Long Island hasn’t seen the worst yet
Sales have slowed on Long Island, with a drop in home prices and an increase in inventory. Pearl Kamer, chief economist for the Long Island Association, said home prices dropped across Nassau and Suffolk counties by 5 percent in the fourth quarter, while available inventory jumped by 8 percent.
And she said the most expensive homes have been hit hardest, with a price drop of between 10 to 20 percent in some areas.
She attributes the market’s fourth-quarter downturn to buyer caution in the wake of the national mortgage meltdown. “It’s the whole subprime mess,” Kamer said.
Meanwhile, statistics for all of 2007, released by the Multiple Listing Service of Long Island, show that average prices for both counties remained fairly flat to down compared to 2006.
Nassau posted an average price of $550,000 for December compared to $600,000 for December 2006, while Suffolk posted an average price of just under $450,000 in both December 2006 and December 2007, according to the MLS.
Kamer does not think Long Island has seen the worst yet. She predicted that the market will remain sluggish, and that the impact of the national mortgage mess will be felt as more homes come on the market and take longer to sell.
“We will see the worse of the subprime crisis in 2008, with the market not stabilizing until 2009 at the earliest,” she said.
She also said a lack of middle-income housing will cause problems for first-time buyers on Long Island. But she noted that Suffolk County Executive Steven Levy has been pushing state legislators in Albany to adopt legislation to develop more condos and townhomes geared toward first-time buyers. Kamer said that if Albany adopts the idea, it could transform the outlook of the market for future years.
Meanwhile, Governor Eliot Spitzer convened a commission last month to study property tax issues. The commission, which will be headed by his former rival Nassau County Executive Tom Suozzi, an advocate for property tax reduction, will make preliminary recommendations in May. It could provide assistance to Long Island, which Suozzi has long said is overtaxed.
Northern Jersey outperforms rest of state
Northern New Jersey remains the Garden State’s strongest residential market, largely because its close proximity to New York gives it an edge. The market for condos in Hoboken and along Jersey City’s waterfront continues to be robust, even as overall prices have flattened over the last year.
Data compiled by the Hudson Realty Group show that the average sales price for Hoboken was $524,126 for the fourth quarter of 2007. The Hoboken numbers are higher than the state median. The fourth quarter showed that condos remained on the market for an average of 61 days in Hoboken, about the same as the first three quarters of 2007.
Somerset County was the only county in northern New Jersey to post both an increase in median sale price and number of homes sold from the third quarter of 2007 compared to the same stretch in 2006, the most recent statewide data available. Median prices in the county jumped 1.27 percent to $508,400, while home sales rose 8.39 percent.
Essex County, which is home to wealthy towns like Short Hills and low-income cities like Newark, posted a decline of 8.24 percent to $432,300. Essex also saw home sales drop 13.74 percent from third-quarter 2006 to 2007.
Meanwhile, prices statewide have remained fairly flat since 2005, after showing dramatic gains since 2000.
The average sales price for all of Northern Jersey was $469,300 for the third quarter. That was above the Central Jersey average of $393,200 and the $275,300 average in South Jersey.
Third-quarter prices for 2007 show that statewide, the New Jersey housing market was slightly down.
The numbers, compiled by the New Jersey Association of Realtors, show an average sales price of $399,000 statewide for the third quarter, a decrease of $1,600 from the same period in 2006. The numbers rebounded from a low of $380,400 for the first quarter of last year.
Westchester remains steady—in some areas
Prices in Westchester County did not budge that much between 2006 and 2007 – at least for single-family homes, condos and co-ops, which make up the majority of the housing stock.
The median sale price of a single-family home rose less than 1 percent to $685,000 for 2007 from $680,000 the previous year, according to statistics released late last month by the Westchester County Board of Realtors.
Single-family home and condo sales increased by 2 percent over 2006, while co-op sales decreased by only seven units, or 1 percent, from 2006. Meanwhile, the county ended 2007 with 4,711 residential units on the market, or 18 percent below the end of 2006.
“It has been a good year overall,” Gil Mercurio, CEO of the Westchester Board of Realtors, said. “The market has been coasting along. Westchester is not being hit as severely as the rest of the nation.”
Westchester, like northern New Jersey, has been largely insulated because its buyers tend to be wealthy and are not affected to the same extent by subprime problems.
The one area of the market that saw weakness was multi-family homes, which tend to either be purchased by less affluent buyers or investors. The volume of sales in that category decreased 38 percent from 2006. Westchester has traditionally had a low amount of these investment properties, Mercurio said. Mercurio predicted that middle-income, affordable housing will dominate the real estate discussion in 2008. He said the county has a shortage of between 30,000 and 50,000 middle-income units.
Connecticut market is mixed bag
Connecticut’s housing market saw mixed results for the fourth quarter of 2007. According to Barry Rosa of Prudential Connecticut Realty, who produces a newsletter on the state’s real estate, Fairfield County’s market is running at 90 percent of last year’s activity, with prices rising slightly.
The median price for 2007 statewide was $199,000, a $4,000 rise from 2006. In Fairfield County, the median price remained flat at $295,000.
Individual towns in Fairfield County posted median price gains, including a 25 percent jump in Westport to $800,000 and a 12.4 percent gain in Stratford to $218,000. Conversely, the median price in Newtown dropped 24.6 percent to $357,450 and 11.7 percent in Wilton to $423,750. (A small set of data may have accounted for the large price swings.)
Rosa said inventory levels were largely the same as they were in 2006. He said inventory in tony towns, including Greenwich and Darien, has not changed.
“We are taking our lumps and bumps,” Rosa said. “What we have not had in Connecticut is an excess overhang of inventory. Without that excess overhang, Connecticut is doing well.”
Single-family homes have continued to dominate the market in Connecticut, with Rosa noting that foreclosures have been limited statewide. The foreclosures in Connecticut have been mainly limited to the state’s poorer urban areas, including New Haven, Hartford and Bridgeport.
Go to chart: Long Island, Westchester and Connecticut housing markets