There’s no question that New Jersey is an expensive state to live in. Yet many residents say they are not willing to live anywhere else, even if it’s more affordable. The reasons why people pay the high cost of New Jersey living are plentiful: fantastic beaches, elite schools, exceptional health care, outstanding restaurants and low crime rates. What people are paying for, in essence, is quality.
Still, the housing market has been slow to recover, leaving some residents concerned. In 2015, the average home sale price was $397,279, according to the Division of Taxation. However, many townships in NJ continue to see average sales compared to the pre-bubble peak. In fact, NJ housing prices lag behind the national numbers.
Distressed Mortgages Highest in Nation
For the last nine quarters, New Jersey’s distressed mortgage rates have remained the highest in the nation. Distressed properties have been slow to recover due to several factors. First, compared to the rest of the country, housing prices were substantial before the housing crisis and have taken longer to come down.
The state has also been hit with a high number of foreclosures. There is a lot of work to do, fixing up these homes and getting them back on the market. Lastly, the high development costs and zoning restrictions make building new construction homes more difficult.
Signs of Growth in the NJ Property Market
What will help Jersey’s housing market grow? For one, it’s the millennials. In 2016, national housing prices finally surpassed the previous 2006 peak, mortgage rates remained low and the millennials started to enter the market. At large, the millennials are slow to make big purchases, houses being at the top of their list. However, as this generation matures, they are entering the housing market.
Additionally, in 2015, approvals for new construction homes were the highest they have been since 2006. This is another indicator that NJ’s property market will see some growth, though not as fast as the rest of the country.
What the Housing Market Means for You
It all depends on where you are in the housing market. If you have an underwater property, you’re probably reluctant to sell your home at a reduced cost. If you’re looking to buy, the low mortgage rates and competitive housing prices can be a motivating factor.
If you see the property market as a chance to make money, now is a great time to get in. There remains a large number of foreclosures that can be fixed up and flipped to a younger millennial couple just starting out. Thanks to hard money lenders, you don’t have to wait for your credit score to increase or enough money to bid on a home. You can work with a private lender to get the real estate funding you need for this highly competitive and lucrative industry.
Bottom line: The New Jersey property housing market will grow. It’s growing everyday. It may not be as remarkable as other parts of the country, but from where we were a few years ago, we can finally see the horizon.