NJ Home Prices Slow to Increase [AUDIO]
The housing market continues to move in a positive direction. U.S. home prices were up 12.1 percent in April, the largest gain since February 2006. According to real estate data provider CoreLogic, prices rose last month from the previous April in 48 states. In New Jersey, prices are headed upward, but at a slower pace.
"Basically what's driving this is more buyers than sellers," said Walter Molony of the National Association of Realtors. "We've got a supply imbalance that's tilted clearly toward sellers in most of the United States. The problem has been insufficient levels of housing construction, which has been about half of what it should have been which is now creeping into shortages. We did a bit of overbuilding during the boom, we more than overcorrected during the bust period and now we're getting to the market healing. But we do need more inventory to keep prices from rising at double-digit rates."
More people are looking to buy homes, but the number of homes for sale is 14 percent lower than it was a year ago.
Rising home prices can help sustain the housing recovery by encouraging homeowners to sell.
"People have gained confidence, we've seen some job creation. People who have been on the sidelines are getting into the market. Some who were upside down on their mortgages are now in positive equity position and we're expecting to see that pattern continue," said Molony. "For all of this year we're expecting to see prices up 8 percent, which is way above normal. Usually, in a balanced market, prices increase one or two points above the rate of inflation."
As for New Jersey, it's a mix.
"We're finding most of New Jersey seeing prices up with the exception of Edison, in terms of the areas we're tracking," said Molony. "Prices are appreciating in New Jersey more slowly than the rest of the nation. There seems to be a bit more supply which is keeping a bit more balance in much of the state."