NJ Home Sales Up 25% YTD (Click for graph)
Home sales continued to surge in March as combined purchase-contracts for resales and new homes rose by 20% in March. YTD sales are now running 25% ahead of 2011 through Q1 2012 due to the combined effects of higher consumer confidence, low home prices and low mortgage rates. Another key driver for the increase is that home purchase affordability in New Jersey rose from 131% in Q4 2011 to 136% in Q1 2012, resulting in record high purchasing power for home buyers.
Through the first 3 months of 2012, home buyers have signed contracts to purchase 17,683 homes compared to 14,104 during the same period in 2011. Still more positive news comes from Unsold Inventory in New Jersey which stands 17% lower than one year ago. At the end of the 1st quarter there were 60,965 homes being offered for sale compared to 73,263 one year ago. This reflects a reduction of 12,298 homes including both resales of existing homes and new construction. The combined effects of a 25% increase in purchase demand with a 17% decline in Unsold Inventory are expected to stabilize home prices in 2012 and lead to modest price increases in 2013. One cautionary note is that sales pace has slowed in April due to rising asking prices.
Home buyers remain highly resistant to price increases at this stage of economic recovery which appears to be reducing the sales pace this month. Also affecting the April sales pace is that both Easter and Passover occurred during the month which had the effect of deferring some purchase demand into May.