From the Star Ledger:
Although the number of homes in foreclosure or struggling to make mortgage payments in New Jersey has been slowly dropping, it hasn’t been translated into a rise in home sales.
Sales of existing homes rose in April, according to data released yesterday by the National Association of Realtors. Nationwide, resale activity was 9.7 percent above April 2012, but only 4.9 percent in the Northeast region, which includes New Jersey.
Distressed homes — properties that sold in foreclosure or for less than the mortgage was worth — accounted for 18 percent of April sales, according to NAR, down 28 percent from last year. Eleven percent of April sales were foreclosures, and 7 percent were short sales.
A study being released by the real estate company Zillow this morning, however, notes that nearly 40 percent of northern and central New Jersey homeowners can’t put their houses on the market because of insufficient equity.
About 17.5 percent of homes in the 12 counties that make up the central and northern parts of the state tracked by Zillow are at least 90 days behind on mortgage payments, Zillow found. But an additional 21.4 percent don’t have enough equity in the home to afford a down payment and closing costs on a new house, tying them to their property and limiting the number of homes on the market.
Zillow Chief Economist Stan Humphries said without enough equity, those costs come out of a homeowner’s pocket, “leaving many still stuck. Looking at the effective negative equity rate could explain why recent, healthy declines in the number of underwater borrowers haven’t yet translated into more homes for sale.”
The percentage of homes with insufficient equity to move ranged from 47 percent in Hunterdon and Hudson counties to 31 percent in Morris County.
Humphries said “the only cure is patience, as rising home values continue to build equity to the point where more homeowners can realistically sell.”