From the APP:
It’s been six years since the housing bubble collapsed, but foreclosures still weigh on New Jersey’s real estate market, according to a report released Wednesday.
The state’s share of distressed mortgages, the highest in the nation, is the main reason its housing prices have failed to keep pace with the nation, said Patrick J. O’Keefe, the report’s author and director of economic research for CohnReznick, an accounting firm.
“I don’t think there’s anything in the data to suggest things are getting worse,” O’Keefe said. “What we can say is they are not improving as rapidly, all things being equal, as they should be.”
The report provided more evidence that New Jersey’s economy is recovering from the recession more slowly than the rest of the nation.
The housing market has been trying to regain its footing after homeowners in 2007 began defaulting on loans they couldn’t afford, sparking a global financial crisis that saw the U.S. bail out banks, the unemployment rate soar and New Jersey home prices tumble more than 20 percent.
New Jersey’s housing market has stabilized, thanks in part to record-low mortgage rates. Real estate agents at the Shore talk about the lack of inventory. But the state’s foreclosure rate has remained persistently higher than the rest of the nation.
The report found New Jersey is chipping away at its foreclosure rate; 7.9 percent of mortgages were in foreclosure at the end of 2013, down from 9 percent at its peak in the first quarter of the year.
Still, at the end of the year the state had the nation’s highest share of distressed mortgages — loans that were 90 days late or in foreclosure — 11.8 percent. And the state ranked 40th nationwide in annual housing appreciation.
New Jersey home prices have increased 3.6 percent since they bottomed out during the first quarter of 2012, but remain 17.7 percent below their peak in 2006.
By comparison, home prices nationwide have risen 14.5 percent since they hit bottom in the middle of 2011, but remain 8.9 percent below their 2006 peak, O’Keefe said.
One real estate agent said the state’s high foreclosure rate still amounted to a relatively small portion of the overall market, and it hasn’t had a big impact on sales of single-family homes.