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New Jersey Real Estate Market: When Will Home Values Return?

If you’re expecting home values to return to New Jersey in the near future, you may be waiting a long time. Although it is evident that home values in New Jersey have definitely bottomed out, Fiserv Case-Shiller Analysis estimates that home values will not return to their 2006 peak levels until 2016.

Slow, Steady Growth Expected

Real estate analysts expect home prices to creep up about two percent this year; although this may not be news to scream from the rooftops, the slow, steady growth is a good sign, particularly for New Jersey home owners, who watched helplessly as their home values went into free fall over the last several years.

Many experts predict the first real signs of a recovery in home sales will occur over the next five years. Home values throughout New Jersey have toppled nearly 18 percent since the market’s peak in 2006.

Foreclosures, Unemployment Continue to Plague the Market

Foreclosures continue to flood the New Jersey housing market, and high unemployment rates add to this problem. In addition, the high unemployment rates have many would-be homebuyers sitting on the sidelines waiting for their luck to change in the job arena.

Home sellers in New Jersey are still pricing their properties rather competitively, although the reluctance of lenders to give mortgages to unqualified buyers has further stalled this already-beaten down market.

Affordably Priced Home Sales Remain Competitive

Many real estate experts predict that the more affordably priced homes will continue to show the most activity. The federal tax credit has helped this sector of the market to remain rather competitive. The luxury home market, however, may never fully recover, as baby boomers continue to downsize to smaller homes, and younger buyers are unable to afford the high prices.

The median home prices for Southern New Jersey, for example, went from $267,700 in 2007 to just $221,300 in 2009. The second quarter of 2010 dropped even further to $218,700.

Amidst all of the bad news across the real estate sector comes data that New Jersey was just one of three states to post a gain in sales during the first quarter of this year, according to the National Association of Realtors. The other two states were Michigan and Wyoming. New Jersey’s annualized sales rate was 120,600 homes in the first quarter of 2010. Nationwide sales of existing homes during the same time period fell 14 percent.

Overall, New Jersey has seen its better day in terms of home values. However, if sales continue to steadily increase, your home in the Garden State may likely see home values return to their peak by 2016.

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