NJ Bucking National Housing Trends, Which is Both Good and Bad
TRENTON — Median home prices continue to rise above pre-recession levels nationally, though at a slower pace through the second quarter of 2018, but several key areas of New Jersey are lagging behind those figures.
The Q2 2018 U.S. Home Sales Report released Thursday by ATTOM Data Solutions finds home price appreciation decelerated for the fifth consecutive quarter this spring, but more than half of the 122 U.S. metro areas the group surveyed had median sales prices above where they were before the recession hit near the end of the last decade.
The Atlantic City and Trenton markets, however, were not among those.
"Things are getting better, but the thing that sticks out on the home prices with those two cities in New Jersey is that they're still quite a bit below the pre-recession peak," Daren Blomquist, ATTOM senior vice president, said. "Atlantic City is way below, it is 36 percent below its pre-recession peak back in 2006, and Trenton is still 18 percent below its pre-recession peak way back in 2007."
Blomquist said there was some volatility in Trenton early this year, with home sellers taking a loss versus what they originally paid as of the first quarter, but making $15,000 on the average sale in Q2.
The news is not so rosy in the Atlantic City-Hammonton market, which came in last with a $12,500 loss per home sale. But that just goes to show how bad the housing situation had gotten previously; the median home price year-over-year in AC actually increased upwards of 12 percent.
"Layered on top of that, the economic issues that the city has experienced, even past the recession nationwide, are continuing to linger and affect home values and home prices," Blomquist said, referencing the city's long-running casino industry downturn that reached its nadir with the closure of five gambling houses between 2014 and 2016.
One potentially concerning issue is that homeowners nationwide who decided to sell during the last quarter had stayed in their homes for slightly more than eight years, the highest average homeownership tenure since ATTOM began tracking at the beginning of the year 2000. In Atlantic City, the number was significantly higher, at 9.6 years, even if that rate is also on the decline.
"People stay in their homes longer, and in places like Atlantic City and Trenton and other parts of New Jersey, because home prices haven't recovered, we are seeing people stay in their homes longer," Blomquist said.
According to Blomquist, the increased homeownership tenure locks up inventory that would otherwise be available to first-time homebuyers. But if a prospective buyer is willing to go "against the grain," as he said, New Jersey remains an attractive market in many parts that, at its still-low home prices, could pay dividends down the road.
New Jersey also showed some strong numbers in terms of cash sales, Blomquist said, which ran counter to national tendencies as well.