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-- Historical overview
Since its first settlement by Europeans, real estate has been at the center of New Jersey's economic and political evolution. Both the Dutch and the English used land grants as incentives to attract settlers to their colonies, and for many years as a Royal colony disputes over land titles provoked conflict--and occasional violence--dividing those within its towns and villages and sparking opposition to its rule by agents appointed from abroad.
In the first half of nineteenth century, the state's strategic location between New York City and Philadelphia fueled its growth, leading to the development of industry and housing along the corridor connecting the fast-growing cities. Following the Civil War, New Jersey's position at the gateway for European immigration sparked further expansion and development into the next century. With the introduction of the automobile, communities outside the older cities began to emerge as what would become the pattern of New Jersey suburbanization, later spurring the surge in housing for the new families formed after the end of World War II. More recently, the impact of a densely-populated state and concerns for protecting environmental resources, have produced sharp debates on the use of increasingly limited available land and the consequences of its high costs of development and taxation.
--Value and total construction
In 2014, New Jersey had a total aggregate value of real property exceeding $1.164 trillion, according to annual data published by the New Jersey Division of Taxation. The average residential property value in the state in 2014 was $295,869, up 1% from one year earlier although still below the peak of $299,014 recorded in 2011, according to the state report.
The estimated cost of new construction authorized by building permits issued in 2014 was just under $14.6 billion. The total was comprised of $4.1 billion in new residential construction; $3.6 billion in residential additions and alterations; $2.5 billion in nonresidential new construction; and $4.3 billion in nonresidential additions and alterations. Building permits in New Jersey peaked at nearly 40,000 units in 2005, before experiencing a steady decline over the next four years.
In 2014 New Jersey’s construction industry averaged 141,900 jobs, an increase of 3.1% from 2013’s average. From 1990 to 2014, annual average employment was down by 5,800 jobs or approximately 3.9%. Over the 2007-2013 period, construction industry employment experienced a decline of nearly 36,000. Establishments in the construction of buildings industry decreased by more than 19 percent (-6,833 jobs) from 2008 to 2013. Since 1992, the nation as a whole has increased construction jobs by 16.6%, but New Jersey remained 3.9% below the 1992 level.
* Table of Equalized Valuations by County 1998-2014, New Jersey Division of Taxation
* Construction Study May 2015, New Jersey Department of Labor and Workforce Development
-- Residential construction
In 2013, New Jersey had a total of 3,578,141 housing units. Over the 2009-2013 period, the US Census Bureau reported that New Jersey had a 65.6% home ownership rate, slightly higher than the national rate of 64.9%. Median value of owner-occupied housing units, 2009-2013 was $327,100, well above the national average of $176,700.
A total of 22,896 housing units were authorized in 2014 by building permits in the state--an increase from the 18,795 issued in 2013--with the total units comprised of 10,678 for one and two-family construction and 11,909 for multi-family residences. Housing construction remains well below the levels reached before the recession which followed the financial crisis commencing in fall 2008; in 2007, some 27,000 units were approved and in 2006, over 32,000 units were authorized.
-- Office leasing and construction
After the downturn of the recession, office leasing in the state recovered in 2015 to reach a statewide vacancy rate of 18.7% at the end of the year, its lowest level since 2011, according to the commercial real estate firm Cushman & Wakefield. The report found that the strongest markets were near New York City, with Hudson County's vacancy rate at 14.5%, and that demand was highest for offices for legal, computer and financial services tenants. During 2014, 5.4 million square feet of office space was authorized by building permits, with 4.6 million of the total in new construction and the remainder in expansion of existing facilities. The 2014 results for total office construction represented a decline from 2013, when 5.8 million square feet in space was authorized; new construction was essentially flat at about 4.6 million. The relatively weak construction market has been attributed to the state's lagging recovery from the recession, with its unemployment rate remaining above the national rate since 2011 and less than 65% of the number of jobs lost in the recession having been replaced as of 2015.
* New Jersey office leasing hits highest level in a decade, NorthJersey.com
-- Home values and prices
The median home value in New Jersey is $292,500 as of July 31, 2016, according to the real estate web site Zillow.com. New Jersey home values increased 2.7% over the July 2015 level and Zillow predicts they will rise 1.2% within the next year. The median price of homes in July 2016 listed in New Jersey is $299,000, with the median monthly rent of $1,900. Despite recent improvement in housing values, the estimated value remains sharply below the peak of $367,000 reached in June 2006. Freddie Mac, the federally chartered housing finance agency, estimated in March 2015 that home values in the state remained 20.8% below the state's pre-2008 peak.
As of July 2016, the New Jersey Association of Realtors reported that the average sales price of a single family home in the state was $415,734 and the median price was $330,000. Through the first six months of 2016, single-family homes on the market took an average 69 days to the date of sale compared to 96 days in 2013. The total number of homes listed for sale in July 2016 was 11,964, a 17.7% decline from the 14,537 listed a year earlier.
