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Real estate auction indicative of market's slowly building recovery

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A Hunterdon County real estate company is auctioning 20 properties today, containing a broad mix of parcels its CEO said shows a gradually healing market.

Max Spann, chief executive of Max Spann Inc., said today's auction includes "fixer-upper" residential properties, downtown mixed-use sites, undeveloped land near highways and former day care centers. He described the volume of properties available as mid-range.

But the content is changing. Spann said a year ago, it was rare to see developable property included — auctions heavily relied on condominiums — but the firm now expects to be selling more land to builders in the coming months.

Relieving the market of unused property is widely seen as a key step toward a broader recovery leading to more building and purchasing.

"Every time we have an auction, it is a snapshot of where the marketplace stands," Spann said. "With these odds-and-ends properties, it is symbol that the remnant properties are being shoveled out."

The auction was scheduled to begin at 2 p.m. at the Marriott Newark Liberty International Airport.

Patrick O'Keefe, director of economic research at CohnReznick in Roseland, said the rise of building permits portends more construction. Census data show New Jersey permits for residential building rose one-third last year, to 17,600, compared with 13,200 in 2011.

But O'Keefe cautioned that the recovery launched from a depressed level. New Jersey, he said, still ranks second in terms of mortgage owners who are more than 90 days behind or in foreclosure, according to Mortgage Bankers Association.

"Generally, our research shows the market is recovering, and the pace of the recovery appears to be accelerating in terms of volume of activity and, to a little less robust degree, in pricing," O'Keefe said. "But remember, we're recovering from an extremely low level."

Jeffrey Otteau, president of Otteau Valuation Group in East Brunswick, said he expects construction to further pick up, increasing demand for developable property.

“The reason is there is a stronger appetite to acquire real estate today because a bottom has hit for prices, and prices are starting to rise,” Otteau said.  

Max Spann, which has offices in Clinton and Manhattan, holds auctions quarterly.

Write to the Editorial Department at editorial@njbiz.com

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