New Jersey home sales rose only to fall after the home buyer federal tax credit’s expiration, where it’s no picnic these days in the Garden State, despite the fact that more people are going back to work in the region. The drop in sales was also accompanied by a decline in home prices. Troubled by the financial crisis and high jobless numbers the New Jersey economy is battling against the odds to recover from the real estate crash.
The expansion of the federal government’s Hardest Hit Fund to $112-million is intended to help homeowners who are unemployed and under-employed in New Jersey as a result of the U.S. financial crisis. Lower housing prices accompanied by near record low mortgage rates should stimulate buying activity towards mid-year, but not before home values decline further in New Jersey, which has the highest population density of any U.S. state.
The news isn’t all bad in New Jersey, however. Biotechnology is one of the brightest sectors of the area’s economy, directly employing almost 60,000 workers and fueling nearly $60-billion in annual economic activity. The state is also the site of more federal Superfund sites than any other, employing tens of thousands of workers.
Along the Jersey shore things are rough in the housing market as foreclosures pile-up. Home values are declining in Atlantic City, which was a hub of activity prior to the crash. Newly built condominiums are selling for nearly half of what they were offered for first by developers. The Hardest Hit Fund will help some victims of the crash, but not all since the program is only for owner occupants and the area is a huge second home vacation market. As more homeowners are unable to afford mortgage payments foreclosures are projected to increase in the area, and housing prices are forecast to decline an average of 10.8% in Atlantic City in 2011.
Ocean City will also suffer through another tough year in terms of home values as bargain hungry buyers seek out the best deals, buying foreclosures and bank assisted short sales. Home values are projected to fall an average of 10.3% this New Year.
Businesses have been closing up shop in Trenton, but amid the financial crisis some newcomers are also opening up stores and restaurants as the pain of foreclosures trouble the local economy. Programs to help those suffering through foreclosure have been in effect in New Jersey for more than two years, but without enough money to pay mortgages many homeowners in Trenton are finding themselves out of luck. Average home prices are forecast to drop 8.9% in Trenton by year’s end.
In Newark just over the bridge from New York City the housing market has weathered the real estate storm better than many other areas with a healthier job market and more stable employment in health care and education. The fallout from the financial crisis has been more limited as a result with less speculation during the boom. The market is projected to recover sooner with rising home sales, and is forecast to witness average deflation of just 6.8% for the year.
In Jersey City the economy is taking such a hard hit that police officers may have to be laid-off. More than 100,000 government workers have lost jobs since the financial crisis started nationwide. The community underwent a modern upgrade in terms of new buildings before the real estate crash, but bankers blunders and Wall Street traders cashing in on bets on the housing market have destroyed the foundation of government services in Jersey City since people who are losing their homes don’t pay property taxes and banks are slow to pay them when properties are in foreclosures. Average Jersey City home prices are forecast to be cut another 7.2% in 2011.