Report N.J. housing market on faster road to recovery

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Unsold inventory shrinking faster than national average, findings indicate.New Jersey’s housing markets are recovering faster than elsewhere in the nation, and June 2009 saw the sixth straight month of increasing home sales, according to a market report released Thursday by Jeff Otteau, president of East Brunswick-based Otteau Valuation Group. About 8,300 homes were sold in the state in June 2009, compared to 7,300 homes a year earlier, he said.

“The end of the price declines will occur between now and the end of the year. … In the second half of 2010, the majority of the markets will see rising prices, timed to increased job opportunities,” Otteau said.

The state now has unsold housing inventory equivalent to nine months’ supply, down from 16.9 months at the beginning of the year and close to the balance point of six months’ supply, when “home prices tend to stabilize,” Otteau said.

The strongest housing markets are in the state’s central and northeastern parts, including Glen Ridge, Chatham, West Windsor, Cranford and Fanwood — all locations with little buildable land that are close to rail lines and employment centers, he said. They also have “well-defined downtown business districts,” with the exception of West Windsor, he said.

Those with the highest amounts of unsold housing inventory are all ex-urban, vacation or luxury housing markets, including West Amwell Township, in Hunterdon County (100 months); Alpine Borough, in Bergen County (71 months); and Kingwood Township, in Hunterdon County (46 months), according to the Otteau report.

New-home sales also are showing strength by recording a June increase that was the largest in more than eight years, Otteau’s report said. “Clearly, savvy home buyers are taking advantage of lowered pricing, low interest rates and the federal first-time-buyer tax credit, which are all advancing the housing market recovery,” he explained.

New Jersey is faring better than the rest of the country in home price trends, according to Otteau. He said the state experienced a 20 percent decline in home prices between the second half of 2006 and the second half of 2009, compared to a 30 percent decline in home prices during that period in the rest of the country. The foreclosure activity also is lower than the rest of the country in New Jersey as a percentage of total home ownership, he added.

E-mail Shankar P. at [email protected]