Chilly forecast for North Jersey home sales

Don Smith/staff photographer

Rick Herman of Allendale put his home of 14 years on the market two months ago. "We love the place," he says of the Victorian, "and it's kind of hard to leave. But it's five bedrooms, way too much for two people."

This spring traditionally the busiest time in the housing market buyers may find they've got fewer choices than they'd like, because the inventory of homes on the market is down, compared with last year. In Bergen County, the number of single-family homes for sale dropped 25 percent in January and February, and in Passaic County, about 15 percent.

One big reason is that many sellers have held off because of the unusually harsh winter weather, and they're likely to list their properties soon, which may bring a surge of properties to the market.

But other homeowners especially those who bought during the housing boom still can't sell without taking a loss, and those properties are likely to stay off the market, shrinking the potential pool of available homes.

"There are still sellers waiting for the market to improve in order for them to get out," said Jeff Adler, a Keller Williams agent in Ridgewood.

"A lot of sellers have been taken aback by the amount of decline from the peak to where the market is now," agreed Jorge Ledesma, a Re/Max agent in Teaneck. "It's a bitter pill to swallow when you see so much equity in your home, and through no fault of your own, you see it go away."

Home prices in the region are still, on average, about 20 percent below their 2006 peaks, so owners who bought during the housing boom may well be "underwater" that is, owing more on the mortgage than their home is worth. Others may not be underwater but still have 2006 prices stuck in their heads as the "real" value of their home, and are reluctant to sell for less.

As home prices rise, more of these homeowners will be willing and able to sell, observers say. With prices up statewide an estimated 4.3 percent last year, many homeowners are already moving out of the underwater category, said Jeffrey Otteau, an East Brunswick appraiser who follows home prices statewide.

"We will see more [home selling] activity as equity gets restored," Otteau said recently at a seminar for real estate agents in East Hanover.

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Chilly forecast for North Jersey home sales