This summer, Fort Lee Realtor Nelson Chen handled the type of transaction that was once a mainstay of Bergen real estate. An investor took a 1950s two-bedroom ranch bought for $624,900, demolished it and turned it into a modern four-bedroom colonial. Chen sold the home, on Fort Lee's Mohegan Way, for $1.25 million to a young couple in July. But Chen says the traditional teardown and rebuild is starting to become a thing of the past. "Houses that we would have presumed would be a teardown - the price has now risen beyond a lot of builder's abilities," he notes; the investor in the Mohegan Way property, as Chen puts it, "probably made a very modest return." The continuing fluctuation in the teardown-rebuild market is just one of the trends in 2007. On average, prices in Bergen were slightly lower in than in years past, but still strong. Blockbuster sales still shined. While the collapse of the subprime mortgage market was the year's biggest real-estate story, that sharp downturn had a different effect in Bergen than in other places. When it comes to the slowdown in teardowns, another contributing factor is the recent passage of local ordinances that make the cycle tougher for builders: one ordinance common among communities requires that the floor area of the home not exceed a certain percentage of the lot size. "It's pretty much countywide at this point," said Richie Wells, owner of the Paramus-based Team Construction Corp. and president of the Builders and Remodelers Association of Northern New Jersey. Wells' company is completing a single-family development in Oakland on 6 acres of land off Long Hill Road. The four homes will range in price from $1.5 to $2 million, and will between 4,200 square feet to 7,00 square feet. One sold in June 2007: the last should be done by Spring 2008. "I'm a third-generation builder, and when my father was building Paramus and Woodcliff Lake, it was about 60 homes in a development." Wells says, Now, a three- or four-home subdivision is a big deal." But with available land at such a premium, he adds building costs for any subdivision can be prohibitive. "Once in a while, a big builder with deep pockets can come in." One of those big builders is K. Hovnanian, which began selling townhomes during the summer in its 126 unit ValleyView development in Montvale. Prices start at $500,000; the models include two- or three-bedroom units ranging from 1,430 to 2,500 square feet. The year's biggest story nationwide may be the subprime market. In Bergen, the numbers of homes in foreclosure- whether default notice, auction sale notice or bank repossession - dropped from their levels in 2005 and 2006, according to statistics from Realty Trac. In the first two quarters of those years, about 740 homes were in some stage of foreclosure. In the first two quarters of 2007, it was about half that amount. But among the most notable ways that problems in the subprime market hit Bergen, Chen says, was in boosting rates for "jumbo" mortgages - that is, those loans for more than $417,000. During period of about three months in the middle of the year, rates for those mortgages leapt from about 6.25 percent to 7.75 percent, he notes. Why the sharp rise? Chen maintains the subprimes spooked Wall Street, so lenders responded by cutting back on other supposedly risky loans like jumbos. But by the final months of the year, rates were evening out. Another way Bergen felt the sting of subprime is how banks have been faced with the prospect of so-called short sales, says Sharon Shakinovsky, president of the Eastern Bergen County Board of Realtors. Imagine that a couple bought a $450,000 home a few years ago with a 100 percent mortgage. Now they need to sell it - but it's worth only $370,000. "The bank wants the money, so they have to approve the short sale," she says. "The seller is trying to walk out of there without owing thousands of dollars, and the buyer doesn't want to pay it." In general, 2007 has been a buyer's market in northern New Jersey, says Marlyn Friedberg, who owns Friedberg Properties, which has six offices in the region. She notes that interest rates are still relatively low, and prices have come down. On average, houses are staying on the market longer, but that's something she's seen before. "I've lived through a lot of markets, and this one will probably continue until the end of the year, level off and then go back up again," Friedberg says. According to the New Jersey Multiple Listing Service, 6,932 properties sold during the first nine months of the year - slightly down from last year's numbers. The average sales price also dipped, from $603,217 in the first part of 2006 to $590,077 for the same time period, this year. "The 2007 stats show a stability setting in, "says Chen, who also serves as president of the NJMLS. While other parts of the country and the state might be having more difficulty moving real estate, he believes that Bergen is at an advantage because of the diversity of its housing stock - from a $300,000 condo to a multimillion dollar homes. "We can really outmaneuver and outperform any market," he adds. Those slightly lower numbers don't mean that Bergen has lost its blockbuster sales. A $12 million home in Saddle River went into contract with a "celebrity person," in the fall says Steven Klenk, vice president of Pinnacle Custom, which built the mansion. The 18,500 square foot traditional French is on 4.2 acres and boasts 8 bedrooms and 10 full baths, an indoor basketball court, pool and cabana. Pinnacle also built a home on the Alpine's Litchfield Way that went under contract at the end of the year for $6 million. Klenk says this home, on a little more than an acre, is 10,400 square feet, and includes a home theater and gym, a pool and a 5-car garage. And, construction is continuing in Alpine and Demarest at he Frick Estate, where investor Richard Kurtz is building six homes, including a $40 million mansion on 5 acres. That home will boast 27,000 square feet, a movie theater, an indoor basketball court, a wine cellar and a conservatory. Kurtz says he hopes to finish construction by spring 2009. Also for sale, of course, is the original Frick home, a replica of an English country manor on 27 acres with a carriage house, English gardens, an aviary and room for two dozen horses. Kurtz says he has fielded interested calls from several prominent buyers for the $59 million property. "It's beautifully kept," says Kurtz. "We're very proud of it. It's a very special property."