Earlier this spring and summer the New Jersey housing market was going like gangbusters, but some homeowners are now complaining about a glut of product on the market.

And that means things have turned around — from a seller’s market to a buyer’s market.

According to real estate expert Jeff Otteau, the president of the Otteau Valuation Group, there are a couple of things at play here.

He said there is seasonality to the housing market and “the strongest demand for home buying typically runs from February through June.”

The reason he said, is the majority of home buyers have children, “and they’re looking to time their move so that they move from their old house to their new house in the summer months and have their children settled before the new school year begins. Once we get into August, September and October, there is a noticeable slowdown in demand for houses.”

But there’s a larger force at work as well.

Otteau said many home sellers “have not accepted or are not aware of the fact that the New Jersey housing prices are not where they once were.”

He pointed out nationally, homes prices are now 5 percent higher than they were during their pre-recession peak, but in New Jersey home prices are still 15 percent below where they were back in 2006.

“When a lot of sellers decide to sell, they may not know about this, or may not be willing to accept it, and over-pricing is very different from a weak market,” he said.

Why are home prices up slightly nationally, but down in the Garden State?

Otteau said it’s a combination of factors.

He pointed out the New Jersey economy has underperformed the entire nation since the recession. We were the slowest state to recover the jobs that were lost. Household income has gone down, and we have the highest taxes, so the bottom line here is simple:

“It is the investment of capital that drives an economy, and the people who have money to invest, who have capital to invest prefer not to do it in New Jersey because of all of the adverse conditions."

So what does this all mean?

“There is a continuing strong market in New Jersey, but buyers are not willing to pay more than what a house is worth today," Otteau said.

At the same time, Otteau said, there are pockets of weakness in the Jersey housing market.

“For the most part the market that has the most inventory in the state today is Salem County, followed by Cape May County, followed by Atlantic County and followed by Sussex County. These are the outlying and rural parts of the state where there still continues to be a relatively high number of houses on the market," Otteau said.

He said in the central core of the Garden State there is not a housing glut, except for a few pockets “where sellers are universally collectively over-pricing their homes.”

“They sometimes get confused into thinking that, well there’s not a strong market for my home, but the reality is they’re right at the price they’re asking — at a reasonable price, houses sell quickly today," he said.

For the rest of this year, Otteau said “we should continue to see a healthy real estate market here in the state, pretty much statewide, even in the places where there’s high inventory market conditions are still far improved from where they were five years ago.”

You can contact reporter David Matthau at David.Matthau@townsquaremedia.com.

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