The Northeast, as defined by the Census Bureau, includes Connecticut, Maine, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Rhode Island, and Vermont.
According to the National Association of Realtors the Northeast is facing the current real estate bump better than other areas of the country.
It also mentions that prices in the Northeast showed an increase of 1.3% compared to a year ago, resulting in the sixth straight month of appreciation. Home prices nationwide declined 5.1% in October compared to October, 2006. The South dropped 6.7%; the West, 6.9%; and the Midwest, 1.6%.
The Northeast’s gain follows five straight months of higher prices on a year-over-year basis, including a 0.2% rise in September to a 6.4% bump in July.
According to Lawrence Yun, NAR’s Chief Economist, ”For the Northeast, the worst is already past and the question is how fast the recovery will be,” Yun said. “Will it be a strong recovery or weak recovery?”
Other real estate experts are not so optimistic, and they say it may be too soon. It’s true that the Northeast has, so far, fared better than the South and the West, where Florida, California, Arizona, and Nevada’s speculative markets have gotten clobbered by foreclosures, the credit crunch, and weak buyer demand. And it’s even doing slightly better than the Midwest, where homes are still relatively moderately priced. But the story is more complicated than that.
The numbers show that less homes have been sold and those being sold are going for a higher price. Sales in the Northeast fell 12.6% in October compared to October 2006. while U.S. existing home sales fell 20.7% during the same period.
The Northeast has other attributes that may keep it strong. First, it remains an attractive investment for overseas buyers, especially those who are benefiting from the dollar’s weakness against the British pound and euro. Second, the existence of many prestigious centers of higher learning will continue to contribute to a robust local market.
Many home sellers have resisted to reduce their asking prices in the north even in a market where demand has decreased, but if economic market conditions change, for example with job cuts or lower bonuses at the end of the year, their expectations will have to adjust.