According to another report published in December 2013 by the state Association of Realtors, the typical home buyer in the state in 2013 was 41-years-old; the typical first-time buyer was 32; and the typical repeat buyer was 50. Nationally, the typical buyer was 42; the typical first-time buyer was 31; and the typical repeat buyer was 52. The 2012 median household income of buyers was $106,600 in New Jersey and $83,300 nationally. For first-time buyers, median income in for the state was $91,100 and in the nation it was $67,400; for repeat buyers, it was $125,200 in the state and $96,000 nationally. Among recent home buyers in the state, 69% were married couples compared to 66% for all states.
Towns with the highest median home value over the five-year 2011-2015 period were, according to the US Census Bureau:
* Building Permits: Yearly Summary Data, New Jersey Department of Community Affairs
* New Jersey Home Prices & Values, Zillow
* Monthly Indicators, New Jersey Association of Realtors
* Average Residential Sales Price per Municipality 2015,
Mortgage rates in New Jersey are available from individual lending institutions, along with averages posted online by national web sites such as LendingTree.com, BankRate.com and Zillow.com. In 2012, New Jersey ranked as the seventh highest state in the nation in lending volume with $97 billion in lending, compared to first-ranked California's $600 billion. Among counties, the highest volumes in New Jersey in 2013 were reported in Monmouth ($8.5 billion); Morris ($7.4 billion); Middlesex ($7.2 billion); and Essex ($7.0 billion).
The New Jersey average of total origination fees in 2015 charged by banks and other mortgage lenders, according to Bankrate.com, was $1,891, including application fees, origination fees, points, processing and other charges. Additional third party fees, such as survey ($675), attorneys ($553), appraisal ($406), inspections (pest etc. $125) and other miscellaneous charges accounted for $733. Total closing costs thus averaged $2,625 as estimated by Bankrate.com.
* New Jersey Closing Costs, Bankrate.com
* Mortgage Lenders in New Jersey, Zilliow.com
3,918 vacancies-- Rental market
New Jersey had slightly under 1.1 million renters in 2015, making up nearly 36% of New Jersey households according to a study by the National Low Income Housing Coalition. The median monthly rent price in New Jersey as of July 2016 was median $1,900, according to Zillow.com. Median monthly gross rent as a fraction of median household income was 20% in the state, according to the Census Bureau. The state ranked fifth least affordable of all states in the hourly wage required to rent a two-bedroom apartment at $1,309 monthly, with $25.17 hourly or an annual income of $52,347.
* Out of Reach 2015, National Low Income Housing Coalition
* New Jersey Home Prices & Values, Zillow
* Home Price Index, Freddie Mac
When a homeowner fails to make a mortgage payment, the mortgage is delinquent and the lender may initiate the steps in the foreclosure process. A foreclosing party must send a notice of intention to foreclose, by registered or certified mail, to the borrower 30 days before filing a foreclosure lawsuit.
Unlike several other states, New Jersey mandates that foreclosures go through the state court system, which substantially increases the time and costs of the process. In 2014, the federal housing arm Freddie Mac estimated the time in New Jersey for completing the foreclosure process from filing the notice to sale of the property at 450 to 600 days, tied with Florida as the lengthiest in the nation.
Foreclosure actions are filed in the clerk's office of foreclosure of the Superior Court, Chancery Division, General Equity Part in Trenton. New Jersey has a statutory right of redemption, which allows a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus cost within ten days after the foreclosure sale.
As of October 2016, 64,487 distressed properties in New Jersey wee subject to foreclosure, amounting to a statewide rate of 2.45% of all housing units. nearly five times the national rate of .5%. A total of 3,968 of the foreclosures were vacant -- known as "zombie foreclosures" --the most of any state. The Atlantic City-Hammonton region ranked as the sixth-highest metro region in the US in the rate of vacancies, with 3,918 vacant units constituting 3.5% of all housing.
* Foreclosure Overview, New Jersey Judiciary
* Top Foreclosure States, Bankrate.com
* Foreclosure Trends, RealtyTrac.com
* Summary of New Jersey Foreclosure Laws, Nolo.com
There were 11,671 homeless persons in New Jersey in 2014, a 2.8% decline from the number in 2013, according to a 50-state survey published in 2015 by the National Alliance to End Homelessness. The state's rate of 1the number of homeless per 10,000 of its population of 13.1 was below the national rate of 18.3. Of the total 11,671 individuals who were homeless in 2014, the report found that 1,150 were "chronic" homeless--defined as those with physical or mental disabilities and who are homeless repeatedly for long periods.
* The State of Homelessness in America, National Alliance to End Homelessness
-- Residential Developers
New Jersey's residential housing market features a diverse variety of builders, from national firms to individual builders constructing single family homes. The state's largest homebuilder is Hovnanian Enterprises founded in 1959 by the late Kevork Hovnanian, which also has operations in 15 other states, including New York, Florida, Arizona, Texas, and California; it ranked as the seventh largest homebuilder nationally with over $2.1 billion in 2014 revenues, according to annual rankings published in May 2015 by Pro Builder magazine. Toll Brothers based in Pennsylvania--the fifth largest US builder with just under $4 billion in 2014 revenue--is also active in New Jersey, specializing in upscale single-family homes and multi-family condominium projects. Lennar, one of the nation's largest builders, has ten communities in New Jersey as of 2015.
* New Jersey Builders Association
* Monthly Housing Market Statistics, New Jersey Association of Realtors
* Guide to Affordable Housing, New Jersey Department of Community Affairs