Wednesday, May 27, 2009

NJ Prices Still Falling

How much longer and further will home values in NJ continue to decline? We just underwent one of the most significant declines - 11.8% in March year over year. And the general consensus is that there is still more to go. That is where the consensus stops. Some are predicting that the decline is slowing and the market will turn soon. Others are not so optimistic - with the continuing Wall Street fallout and unemployment increases the market forces just do not show signs of positive changes. The Star Ledger breaks it down in an article titled N.J. home prices haven't hit bottom yet. Let's take a look -

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.

1 comment:

Anonymous said...

NY/NJ housing market decline started late in the game compared to many other parts of the country and will play catch up now.
Unemployment is zooming up in the area since the industries that populate the state such as banking finance and pharmaceutical are in decline and laying off big time.
From what research been able to do, houses are about 1/3 over priced in the area vs incomes andf inflation. we have a ways to go.