A Buyer’s Market, a Seller’s Pain

Ridgewood

Skip to next paragraph Enlarge This Image Aaron Houston for The New York Times

A street in South Orange, N.J., includes a house for sale. Suburban homeowners in the region, like those around the country, are grappling with a decrease in house values.

Multimedia Graphic Snapshots of the Suburbs Graphic Tough Market for N.J. Homeowners Related Foreclosure: A Thicket of Easy Loans That Entangled One Mortgage Holder (May 18, 2008) As Goes the Rest of the Nation, So Goes Connecticut (May 18, 2008) Even in the Hamptons, Homes Are Slow to Sell (May 18, 2008) In Westchester, Many Seem Able to Wait Out the Storm (May 18, 2008) In the Region Long Island, Westchester, Connecticut and New Jersey Go to Complete Coverage » Enlarge This Image Aaron Houston for The New York Times

Christopher Otteau, an appraiser.

WITH a laser measuring device clipped to his belt and a reel of yellow tape tucked under one arm, Christopher Otteau roamed around a tidy house on a corner lot in Ridgewood, preparing to deliver the unwelcome news to its occupants.

They, like many other homeowners whose property Mr. Otteau has appraised lately, were hoping to hear that their special house in their special neighborhood in their special town was immune to the gravitational force that has been pulling down home prices from coast to coast. Mr. Otteau’s oft-repeated response: Sorry, but we are all in this housing slump together.

These days even a well-kept house like this one, in a desirable town like Ridgewood, is likely to sell for a price that disappoints its owners. The five-bedroom ranch with a swimming pool was listed for more than .1 million, but Mr. Otteau, who is usually hired by the lender holding the mortgage, was just beginning to hunt for flaws.

“In a tough market, nothing is overlooked,” he said as he examined a shallow hole near the front door where a tree had been planted. “In a good market, lots of things are.”

Clipboard in hand, he assessed everything from the topography of the lot (“slightly sloping”) to the type of street it bordered (a “main feeder”). He gave it extra points for its curved stone walkway, which, he said, “enhances curb appeal.”

He would have to find out how much other houses in the neighborhood had sold for recently before he could fix a value on the home.

But one conclusion was inescapable: On the section of the appraisal form that describes the condition of the local housing market, he would check the box for “declining.”

The suburbs of New York City were late entrants in the downturn that some economists think is already a recession. The main cause of the current weakness was the bursting of the American housing bubble, which had been pumped up by several years of hyper-aggressive lending and borrowing.

Although prices rose much faster in newly developing parts of the Sun Belt, house values doubled in the metropolitan area, rising to 0,000 in 2005 from about 5,000 in 2000, according to the National Association of Realtors. Now, a reversal is well under way, but the concept is sinking in slowly for most residents of the area with property to sell.

Those who have owned their homes since the start of the decade became accustomed to a steady, rapid appreciation. Buyers were lining up to tour houses and waging bidding wars that drove prices well above what sellers were asking.

“In 2005, it was almost impossible to overprice a home,” said Mr. Otteau, 29, who has been appraising property from northern New Jersey to Delaware for six years since joining the real estate business that his father has operated for decades.

But the tide turned more than two years ago, he said. With prices rising so much faster than people’s incomes, houses started to become unaffordable and, he said, demand waned.

Since then, home values statewide have declined about 15 percent and, he estimated, they will fall an additional 5 percent over the next year. In many towns, the inventory of unsold homes has been rising.

The housing market has softened considerably in the suburbs north and east of New York City as well.

On Long Island, the number of home sales in March was almost one-third lower than in March 2007, according to the Multiple Listing Service of Long Island. The median price of those homes fell to 9,000 last month, down more than 8 percent from 5,000 the previous year.

In Nassau County, almost a full year’s supply of inventory was for sale as of March, up from a little more than eight months’ worth a year ago, according to the service. In Suffolk County, it said, almost 15 months’ inventory was for sale.

In Westchester County, sales of single-family homes fell more than 30 percent and sales of condos plunged almost 35 percent during the first quarter of 2008, the sharpest decline in 28 years of record-keeping by the Westchester-Putnam Multiple Listing Service. In Putnam County, however, sales dropped by 9 percent, and prices fell 5 percent, according to the service.

Westchester’s real estate market is effectively on hold as prospective sellers wait for a better time to list their homes, said P. Gilbert Mercurio, chief executive of the Westchester County Board of Realtors. “You have to be aware that there are a lot of people who may want to sell property but don’t have to do it at a particular time,” Mr. Mercurio said.

The sooner sellers let go of their dreams of cashing out at prices they once might have gotten, the sooner the market will stabilize, Mr. Otteau said.

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