New Jersey Housing Market Predictions for 2016
House Selling Prices
The Zillow House Value Index pegs the average house price in New Jersey at $284,700 for 2016, a 0.4% decline as of September 30, 2015. The median sale price is predicted at $316,000 for 2016 by Zillow. So, what does this mean for people looking to invest in the real estate market in New Jersey? For one thing, after having declined consistently between 2009 and 2013, housing prices have been on the rise, albeit with minor dips. Here’s a look at what 2016 has in store.
Up, Up & Away
Without using a huge bunch of balloons to make houses soar, economists have already made significant changes to their numbers for 2015. New Jersey Real Estate Report stated that the national House Price Index had reached $253,000 by the end of August 2015, a mere 5.3% below the peak seen in June 2006. With New York leading the gains among the top 10 metropolitan areas, could New Jersey be far behind? Many economists support the expectations that the housing market would continue to look up, saying that there are signs of a “true recovery.”
Employment Rates Lend Support
History shows us that the housing and labor markets are intricately related in the United States. The housing market crisis of 2007 coincided with the onset of a recession not only across the country, but worldwide. The Washington Times reported in August 2015 that the unemployment rate in New Jersey fell 5.89 percent in July 2015, marking the lowest level since September 2008. NJ added about 20,000 jobs between July 2014 and July 2015.
This can only spell good news for the real estate market in the state. The national unemployment rate is predicted to decline to 6% by January 2016, according to Forecast Chart.
Millennials Buying Homes
“Millennials have been reluctant to buy homes because of a volatile job market and high student debt,” says US News. However, millennials are also a part of the populations that take their investment decisions seriously, starting savings early and putting their hard earned cash in the right instruments.
This is why millennials are increasingly becoming the leading investors in the housing market, with US News marking them as the highest percentage of first time home buyers. Healthy property markets, such as New Jersey, therefore attract this segment of the population, especially given the rising rental rates in the region. Millennials are looking not only at resale value but also the psychological impact of home ownership, as well as the retirement benefits of owning their own home.
The construction of over 27,000 housing units was started in New Jersey in 2014, the highest construction figure since 2006, says NorthJersey.com. In addition, 2015 is expected to see work begin on another 30,000 projects. Among these, multifamily homes led the way, with construction of multifamily units being strong across the nation.
While single-family homes will gain ground, as compared to the past few years, multi-family homes would see a strong recovery in 2016, says property expert Richard Donnelly.