Housing construction slumps statewide

From the Record:

Highlands cools off as new housing hot spot

Finding a new home in the Highlands may get a bit harder.

Town houses and condominiums are going up and are for sale near major highways. But the pace of building large-scale housing complexes has slumped, mirroring the downturn in the national housing market.

A key economic sign of what’s happening in the Highlands is that New Jersey’s largest housing developer, K. Hovnanian, pulled up stakes at proposed development sites in West Milford, Mount Olive and Hackettstown.

“A lot of land that we bought at higher prices no longer made sense for us to build,” K. Hovnanian spokesman Doug Fenichel said in December. In large part, he added, that’s because “The [state] regulations make it very hard to build homes at a reasonable price.”

As Fenichel notes, more than a soft housing market has slowed development in the Highlands.
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“A lot of development plans have been withdrawn due to changing conditions,” said Ross MacDonald, an economic planner at the New Jersey Highlands Council. He attributes that to national and state home sales trends more than to the Highlands regulations. “Housing starts are down 24 percent nationwide,” he noted.

Statewide, housing construction was down 14 percent as of September compared with 2005, according to the state Department of Community Affairs.

The statewide drop-off in new construction took a further dip in the fall and approached 18 percent by the end of the year, said Patrick O’Keefe, executive vice president of the New Jersey Builders Association. “I expect it to continue to decline well into, if not throughout, 2007,” he added.