours. Just keep it to a low roar!

  37. yikes says:

    Pessimist like you are killing this country by naked selling stocks of good companies, preventing people with good credit from getting mortgages and spreading false rumors.

    back to cluelessness from Frank. hey frank, from 2003-07 when every strawberry picker making 14k a year was getting free money and over extending themselves, was that the fault of the short sellers, too?

    you’re not even a troll. you’re a fraud. a giant fraud masquerading as some hot-shot hedge fund douche on a blog. i feel bad for you, really, i do.

  38. bairen says:

    #30 grim,

    Even for people who can put 20% down, at least 30%, if not 40%, of their monthly payment would go towards property taxes and insurance.

    For example, if you buy a place for 400k with 20% down (about $1,700 a month mtg payment), you are looking at 6 to 8k a year in property taxes ($500 to 675 a month), plus insurance.

    It’s insane. Perhaps I need to visit Atlanta and push for a transfer.

  39. jamil says:

    I wonder how many laid off WS people were here with H visa. They must leave the country within 2 weeks. That’s really harsh.

    I know one guy who had to do that in the summer (getting rid of stuff, shipping things abroad, saying goodbye to girlfriend and friends and then travel home overseas).

  40. spam spam bacon spam says:


    Sorry to hear that.

    I heard Gary say he would share his “benefits” packages…

    (50mg is a lot, though. He’s a professional; don’t try it at home.)

  41. Mikeinwaiting says:

    Grim 30 My monster is over 15k in taxes , glad I don’t own it. Now that’s up here in the sticks can’t imagine what it would be down below.

  42. Mikeinwaiting says:

    spam 39 I’m a bit older than most here 50mg of X Ha! we had ludes. Gary where are you lets go out drinking!

  43. bairen says:

    Will Brigadoon and Summit turn into the next Patterson? Patterson used to be a nice place to shop back in the 50’s.

  44. grim says:

    From Bloomberg:

    America Exports Unemployment as Slump Shrinks Consumer Demand

    The U.S. once exported jobs. Now, it is exporting unemployment.

    America’s deepening recession, which has cost 1.2 million jobs so far this year, is taking a heavy toll overseas. Shrinking consumer demand for imports and less need for outsourcing by U.S. companies are idling workers at Germany’s Porsche SE and Chinese businesses that make toys for Mattel Inc.

    Economists say worldwide unemployment may increase to a two-decade high as trade and investment ties that have developed during 20 years of globalization magnify the impact of the U.S. contraction. Without buoyant economies elsewhere in the world to act as buffers, a longer, deeper slump in the labor market is likely.

    “In the same way that we were supporting economic activity when we were growing rapidly, the recession in the U.S. is going to be a drag on the global economy and is going to reduce employment in our trading partners,” says Lewis Alexander, chief economist at Citigroup Inc. in New York.

  45. kettle1 says:


    China’a ability to work with us may be about to hit the wall, They may soon have no choice but to start calling in our chips.
    It all depends on how far their economy drops

  46. kettle1 says:


    From people i have talked to, i would guess that the taxes are already a factor in foreclosures.

    So when do the unemployed NJREReport poster get together and form their own bank? get a loan from tarp and offer some shiny new CDO’s as collateral

  47. Frank says:

    Forget Westfield, those people need to pay-up, but Roselle. That’s a crime.

    “Roselle residents were hit the hardest this year, with homeowners seeing a 9 percent jump in taxes. The average tax bill is now nearly $8,400, up $700 from last year.”

  48. Cindy says:

    (44) Kettle – “It all depends on how far their economy drops.”

    I’ll watch that. Not that the 10% number @ 33 can be believed. But at least they are taking some steps to address their problems – expanding insurance for the jobless, infrastructure…I guess they are buying treasuries. We shall see…

    I read somewhere that they hold 1/5 of Freddie/Fannie – Do you think that is true?

    It does sound like a marriage and we don’t want a “divorce” right now…

  49. SAS says:

    Just got back from the Jets game at the Meadowlands.

    I haven’t been this cold since that winter of 85 in Rapid City, South Dakota.

    damn, I’m freezing.


  50. Stu says:


    Sorry to hear it. I should be joining your ranks in May with many scares between now and then.

    But don’t worry about a thing. According to Frank, there is no recession.

  51. Hobokenite says:


    I take it your definition of a recession is when all economic activity stops?

  52. SAS says:


    Chin up bloke!
    Use this as a chance to rediscover yourself and start something new. Yes, in the meantime you may have to take something for the intermediate. But, don’t give up on yourself and rediscovering yourself.

    I’ve been let go at jobs once or twice in my time. Never let it got to me, because if you don’t run with your tail between your legs, its usually ends up opening doors, that in turn, open other doors.


  53. SAS says:

    ha ha…

    That reminds me. I had this bloke, who was a kraut from Germany, whom I worked for. He basically was my boss. He “let me go” because I did do all he wanted me to do.

