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NJ Housing Sales, Appreciation Cooling Off
Business Brokerage The once-hot housing market is still warm to the touch, say real estate experts. But New Jersey property owners should expect a slowdown in sales, they say, along with a slower appreciation in property values over the coming year.
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Forex Broker "It's been a record year across the country in terms of the number of homes sold and the average sales price," said John Burke, president of the 1,550-member Mercer County Association of Realtors.
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Online Brokerage The slowdown is a result of the length of time it takes to sell a house.
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Real Estate Broker In the spring of 2002, it took about three days to sell a house and by the end of the summer it took about 60 days for a sale, said Jeffrey Otteau, owner of the Otteau Appraisal Group, an East Brunswick-based real-estate appraisal company.
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Agency Brokerage Spark However, many of the conditions that made the past two years good for home sales are still in place.
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Business Broker "For the first time in history a weak economy translated into increased home sales up through the summer of 2002," said Otteau.
Brokerage Account Behind the quicker time frames for sales were declining interest rates, which translated into more purchasing power for home buyers, he said.
Stock Broker Otteau said mortgage interest rates dropped about 1.25 points during the year, allowing buyers to bid up the price of homes without a commensurate increase in their monthly mortgage payments.
Brokerage Online Stock Trading Otteau also cited a shortage in housing as compounding the explosive demand in the market. During this boom period, there were 20,000 fewer housing starts annually compared with the last boom cycle in the 1980s, he said, adding that because many corporations stayed in the state during tough times, potential housing inventory remained occupied.
Broker Justin Ticket For example, the brokerage company Merrill Lynch saw its employment numbers fluctuate during 2002, but remained the area's largest employer. The company employs about 7,500 people in the Princeton area, down from 8,000 in 2001.
Real Estate Brokerage During the past year, 600 employees were transferred to the Hopewell Township campus from Denver, where the brokerage closed an office early in 2002. The company also has been consolidating local operations, moving jobs out of Plainsboro and West Windsor, and trimming thousands of jobs companywide.
Commodity Broker Merrill Lynch's decision to maintain a strong presence in the Princeton area has helped keep housing off the market and support area prices.
Brokerage House Realtors also said a volatile stock market sent money into the bond markets, which further pushed rates down and increased demand for real estate.
Real Estate Broker Exam "All these things were playing out up until this summer," said Otteau.
Brokerage Services Several factors have contributed to the softening of the market: Sellers have been expecting increasing prices, but stabilized interest rates have led buyers to resist asking prices.
Broker Live Ticket Otteau predicts home prices will rise from 3 percent to 8 percent in the coming year, a significant slowing compared with the sizzling 10 percent to 15 percent increases seen in the last two years.
Online Brokerage Firm A strengthening economy could mean rising mortgage rates, which would lower housing affordability, Burke said.
Security Broker Dealer Demand for real estate is likely to remain high over the next year because New Jersey is one of the most densely populated areas - a fact that inhibits affordable housing.
Coldwell Banker Residential "There are areas where housing is affordable but they are becoming fewer and fewer," Burke said, adding that in New Jersey it is difficult for a couple to afford a home without dual incomes.
Freight Broker Affordable housing can still be found in Burlington County, Burke said, describing the area as a suburb of both New York and Philadelphia. "People are commuting farther to get affordable housing," he said.
Freight Brokerage By Laurie Whalen
Trenton Times - 1/30/2003
Topic: Sprawl
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