Worst Market In 10 Years?

It's been a while since we heard anything real-estate related from friend-of-the-blog, Warren Boroson. So this piece, from the Morris County Daily Record, was a bit of a surprise to me.

From the Daily Record:

Sales of homes slow in Morris
By Warren Boroson

May and June are traditionally the best months for real-estate sales, but this May and June have been "very, very slow," says Dan Scher of Ledgewood, who has been selling real estate for 25 years.

It's the worst market he has seen in 10 years, for himself and other agents.

The root of the problem, in his view, is that sellers are stuck in a time warp and refuse to budge from their lofty asking prices.
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Times have changed, but many sellers have not.

What has jinxed the market?

Scher says, "The inventory of houses for sale has risen dramatically, interest rates have climbed, gas prices are outrageous and we have a terrible war in the Mideast. The country is in the doldrums."

Then there's the obvious reason: House prices have climbed too high.
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Jeffrey G. Otteau, president of the Otteau Appraisal Group, says he has no hard evidence that house prices in New Jersey have declined -- but the latest data aren't in.

His most recent data are for the first quarter of this year, and the next will be for the second quarter -- available at the beginning of July.

But, worrisomely, he points out that the market began slowing in April, at the start of the second quarter. That's when "the bottom fell out of the market." The number of potential buyers declined sharply.
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Otteau's latest report, which notes a statewide decline in sales in April, concludes that this is "solid confirmation that the transition to a buyer-controlled market is now complete."
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No, the worst won't happen. Frustrated homeowners will NOT be forced to leave their unwanted domiciles to their children because they cannot find buyers. Real-estate agents won't be applying for jobs as greeters at Wal-Mart, competing for positions with journalists who used to write about real-estate activity.

What will happen is: lots more negotiation. That's what is recommended by Keith Gumbinger, vice president of HSH, the mortgage-reporting agency in Pequannock.

I asked him: Why are there some weird people out there gloating over a slowdown? Is it because they are not homeowners and have been choking with envy in recent years at the fortunes that we homeowners have made? (I tell people: "I bought my house for $1.75 and sold it for $4.5 million. Or something like that." Actually, I cleared a mere $500,000.)
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Gumbinger acknowledges that it's a different market. "We've passed the peak, we've topped out. There's more room for negotiation now.

"Sellers know that buyers are not lined up 10 deep. And buyers know that while there were once three acceptable houses and 22 bidders, there are now 30 acceptable houses and very few bidders. Instead of asking for 10 percent off, they may ask for 20 percent off.

I thought this was quite fair and balanced, considering the source. However, I do have an issue with the stab, directed at this blog, in this piece. Why Warren? Why lower yourself to insult? Just who are these wierd people choking with envy? Oh, it's us of course! Why don't we just agree to disagree, and stop with the insult and derision?

Even though we've had quite a colorful relationship, Warren, I'm not going retaliate with a volley of insults. Instead, I'm going to thank you. I would like to thank you, publically, for trying to seek more balance in your reporting of real estate.

Caveat Emptor!
Grim