    He told me I wasn’t very good at what I did, and should consider another line of work…

    I then leaped across his desk and clocked his glass jaw cause I don’t take crap from some German bloke telling me I’m no good.

    In any case, after I left that joint, started a new gig, made more money and enjoyed the new gig alot more too.


  54. yikes says:

    Clot, you want a Bucks County laugh?

    this house is listed at 629k.

    Just for kicks, i looked up a few neighbors. The house two down – which is a bit larger – sold for 634k in May of 2007.

    Would making a lowball of 100k off – it says “seller motivated” – be absurd?

  55. Pat says:

    Good luck, Mike. I hope you find what you like. I’m still looking.

    Since August. All the offers are a hellacious commute. Dark, Bus, Train, Bus..Work. Bus, Train, Bus, Dark, home. I’m too old for this.

    So, I’m volunteering.

    Anecdata. At K-Srs-Mrt today, the doorbuster was a Brbi for $2.99. The lady running the church giving tree told me last night that she feared that this year, for the first time (this church is 12 years old), there would be more askers than givers. So I headed down to Germantown at noon. Never thought I’d get any of the discount items. Got there, and nobody was there. The toy dept. clerk pointed out the big stack of cheapo Brbi dolls. They were sad and unclaimed.

    I got every doorbuster from Friday and today and never got in my car before 11. I even got the $8 coats at Walmart that were supposed to be over at 11 am on Friday morning. I went at 5 pm. That ain’t supposed to happen. I got the four dollar Hannah Montana cozy pants this afternoon. WFT?

    Frank, we’re in recession. But if you want to wait until Hoboclown falls into the river, feel free.

  56. NJGator says:

    Every time I think I miss my old Hoboken days, Frank posts and I snap back into reality.

  57. Clotpoll says:

    mike (17)-

    Sorry to hear that. Hang in there…

  58. Clotpoll says:

    yikes (55)-

    Morons. Drop a 100K-off bomb and see how “negotiable” they really are.

  59. yikes says:

    i already emailed the real estate agent and asked, “how serious are they about moving the house if they’re ASKING at 2007 peak prices?”

  60. Ben says:

    AC is not poppin. I was there the night before that last Hopkins fight. I was in line at Philips and 1 other person was in line with me. In fact, he was the only person on the boardwalk. His name was Harold Letterman, of HBO boxing. I was talking to him and we were the only 2 people in AC on a Friday night. I asked the waiter at the restaurant where everyone was and he said “it’s the economy”. The place was a ghost town and every table’s limit stayed at 5 dollars. 5 dollar table minimum on Friday night was non existent a few years ago.

  61. Ben says:

    I wonder if Frank’s hedge fund is going to purposely start buying Hoboken condos at more than asking to try to prove us all wrong? Why not? Every other hedge fund does stupid crap with their clients money.

  62. Clotpoll says:

    Ben (62)-

    If Frank’s fund is indeed investing the State of NJ’s money, they have many far more creative ways to lose tons of cash than buying underwater RE.

  63. Cindy says:


    Mish is saying a bottom is 3-5 years away…

    “Housing Update – How Far to the Bottom?”

    “I am sticking with my model that suggests there is another 3-5 years before housing bottoms in the US. I also expect the UK, Canada, and Australia to follow similar paths, offset only by the start of their respective housing busts.”

  64. HEHEHE says:


    Where’d that rally go?

  65. tbiggs says:

    yikes (55) –

    I live near Newtown, maybe 6 miles away from that house. Overall, Newtown hasn’t been hit hard – yet. Probably like the northern NJ counties were before the financial jobs got slashed. Everyone talks about the economy, but as if it is something that is happening to other people. The restaurants and stores in town remain crowded. There’s still a lot of denial here.

    The house is in a nice area near the Delaware River, and it’s a good neighborhood, if you happen to like pretentious made-of-flakeboard McMansions.

    Luckily I made my last payment on my little cottage last December (yay for 15yr mortgages!)… hopefully I can ride this one out.

  66. Al says:

    grim Says:
    November 30th, 2008 at 4:37 pm
    My own worthless anecdote?

    My local Costco was empty this afternoon, no lines at the register. In and out in a few minutes, not typical for a Sunday.

    For My Costco on Route 27 (edison I believe) starting october crowds are noticably thinner. I love it. But I can not say it is due to ressesstion – in October Wallmart grand opening next door have happened.

    I did nto think wall-mart will make it better at costco but it did siginficantly. I still do bulk of my shoping at costco as I do not like quality of food and durable items at Wallmart.

    But it is great for sheapo kids toys – my little toddler manage to destroy his toys in days…. Plus little “Lead” will make him tougher, right??

  67. Michael Lewis, famed author of Liar’s Poker, penned an great article over at Portfolio.com on the death of Wall Street. Lewis discusses how Wall Street became obsessed with mortgage products, which

  68. Tokyo: Japan is ready to offer $106 billion to the International Monetary Fund if it needs extra funds to help emerging economies, a Japanese government source said on Thursday, as a central bank board member warned the financial crisis has

  69. trlbjb says:


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