From the Star Ledger:
Slowly but steadily, New Jersey’s housing market is recovering.
The average home sale price in New Jersey in 2015 was $397,279, according to the state Division of Taxation. But most towns throughout New Jersey are still showing average sales below the pre-housing bubble peaks.
“We’re not out of the woods yet,” said Tg Glazer, president of the New Jersey Realtors Association. “There’s still work to be done, but everything is looking very positive and I believe that things will continue to move forward throughout the year.”
Figures from the New Jersey Realtors Association for 2015 show home sales rose 12.3 percent to 93,635 and there were small upticks in the median and average sales prices, according to figures from the New Jersey Realtors Association — a hopeful sign as the spring selling season gets underway.
The 22.7 percent jump in pending sales in December over the year before pointed to 2016 getting off to a strong start. But even as job gains, low mortgage rates and consumer confidence help boost home sales, the number of homes for sale has fallen.
In December, for example, there were 10.6 percent fewer listings — 49,829 compared to 55,720 at the same time in 2014.
“Our economy and housing sector are both better than where they were in the recession, but both have a ways to go before anybody would want to cheer at the pace of activity,” said Patrick O’Keefe, director of economic research at CohnReznick, an accounting and consulting firm.
Even though home prices are showing signs of increasing, there is still a large number of homeowners who are underwater on their mortgages and are reluctant to sell at a loss, he said.
“If they bought from 2005 to 2007, they paid prices that were still well above where the market is today,” O’Keefe said. “As a consequence, if they list their homes for sale, they’re going to get offers well below what they paid and unless it’s a distressed situation where they have to move, it would be irrational to sell the house at the discounts.”
New Jersey housing prices continue to lag behind the national average, he said, citing the housing price index calculated by the Federal Housing Finance Agency.
Nationally, prices in the last quarter of 2015 were 0.3 percent higher than in 2007, while New Jersey’s prices were 13.8 percent less. But compared with New Jersey’s own peak in the second quarter of 2006, prices are down 21.3 percent.
“Those price factors are a major reason why the state’s housing recovery has lagged the rest of the country,” O’Keefe said. “Our prices ran up more sharply prior to the housing meltdown and have recovered far more slowly in the aftermath of the meltdown.”