Optimism Blooms As New Jersey Real Estate Market Enters Spring Share by Judy Speicher
SUMMIT, NJ – Warm weather is finally arriving in the Garden State. Along with daffodils and crocuses, is another sign of spring, For Sale signs in front yards. This year New Jersey realtors are seeing something they haven’t seen for a few years: Optimism. “I’m very optimistic for 2011 because I see a lot of listings and listings being sold,” said Zelda Greenwald, an agent with Weichert Realtors in Summit and a realtor for over 20 years. “I think the sellers this year are much more realistic about the market, and the pricing of the listings have been more realistic this year,“ she added. Professor Robert W. Burchell, director of the Center For Urban Policy Research at Rutgers University, likened the Spring 2011 market to the old adage in real estate “If it’s priced right it will sell and if it’s priced wrong it will not sell.” The question Burchell asked is, “What is the normal price?” Is it from the period between the 1980s up until around 2002 when growth in New Jersey was “somewhere on the order of 4-percent”? Or, as many homeowners prefer, the 4-5 years leading up to roughly 2008, when real estate was going up 15-20 percent a year? Of course this was followed by the recession when prices started going downhill. Burchell said at the time of soaring prices, people knew it was a “ridiculous amount they were being offered for their home”, but now they are unwilling to accept the reality that their home is worth less. Realtor David Cooper with Coldwell Banker in Millburn, said prices are off, but echoed a common theme, “If you have priced your house reasonably, it will sell. Maybe not right away, or for what you assume it’s worth, but it will sell.” Cooper added “Unlike other areas around the country, we have an artificial desire of people to move to Millburn. This is for a myriad of reasons, but to a large extent, the schools, and the train commute of the Midtown Direct, are the major movers.” Cooper said, “You are not hearing the horror stories that are on the nightly news, because all real estate is local, not national. Las Vegas and Florida have nothing to do with Short Hills. There certainly are trends, but as far as I can see, it ends there.” Burchell explained that in this state, home prices will always be expensive. “New Jersey vies with Connecticut and Maryland for the highest household income in the country. So, your housing is going to be expensive because your people essentially can pay for it.” Even with roughly 10-percent unemployment rate in New Jersey, Burchell said housing remains pricey “because all of the people that are employed are making very healthy incomes.” He said when you factor in higher house prices on the coasts of the U.S., plus the salaries that are paid within a commuting distance of New York City and Philadelphia, then housing will be expensive. Despite new optimism in the real estate market, New Jersey has been hit. Burchell said “New Jersey is much more reflective of the average of what’s happening in the U.S. It’s not an Arizona, Florida, Nevada, California, it’s at the average.” He said we’re only at about half the housing starts we would normally expect in the year. While there’s not a lot of activity going on, housing starts in New Jersey are only off by about 25 percent, compared to rates of 60-80 percent elsewhere. In its March 21st report, the National Association of Realtors said February existing home sales in the country dropped 9.6 percent, and were 2.8 percent below the pace in February of 2010. Lawrence Yun, NAR chief economist, said he expects an uneven recovery. “Housing affordability conditions have been at record levels and the economy has been improving, but home sales are being constrained by the twin problems of unnecessarily tight credit, and a measurable level of contract cancellations from some appraisals not supporting prices negotiated between buyers and sellers,” he said. Regionally, existing-home sales in the Northeast fell 7.2 percent in February and are 8.3 percent below February 2010. The median price in the Northeast was down 9.5 percent from a year ago. Greenwald called the market “still very fragile”. “It’s not the market we saw 3-4 years ago, the banks are not giving mortgages like they did years ago. They’re very cautious and the appraisals are coming in low.” “There’s not a tremendous amount of sales, don’t get me wrong,” said Greenwald, “But if a house is priced precisely right and in good condition there could be multiple offers. The days where the seller would see 10 and 20 percent appreciation, those days — they’re non-existent.” The only area of the housing market that Greenwald has seen go down in value is townhouses. She sees the most activity in houses in the $400,000-$800,000 range. “Most definitely the million-plus range is not that solid,” she said. Greenwald said, “I’m very optimistic about the market. For the past few years it’s been very trying for the realtors and the buyers. Buyers are very savvy today. They’re not going to overpay for a home. They’re very cautious.” Related Content Photos Optimism Blooms As New Jersey Real Estate Market Enters Spring Credit: Judy Speicher



