From the Record:
After treading water in 2014, New Jersey home prices will get a boost from low mortgage rates and an improving job market this year, appraiser Jeffrey Otteau predicted Tuesday.
Otteau, an East Brunswick appraiser whose forecasts are widely followed in the real estate industry, expects home values to rise about 3.5 percent this year, compared with an anemic 1.4 percent in 2014. He also expects this year’s spring market – traditionally the busiest time to buy and sell – to be active.
“If we continue to see strong job creation in the state, it will translate into home purchase demand,” Otteau told more than 130 real estate agents at a seminar in East Hanover.
In January, New Jersey employers added 12,400 jobs – a bright start to the year, although Otteau and other analysts have cautioned that the state’s employers may not be able to keep up that pace. New Jersey added a total of 35,500 jobs for all of 2014 and, unlike the nation as a whole, still has not recovered all the jobs lost as a result of the 2007-2009 recession.
The housing market has been slowly recovering since prices and sales volume cratered several years ago. But New Jersey values are still well below the peaks reached in the housing bubble, and won’t return to 2005 levels until about 2025, Otteau said.
“Prices went up too fast, and we’re still paying the price,” he said. In addition, incomes have been flat.
“More people are working, but they’re not earning enough to be able to afford homeownership,” Otteau said. “We are not able to generate the same level of economic opportunity we once could in the U.S. and New Jersey.”
The best-performing housing markets in the state are those closest to New York City jobs, and other employment opportunities, Otteau said. “Where there are jobs, everything is better,” he said. And towns along commuter rail lines, including Glen Rock and Ridgewood, have experienced strong demand, he said.
Although foreclosures remain an issue in the state, Otteau said that the problem is mostly confined to urban and rural areas, as well as some shore towns hurt by superstorm Sandy.
“Suburban towns have very little foreclosure inventory, and will not be affected,” he said.