From the New York Times:
HOMEOWNERS and sellers of New Jersey, are you sitting down? You are about to read a recent state housing-trend analysis that’s not half bad: Overall sales are up; inventory is down; and, after three years, home prices may be on the verge of halting their decline.
In June, according to Jeffrey G. Otteau, whose company issues monthly reports to the real estate industry, there was a “breakthrough”: the number of home sales exceeded that of June 2008 by 12 percent. Such a year-over-year increase has not occurred since midsummer 2007, said Mr. Otteau, the president of the Otteau Valuation Group in New Brunswick.
It does not mean that the state’s economic troubles are over, Mr. Otteau said in a recent telephone interview.
Generally, he said, home prices tend to stabilize when there is a six-month housing supply. “We are getting very close,” he said, noting that the total number of homes on the market in the 21 counties that his company monitors had sunk to about the same number as were listed in 2006, before the market fell to its knees.
In June, there were 25 towns with a four-month supply, or less, according to his company’s data. These communities are scattered across 6 counties (10 in Bergen, 6 in Essex, 3 in Middlesex, 3 in Union, and a town each in Morris, Mercer and Passaic.)
Notably lacking from that list is Hudson County. Although it had the strongest market of any county until the Wall Street crisis last fall, the area is still lagging. So far this year, it has had 28 percent fewer sales than the corresponding period in 2008.
At least its sales pace has increased each month since January. In June, the inventory was down to 11.5 months, from 19. Still, that was only at the lower prices. Among homes priced above $1 million, Hudson had a 52-month supply, most of them waterfront-area condominiums.
In all counties except Passaic, the new data showed that the sales pace is slowest for homes priced over $1 million. In Passaic, the largest inventory — a 27-month supply — was for homes priced from $600,000 to $1 million.
Statewide, there is an 18.6-month supply of homes priced from $1 million to $2.5 million, and a 35.8-month supply of homes listed at $2 million or more, these numbers show.
“In general,” Mr. Otteau said, “fewer homes are being put on the market so far this year compared to last.” In June, there were 14 percent fewer new listings than a year before. Part of the reason for that, he acknowledged, is that some people gave up hope of selling their homes in a harsh market and decided to wait. Also, builders have put up fewer new houses this year.
Hudson County had 18 percent fewer new listings. And even Monmouth County, where homes in oceanfront communities inevitably swell the listings during the summer, had 8 percent fewer new listings this year than last.
“Do these very positive housing market numbers in June mean that we suddenly don’t have an economy in trouble, and unemployment up around 10 percent?” he said. “No.”
But unemployment is a “trailing indicator” of trends, he said, and while the housing market is only one measure of what lies ahead, in New Jersey its signs bode well.