Home prices in the New York metropolitan area, including North Jersey, rose slightly in the first quarter of 2010, in another sign that the housing market may be stabilizing.

The median price of an existing single-family home in the region hit $436,900 in the first quarter, up 2 percent from a year earlier, the National Association of Realtors said Tuesday. But values have dropped since 2006 and 2007, when the median price was around $540,000.

Nationally, the median price of an existing single-family home was $166,100, down 0.7 percent from a year earlier.

The North Jersey price rise was in line with gains in household incomes, said Patrick O’Keefe, an economist with the accounting firm J.H. Cohn in Roseland.

“While the region’s economy is beginning to recover, it will be quite some time before business conditions — and employment — return to pre-recession levels,” he said. “As a consequence, housing will recover only slowly.”

The number of sales statewide was up 14.5 percent over the first quarter of 2009, probably because of an $8,000 federal tax credit for first-time home buyers and a $6,500 credit for repeat buyers. Since both credits expired April 30, buyers had an incentive to jump into the market during the first quarter. The increase in sales also reflected the fact that the market was very slow during the first quarter of 2009, which was just a few months after the financial market crisis.

The expiration of the tax credit may lead to slower home sales during the rest of 2010, some analysts say. In a recent report, appraiser Jeffrey Otteau of East Brunswick said the real estate market will be affected by the end of the tax credit and an expected rise in mortgage rates later this year. In addition, he said, the inventory of homes for sale has been rising in New Jersey, as homeowners who waited out the recession put their properties on the market.

“It appears likely that home sales will slow at some point later this year and then regain their recovery momentum heading into 2011,” Otteau said.

http://njrereport.com/

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