by Francine Lichtman, Real Estate Sales Associate
As many of you know, our local area has certainly struggled with lower sales prices for homes. There have not been quite enough buyers out there who are ready, willing and able, and many have had personal doubts around timing for a sale or purchase. Despite these challenges, the decline in NJ home prices is running at a much lower pace than the rest of the country.
If you compare our price declines (-7.00% in the past year) to other declines in places like
Nevada (-28.24%), Florida (-23.96%), California (-25.52%) or Arizonia (-20.56%), we can quickly see that things are much worse in other places. Another strength that puts New Jersey above the crowd is that even though the state has seen significant job loss over the past decade, we continue to have the second highest median income in the U.S. along with the greatest population density. The combined efforts of our high income coupled with lower prices and low interest rates have pushed housing affordability back over 100%, which it has not seen in many years. As a matter of fact, in 2006, our housing affordability was at 81% and we are now looking at 110%. This means that the NJ homeowners can now afford to pay their mortgage and their bills on their current salaries. This is a good indicator that the market recovery in this area will begin in earnest as soon as the job market improves.
Another indicator is the lower foreclosure rate. In February, NJ foreclosure filings dropped 33%. The national foreclosure rate is triple that of NJ.
~ Prospective home buyers, take note ~
Your purchasing power will begin to decline in 2010 when home prices end their decline and interest rates begin to rise.
Tags: housing market, Real Estate, Realtor, Realtors