NJ homebuilding off to a strong start for 2015
After a strong finish to 2014, residential construction in New Jersey started 2015 on a positive note. Homebuilders drew 1,740 building permits which was just shy of the best January since 2007.
Lending standards, including mortgage interest insurance and downpayments, are easing up, interest rates remain low and there are more first-time homebuyers entering the market, according to David Fisher, president of the New Jersey Builders Association.
"There is pent up demand for new construction because of the long recession that we had. In certain market regions in New Jersey, new home prices are inching up which bodes well for the industry heading into the spring," Fisher said.
Since December 2014, the total number of permits issued in January fell 10.4 percent. That decline was partially due to severe winter weather as single-family authorizations were off 9.4 percent. The month saw an 11.1 percent decline in multifamily permits which was Fisher said is unsurprising given that 2014 saw more attached-housing authorizations than any year since 1973. Multi-family approvals still accounted for 57.4 percent of January's total, compared to 61.2 percent for all of 2014.
There is a good balance in the market in New Jersey depending on where you are.
"We still see rental communities being constructed and there is demand for that. In many parts of central and northeastern New Jersey, there are quite a few townhome and multi-family communities being constructed to serve the market, especially younger buyers. There are also some single-family communities that have started," Fisher said. "South Jersey lends itself more so to the single family market because there is more available land. But, we are seeing all parts of the market coming back, including the active adult market."
Compared to January 2014, approvals increased by more than one-quarter, or 24.5 percent, due to a modest rise in detached-unit authorizations and a substantial gain, about 46.3 percent, over last January's multifamily approvals.
When it comes to trends, homebuyers are still looking for energy-efficient homes with modern materials and appliances.
"There is a trend for more green building products and buyers want efficient housing without too much expense," Fisher said. "Most economists believe permits will be up and probably exceed the 30,000 mark which would be a great accomplishment for the industry which has been down for so many years."