From the Press of Atlantic City:
South Jersey’s struggling real-estate market is lagging New Jersey’s construction recovery, an economist told the New Jersey Builders Association on Tuesday.
New Jersey has seen a jump in new-construction permits and five consecutive quarters of rising home prices.
The state sold 85,000 homes last year, the most since the housing boom of 2006.
Nationally, the picture is even better.
But South Jersey is behind the rest of the state in sales, home prices and new construction, said Jeffrey Otteau, president of the real-estate analysis firm Otteau Valuation Group Inc.
He and Michael Wolf, an economist with Wells Fargo Securities, gave their forecast for the building industry for 2014 to construction executives Tuesday at Resorts Casino Hotel.
A cold, snowy winter has not helped. Apparently, buyers don’t go house hunting when it snows.
“We have a weather effect. Seasonality is playing a little role. We expect it to rebound a little but not at the pace of 2013,” Wolf said.
Otteau said total home sales declined by 12 percent in January and February. A similar effect was observed in California, where the decline cannot be attributed to bad weather, he said.
“The market could be fraying at the edges,” he said.
The economy has not recovered from the 2007 recession. The recovery from the technical end of the recession will be in its fifth full year in June, Otteau said.
“Most recessions took 24 months to recover. This one is essentially 5 years old, and we’re still missing jobs,” he said.
“The market is sensitive to where you live in New Jersey. Central and northern New Jersey have done better,” he said. “But home values are up, housing permits are up. And that will go up again this year.”
Builder Dean Mon, of Sea Girt, Monmouth County, said the industry picked up speed last year after years of stagnation following the 2008 home-mortgage crisis.
“We’ve picked ourselves off the floor. Provided everything goes as expected, we should be OK,” he said. “We doubled the housing starts last year. And now the economy is beginning to pick up a little.”
A stagnant housing market continues to dog South Jersey. While most of central and northern New Jersey’s real-estate market has recovered, Atlantic, Cape May and Cumberland counties are considered in distress, Otteau said.