New Jersey Real Estate Woes
March 19, 2010, NJ Real Estate News
New Jersey real estate and real estate markets across the country are still suffering in the current economic recession, with many experts pointing out that it will take some recovery in real estate markets before the recession eases. Currently unemployment rates and growing layoffs aren’t helping real estate markets, the auto industry or other big industries, and though the government has taken measures to improve the situation, no one knows when the screws will loosen even a little.
New Jersey real estate sales aren’t expected to pick up much until other indicators also show improvement, like unemployment. And unfortunately, the percentage of unemployment in New Jersey rose above the national average rate in February, 2009. While at a high 7.3 percent in January it still remained below the national average as it had during this entire recession. But in February it jumped almost an entire percent to 8.2 percent unemployment, according to the Department of Labor and Workforce Development. The national unemployment rate is 8.1 percent.
This is the highest level of unemployment in New Jersey since 1992, with over 350,000 New Jersey residents currently unemployed. It’s hard to imagine that the New Jersey real estate market can improve anytime soon with unemployment numbers like that. When a state loses about two-and-a-half percent of its labor force in one month, it loses two-and-a-half percent of those people most likely to buy homes.
February marks the 13th month in a row that unemployment has gone up in New Jersey. With the loss of jobs in New York and many of those workers living in the suburbs in New Jersey, the numbers are expected to rise in March for the 14th consecutive month.
New Jersey real estate values and prices are low, making it a buyer’s market, but where do the buyers come from and how do they get the financing to pay for the properties? When the interest rate is at the bottom and prices are low, unfortunately the people who need to take advantage of those conditions the most are the ones who are unable to do so. Even for working New Jersey real estate shoppers, buying those homes isn’t an easy proposition.
Despite the government’s desperate attempts to unfreeze the U.S. credit markets, little has budged among closed-purse lenders. Even people with good credit ratings are being turned down for loans in this uncertain time, because banks are afraid of not getting their money, so other banks can’t get loans from the larger banks to fund the credit. They have little choice but to turn down qualified buyers.
To purchase New Jersey real estate right now, high down payments can help you seal the deal, along with any leverage you can bring to the table, which is particularly useful when purchasing rental property that’s projected to bring in enough income each month so that you can pay the mortgage alone with just that money. The New Jersey real estate market will improve eventually, but right now, it’s the best buyer’s market in years.
