NJ home prices trail the rest of the nation
Home prices are rising in New Jersey, but they are still more than 20 percent below their peak in 2006.
A report from researcher CoreLogic shows prices were up almost 3 percent in New Jersey in May, compared to a year ago at that time, but we still lag behind many other parts of the nation. The report indicates the Garden State's home prices are 21.4 percent below the state's June 2006 high point.
Economic researcher Patrick O'Keefe of CohnReznick in Roseland said New Jersey's economic growth in general trails the rest of the country, but the main reasons for the home price drag are the high number of foreclosed properties up for sale, and mortgages that are either already in the foreclosure process or 90 or more days in arrears on their payments.
"People are both unwilling to list their homes and are unwilling to buy, in many cases, because they fear that their prices will be undercut when these distressed mortgages finally go to market," O'Keefe said.
Another reason is that New Jersey's population growth is also struggling to keep up, just half the national average, keeping homebuying demand lower as well.
"When you put all of those things together -- the slow growth, particularly slow income growth, high level of distressed mortgages -- it weighs down on the price in the marketplace," O'Keefe said. "People look and they have to ask themselves, 'Will we be making an investment that we can sustain?' if people are concerned about their job security."
But there is a bright side, according to O'Keefe.
"There are lots of factors to constrain the improvement in prices here, but the one thing that we can take some solace in is the fact that prices are increasing," he said.