The logic is depressingly simple. People lose their jobs, can't pay their mortgages and their homes go into foreclosure. Those houses are sold, usually at a loss. It's a cycle that is tugging New Jersey and New York-area home prices down at a record pace -- nearly 12 percent in March compared with last year, according to data released yesterday.
The New York-area market, including 14 New Jersey counties, saw an 11.8 percent price drop in March, a pace that has quickened over the past few months, according to the Standard & Poor's/Case-Shiller index.
"There is no turnaround in the market at this point," said Maureen Maitland, S&P vice president for index services.
Prices here still have further to fall, experts say, at a rate of about 1 percent a month....
Prices are expected to fall further as more people lose their jobs and homes, hitting a bottom sometime in the second half of the year, said Jeffrey Otteau, head of Otteau Valuation Group, which studies New Jersey real estate data.
Hitting bottom within the next six months sound great - but is it realistic. And by the predictions that would be another 6% or so decline. Still pretty significant drop from the peak of the bubble.
Well hopefully the predictions are correct, the bubble prices will remain just a memory for many - other than those still saddled with excessive debt or significantly damaged credit.