Year-Over-Year Declines Hit New Jersey

A few weeks ago, I had mentioned that I thought we would begin to see year-over-year price declines by the third quarter of 2006. This was due to the fact that peak prices (and demand) were seen during the third quarter of 2005. However, according to a report released yesterday by the NAR, parts of New Jersey are already experiencing year-over-year declines. That is right, for the first time in more than 10 years the median price fell.

From the Asbury Park Press:

New data add to changing homes picture

The median sales price of an existing home in the region that includes Monmouth and Ocean counties was $393,600, down 0.1 percent from the same period a year ago.

Real estate sales in New Jersey declined 16.3 percent in the second quarter.

There was a nine-month supply of homes for sale in both Monmouth and Ocean counties in the first six months of 2006. A year ago, there was a 4.5-month supply in Monmouth and a 4.3-month supply in Ocean.

For the first time in a decade, home prices in the region that includes the Shore have declined, although the drop in second-quarter prices was slight, the National Association of Realtors reported Tuesday.

The median sales price for an existing home in the region that encompasses Monmouth, Ocean, Somerset and Middlesex counties was $393,600 in the second quarter, down 0.1 percent from $394,100 in the second quarter of 2005, according to the association. The median means that half the homes in the area sold for more and half for less.

It's the first time that the association has seen a percentage decrease since prices in the region fell from $148,600 to $148,500 from 1993 to 1994. They have climbed ever since.

"There is a major housing slowdown," said James W. Hughes, dean of Rutgers University's Edward J. Bloustein School of Planning and Public Policy. "It is surprising that prices have behaved as well as they have."

Other areas of New Jersey still showed single-digit percentage increases in the second quarter. For instance, the median home price in an area that includes Bergen and Passaic counties was $473,700, up 4.6 percent from $452,700. The median price in the area of Union, Hunterdon, Morris, and Essex counties was $443,800, up 7.1 percent from $414,400.
...
The regional figure from the association may look worse because in Somerset County, the median price fell 4 percent to $414,223, according to Otteau. In Middlesex County, the median price rose 8 percent to $412,760. The association's reports do not break out figures for individual counties in New Jersey. They also do not include new home sales.

Otteau said it may just be a matter of time until the Shore prices show more of a decline.

"We are beginning to see price declines in the market, which began in the second quarter of this year," said Jeffrey G. Otteau, the firm's president. "They won't show up in the calculations until the third quarter of '06."
...
Albert S. Veltri, president and chief executive officer of Veltri & Associates of Dover Township, said he expects home prices to rise about 3 to 5 percent this year.

"We are seeing a lot of what we call low-ball offers," Veltri said. Whether the offer is accepted depends on the personal needs of the seller, Veltri said. "I think people are starting out low, and the sellers who are not flexible are turning down those offers, obviously."