Big Supplies of Foreclosed House Auction Properties Hold Market Back

by on States

Analysts stated that the housing market of New Jersey will improve in 2011 from last year, but only slightly. Most of them believe that 2011 will be a better year, although most residents will hardly notice the difference. The huge supplies of properties at foreclosed house auction will still be the main reason for the slow recovery of the residential property market, analysts have added.

They also warned home builders in the state that business will still be slow this year as new houses are being forced to compete with distressed properties, including Trenton foreclosed homes. They stated that excess inventory of foreclosures remain the main problem for the home building sector.

Prices will also continue to decline, according to housing experts, since foreclosed homes priced at discount rates will continue to flood the market. Because of the massive supplies of New Jersey foreclosures, prices of houses in the state have declined by 13% since the start of the industry crisis in 2006. Real estate experts stated that until these supplies are lowered, prices will continue to be low and home building will remain slow.

Meanwhile, although home building permits jumped in 2010 when compared with 2009 figures, activities in the New Jersey new home market remain at low levels. Permits issued last year totaled around 13,000, representing an 11% increase from the previous year. Because of the large number of cheap houses offered at foreclosed house auction, new housing permits recorded their worst total in 2009 since 1945, realtors have reported.

Realtors also stated that the poor performance of the home construction market is being aggravated by the fact that very few people are now buying single family dwellings. For the very few who did, majority preferred foreclosure for sale over new residences. Realtors and home builders are hoping that 2011 will be a better period for housing starts as the national economy improves and the job market stabilizes.

Despite the lack of prediction for outright improvement in the New Jersey housing market, analysts stated that the region should be thankful that an improvement, no matter how minimal, is in the offing. They added that, until properties under foreclosed house auction diminish in number, the market's recovery will remain slow.

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