New Jersey Real Estate Report

From MSN:

Home prices almost never go down

Beginning in the 70s and into the 80s, baby boomers who were coming of age and entering the housing world fueled a boom, so home prices generally rose (as did mortgage rates). An economic downturn began in 1990, but it was pretty mild; unemployment peaked in 1992 and home prices were already beginning to rise again.

Then there was the Great Financial Crisis, the big bad wolf. From the end of 1991 up until what would become the early aughts of the crisis, you can see home prices rising. It’s a slow burn at first, but by the early 2000s, home prices are leaping. In 2004 and 2005, values were seeing double-digit increases. But of course that all came to an end, because as housing was becoming more and more unaffordable, lending was crazy. “There was no money down and liar loans,” as “Poison Ivy” Zelman once told me. Zelman was one of the only analysts to call the housing crash in 2006 as it was developing and before it turned into the financial crisis. 

Home prices nosedived and didn’t really begin to recover until 2012. Even so, given the severity of the crash, which saw multiple large lenders filing for bankruptcy and millions of homes foreclosed on, you might have thought it would be worse.

“By my count, there have been just seven down years for the U.S. housing market over the past 75 years,” Ben Carlson, author of A Wealth of Common Sense, a well-recognized blog on all things wealth and finance, wrote recently on why housing is everyone’s favorite investment. “That’s losses just 9% of the time. And five of those seven years occurred after the housing bubble popped.”

More than a decade later, here we are. Home prices have only gone up since—exponentially so during the pandemic. Interestingly enough, in this latest cycle, mortgage rates soared in a small echo of the 1980s, and home sales plummeted, similar to the financial crisis. But home prices haven’t really fallen. The latest reading showed home prices rose 5.4% in June from a year earlier, another all-time high, despite showing signs of slowing. 

Either way, it doesn’t seem as though home prices will fall anytime soon, even if they’re no longer rising as rapidly as they had during the pandemic. Housing policy analysts, urban economists, regular economists, and even some real estate executives will mostly tell you why with one single reason: there aren’t enough homes. The deficit of homes in this country didn’t happen all of a sudden. It’s the result of years of underbuilding, and in some places, decades of policy failure that made it almost impossible to build anything but single-family homes, thanks to zoning and land-use regulation all controlled by localities. That was all happening before the pandemic housing boom, which only worsened things and helped. Housing crises that had been somewhat contained to coastal, blue states spread. 

From Barrons:

U.S. Pending Homes Sales Slip to Lowest Level on Record

The number of homes going under contract in the U.S. fell back sharply in July, reaching its lowest in decades as soaring prices bar many Americans from the housing market.

Here are the main takeaways from the National Association of Realtors’ report released Thursday:

—The pending home sales index, a leading indicator of house sales based on contract signings, dropped 5.5% on month to 70.2 in July. That marks the lowest level since the index began to be compiled in 2001, and bucks economists’ expectations for a slight rise on the month. A reading of 100 marks the level of sales in the year the index began.

—Compared with a year earlier, pending sales were 8.5% lower.

—“A sales recovery did not occur in midsummer,” NAR Chief Economist Lawrence Yun said. Job growth offered some succor to the housing market, but this was more than offset by high prices, as well as by a wait-and-see attitude among some potential buyers ahead of November’s presidential elections, Yun said.

—All four regions of the U.S. booked lower pending home sales over the month. The Midwest and South recorded the sharpest decreases, with the West and Northeast booking gentler declines.

—A combination of elevated mortgage rates and high prices has made home-buying unaffordable to millions of Americans and pushed many buyers out of the market. Housing has emerged as a central issue of the elections, with the Democratic and Republican parties alike promising to boost housing stock and bring prices down.

From the NY Post:

Home prices have risen a whopping 79% in five years in this state — and it’s nowhere near Florida or Texas

Homebuyers are grabbing their winter gear and flocking to far-flung Maine — where they’ve managed to drive up the median home price a bone-chilling 78.5% in just five short years, a new report reveals. 

According to freshly published findings from industry news site Pro Tool Reviews, The Pine Tree State has experienced the most significant increase in median home prices of any of the fifty since 2019 — jumping from $219,000 to $391,000.

The explosive growth comes in spite of the fact that Maine’s population has trickled upward a mere 0.32% since 2008, according to research conducted by Pew Charitable Trust — well below states like Texas (1.52%) and Florida (1.34%), better known for their heated housing markets in recent years.

Neighboring New Hampshire slid into second place on the list, experiencing a 76.4% rise in average residential real estate prices since 2019. 

The new wave of northern New England homesteaders don’t appear to be struggling to make their purchases either — The Granite State ranked highest for size of downpayment, boasting $72,750 on average.

Another state in the region took third place on the overall list — Rhode Island, which experienced a 73% jump.