NJ Market Facts
January 3rd, 2013 at 10:13 am by Anthony J. Gonzalez
NJ Market Facts
The local real estate markets in the Garden State have opportunities for both buyers and sellers. Knowing all the facts about local real estate conditions and about New Jersey’s advantages is crucial to making the most of these opportunities.
What’s the Latest?
November Pending Home Sales Rise Again
Pending home sales increased in November for the third straight month and reached the highest level in two-and-a-half years, according to the National Association of REALTORS®.
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 1.7 percent in November from a downwardly revised October and is 9.8 percent above November 2011. The data reflect contracts but not closings.
The index is at the highest level since April 2010 when buyers were rushing to beat the deadline for the home buyer tax credit. With the exception of several months affected by tax stimulus, the last time there was a higher reading was in February 2007.
Regionally, the PHSI in the Northeast rose 5.2 percent in November and is 15.2 percent above a year ago.
November Existing-Home Sales and Prices Maintain Uptrend
Existing-home sales continued to improve in November with low inventory supply pressuring home prices, according to the National Association of Realtors®.
Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, rose 5.9 percent in November from a downwardly revised October, and are 14.5 percent higher than November 2011. Sales are at the highest level since November 2009.
Lawrence Yun , NAR chief economist, said there is healthy market demand. “Momentum continues to build in the housing market from growing jobs and a bursting out of household formation,” he said. “With lower rental vacancy rates and rising rents, combined with still historically favorable affordability conditions, more people are buying homes. Areas impacted by Hurricane Sandy show storm-related disruptions but overall activity in the Northeast is up, offset by gains in unaffected areas.”
Regionally, existing-home sales in the Northeast rose 6.9 percent in November and are 14.8 percent above November 2011. The median price in the Northeast was $232,900, down 2.0 percent from a year ago. Find out more by reading NAR’s press release.
Local and State Market Reports – New Jersey
These metro market reports reflect data available for the 2nd quarter 2012 and provide insights into the fundamentals and direction of the nation’s largest metropolitan housing markets. Each downloadable report evaluates a number of factors affecting home prices, including the local job market, foreclosure rates, housing inventory and debt-to-income and mortgage-servicing-costs-to-income ratios. Click here for written guidance on interpreting the reports, or watch this video issued by the NATIONAL ASSOCIATION OF REALTORS®(NAR).
Commercial Real Estate Vacancies Slowly Declining, Rents Rising
Most of the major commercial real estate sectors show gradually improving fundamentals and are easily absorbing the relatively small amount of new space that is coming online, with a full recovery already in the multifamily market, according to the NATIONAL ASSOCIATION OF REALTORS® (NAR) quarterly commercial real estate forecast.
Lawrence Yun , NAR chief economist, said the market has been slowly building momentum. “Job creation is the key to increasing demand in the commercial real estate sectors,” he said. “The economy is expected to grow 2.5 percent next year, and with modest job creation, assuming there is no fiscal cliff, the demand for commercial space will gradually rise. The greatest friction that remains is a tight credit environment, notably for smaller properties.” Find out more here.
Affordability Rates are Soaring
Data released on May 31 by the National Association of REALTORS® (NAR) supports the attainability of homeownership as the affordability index figures are highest than ever. The current rate of 174.3, indicates that getting that dream home is more attainable than ever. This, combined with low interest rates and a diverse housing inventory, create the perfect recipe for those in a position to buy.
NAR’s affordability index formula accounts for many variables that contribute to how affordable home buying is in New Jersey: home price, mortgage rates, payment as a percentage of income, median family income, qualifying income, and monthly Principal and Interest (P&I) payments. For example, an affordability value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home, assuming a 20-percent down payment.
To learn more about affordability, click here.
Study: ‘Hurdle Rate’ Favorable for Buying
Now is a great time to buy because the “hurdle rate” is very favorable toward home ownership, an academic study by researchers at three universities finds. Learn more in a 2-minute video in which one of the researchers talks about the findings.
Christie Launches Website Detailing Property Tax Records and Other Vital Public Information
In an effort to increase government transparency, Governor Chris Christie recently launched a website that provides the public with data that makes it easier to understand New Jersey’s public finances. Included on this website, www.YourMoney.NJ.Gov, is an interactive map that displays the Garden States’ 3.1 million property tax assessment records. With the new property tax feature, REALTORS® and consumers can check individual records in their town or community, jump from record to record and compare assessments and taxes from one town to another. Be sure to visit the website frequently to provide your feedback and view other reports.
Get the Facts
Despite the national trends and statistics you might have heard, the old adage that all real estate is local has never been truer. Market facts in New Jersey, combined with national incentives, make now a good time to get active in New Jersey’s real estate market. Here’s why:
• Seven-year real estate appreciation in the Garden State — at 37% — is five times the national average.
• Mortgage rates are near historic lows, giving buyers a better chance to secure low payments for years to come.
• Housing affordability – determined by home prices, income data and other factors – is high in New Jersey.
• The NJ Housing & Mortgage Finance Agency (NJHMFA) offers low-interest loans and down payment assistance to first-time home buyers. Find out more about those programs and the Live Where You Work initiative for all eligible buyers.
With unique and attractive neighborhoods, great schools, and other benefits, New Jersey is a great fit for the three rules of real estate – location, location, location. See what makes the Garden State such a great place to live and check out our interactive map to see specific county information and local real stories.
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