Homes Prices Around Jersey Shore Bounce Back Up
Despite the fact that numerous residents are having problems paying off their New Jersey mortgages these days - resulting in increasing foreclosures around the state - home sale prices in many regions are taking off.
Take the Jersey Shore: After a slight dip in the second quarter of 2006, median home sale prices in the sector rose 7.3 percent in the third quarter, the National Association of Realtors and The News Journal reported Monday.
The median sale price for an existing home in the region that encompasses Monmouth, Ocean, Middlesex and Somerset counties was $415,100, up from $386,900 in the same quarter last year, according to the association.
“The fact that it is up rather than down is at least some sort of hint that the area is not suffering greatly, at least yet, from any major price pressures,” said Joel Naroff, chief economist at Commerce Bank. “That is not to say that I don’t think it might happen.”
Due its popularity as a vacation destination, the region is rarely in trouble. People pay high prices for a second home mortgage around the beach.
Other areas of New Jersey saw increases in the third quarter as well. The median price in an area that includes Bergen and Passaic counties was $558,600, up 4.7 percent from $533,600. The median price in Union, Hunterdon, Morris and Essex counties was $455,400, up 1.9 percent from $446,800.
Economist James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University, said the median price increase may indicate that fewer moderate-price homes are selling.
The number of homes on the market remains high, he said.
“It was during the third quarter that there was starting to be a realization that the boom was history, but I think we still have people who refuse to sell at the new prices,” Hughes said. “That is why you have a lot of unsold inventory or people actually pulling their houses off the market.”
As overpriced homes come off the market, they are being replaced with houses at a more “modest price level,” said Albert S. Veltri, president and chief executive officer of Veltri & Associates in Toms River. These appeal to those in need of adjustable-rate mortgages and lower initial payments.
“As that transition happens, the market will begin to build up more steam,” Veltri said.
So far this year, the average sales price of a single-family house in the Monmouth-Ocean Multiple Listing Service rose 4.2 percent, said Maureen Penta, general sales manager at Diane Turton, Realtors. The average sale price was $486,521, up from $466,878 for the same period last year.
The number of homes sold so far this year has fallen to 9,212, Penta said, citing listing-service figures. That’s down 19 percent from 11,339 in the same period last year.
Prices are stabilizing, but some sellers are still reducing prices.
“People who have been sitting with their home on the market for an extraordinary period of time obviously are reducing the prices of their houses,” said Christina Banasiak, president of the Monmouth County Association of Realtors.
Yet some homes, which are priced correctly, are getting multiple offers, said Banasiak, assistant office manager at Weichert Realtors in Marlboro. “It’s happening so if a house is priced right, and it’s a good house in decent condition, it’s still going to sell.”
The key is setting the price correctly when a home is first listed, Veltri said. This is the best way to ensure it stands out to possible mortgage applicants.
“Houses that are priced high and start to come down, they actually become invisible to buyers,” he said.