January home sales in the Northeast plummeted nearly 25 percent over the past year, far outpacing the rest of the country, according to a report released yesterday by the National Association of Realtors.
Prices fell 14.7 percent over the same month the previous year, the report said. About 35,000 homes were sold last month in the Northeast, a region that spreads from New Jersey and Pennsylvania up through Maine, for a median price of $228,000. That means half of homes sold for more and half sold for less.
When adjusted for changes in seasonal buying patterns, sales in the Northeast in January fell 14.7 percent over December.
About 45 percent of all homes sold nationally were sold in foreclosure or through a short sale, in which sellers and mortgage lenders avoid foreclosure by accepting less for the house than the balance of the mortgage, the Realtors' group estimated.
The Passaic metro area, the only area with available local statistics, closely mimicked the Northeast corridor. Sales in Passaic dropped 23.4 percent and prices fell 16 percent to a median of $287,000, according to the Associated Press-Re/Max Monthly Housing Report, also released yesterday.
"The pain that we see, in terms of declining prices and sales, is going to continue for some time," [Joseph Seneca, an economist with Rutgers University] said. "Prices may be very attractive now, but they may be even more attractive three, four months from now. The expectation of further declines will keep people on the sidelines."
It looks like its time to write-off any hopes for 2009 already. With almost half of the properties sold being from foreclosures or short sales people a big group of buyers are limiting their sights to bargain fire-sale prices. It would be interesting to know who these buyers are - owners that are looking to occupy the property or another group of speculators looking to buy houses now that they are cheap.
In the West where the number of sales of have substantially increased it is mostly due to the plummeting prices. That is not necessarily the home price sale we would like to see on the east coast.
Finally if anyone knows what towns the Passaic metro area encompasses the please pass that info along. Thanks.