From the Record:
A growing demand for housing will push up New Jersey home prices about 5 percent a year for the next several years, appraiser Jeff Otteau predicted Tuesday.
The state’s slowly improving job picture is “like oxygen to the housing recovery,” Otteau said at a seminar in East Hanover for real estate agents.
Otteau, an East Brunswick appraiser who researches real estate statewide, said the state is on track to add about 40,000 jobs this year, after adding more than 66,000 last year – the highest number in more than a decade. However, New Jersey’s unemployment rate was still 8.5 percent in August, compared with a national rate of 7.3 percent. Moreover, the state lost jobs in July and August, though Otteau said that was largely the result of sluggish hiring at the shore because of damage from Superstorm Sandy.
Bergen County is among the areas leading the way in the housing revival, with a five-month supply of homes for sale, said Otteau, whose reports are widely followed in the industry. A supply below eight months generally results in rising prices. Passaic has a 6.4-month supply.
Eight of the 21 hottest markets in the state are in Bergen County, according to Otteau: Glen Rock, Wyckoff, Midland Park, North Arlington, Ridgewood, Emerson, Mahwah and Ho-Ho-Kus.
Otteau’s optimistic outlook was matched Tuesday by new data from the S&P/Case-Shiller home price index, which said that prices in the New York metropolitan area, including North Jersey, rose 3.6 percent from August 2012 to August 2013. Nationally, home prices were up by a more substantial 12.8 percent year over year. Both nationally and in the region, prices are back to the levels of mid-2004, and about 20 percent below the housing-boom peaks of mid-2006.
The area’s home prices have not been rising as quickly as national averages recently in part because they didn’t fall as far during the housing bust, and have less ground to make up. In addition, the foreclosure process in the region is among the slowest in the nation, leaving an overhang of distressed properties that put downward pressure on prices.
Otteau said that several New Jersey housing markets are still suffering, including the market for 55-and-up housing; the market for homes priced above $2.5 million, and markets in South Jersey and Sussex County, which are far from job centers. With gasoline above $3 a gallon, home buyers don’t want long commutes, Otteau said.