Monday, December 3, 2007

Is Northeast Real Estate recovering?

Recent figures released by National Association of Realtors (NAR) show prices in the Northeast rose 1.3% compared to a year ago. The Northeast entered the real estate decline before most other areas of the country and may be on the leading edge of the cycle out.

However the expectation that the Northeast will continue this recovery may simply be wishful thinking. Home sales are still declining, inventories increasing, and other economic factors such as the mortgage credit crunch are likely to inflict further damage. The uptick seen in the NAR survey may be a temporary blip in the larger picture for the region.

Northeast Home Prices Remain Strong

"It is looking a little less dark in the Northeast than in the rest of the country," Chen says. "But I don't expect housing activity to pick up substantially in the Northeast in the next six months. There's going to be further correction in terms of sales falling and prices declining. A lot of these markets, such as Boston and New York, are still overpriced, overvalued, and do have excess inventory."