Real estate industry professionals won't feel any nostalgia for 2011, which saw the double dip in home prices continue and sales fall more than 4 percent.

But at least the year ended with numerous indicators showing prices stabilizing again and sales picking up.

Forecasts by Fiserv and the National Association of Realtors say prices will start rising in early to mid-2012. The NAR reports sales already have turned around with a dramatic 17 percent gain in the third quarter.

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The Economist magazine, which tracks prices of homes globally and since 1975 has estimated their fair value based on incomes and housing rents, says U.S. home prices "now look cheap."

So 2012 looks fairly certain to be an improvement over this year for the existing homes market - once the still fairly dismal current conditions pass.

Fiserv, whose Case-Shiller home price indexes show the second dip began in 2010, expects U.S. home prices to fall another 3.6 percent by the second quarter of 2012 - but then rise 2.4 percent in the following 12 months.

Fiserv's chief economist, David Stiff, said prices could stabilize earlier if economic growth has picked up more than expected toward the end of 2011.

The National Association of Realtors similarly expects existing home prices to increase 1.2 percent in 2012.

NAR expects the annual pace of home sales to rebound to 5.2 million, after falling to 4.9 million in the second and third quarters this year.

The latest data from three organizations tracking local home sales continue to show price declines across the region.

The Federal Housing Finance Agency's Home Price Index - based on purchase and refinancing prices of particular houses - shows a 7 percent decline in Atlantic County for the 12 months ended Sept. 30. Cape May County prices fell 8 percent and Cumberland County 10 percent.

Figures from the New Jersey Association of Realtors, which looked at any home sold in the third quarter, show a 4 percent price decline for the past 12 months in Atlantic County, a 5 percent drop in Cape May County and a 4 percent decline in Cumberland.

NJAR also breaks out data for Ocean County (not a federal Metropolitan Statistical Area and therefore not included in other surveys), which also saw prices fall 4 percent.

A third survey from CoreLogic, a private provider of business information and services, had Atlantic County home prices falling 6 percent from October 2010 to October 2011. In Cape May County they fell 5 percent and in Cumberland County 4 percent.

The NJAR survey also showed a small increase in home affordability, which was already very good. In the third quarter, New Jersey home buyers needed to put just 17 percent of their income toward paying the principal and interest on their mortgages.

Fiserv's Stiff said that affordability has reached record levels nationwide, with mortgage payments accounting for just 13 percent of median family income.

He said the decline of both home prices and mortgage interest rates has reduced the payment on a median priced home from $1,140 in 2006 to $700 now - a drop of nearly 40 percent.

One cloud threatening the brightening outlook for home prices and sales is the backlog of distressed properties yet to reach the market.

Court intervention in the foreclosure process in response to processing irregularities has made it impossible to tell how much of November's 14 percent nationwide decline in filings from the prior year is due to market improvement or backlog buildup.

In New Jersey, whose courts suspended filings by big banks for much of the past year before allowing them to restart recently, the plunge in foreclosures has been dramatic.

Atlantic County's 47 filings in November were 20 percent fewer than in October and 79 percent less than the year before. Similar percentage drops attended the 21 foreclosures in Cape May County, 18 in Cumberland County, and 157 in Ocean County, according to foreclosure information service RealtyTrac.

A comparison of the N.J. and U.S. rates of foreclosure suggests much of the improvement is due to processing delays. One in every 579 U.S. houses is in foreclosure, but only one in 3,093 in New Jersey. The Garden State may be doing better than the nation, but surely not that much better.

If the market can work through the foreclosure backlog over an extended period, there is strong potential for a housing market recovery in the price declines and pent-up demand.

The Economist said in late November that American homes are 8 percent undervalued compared to the rental costs of houses, and 22 percent undervalued compared to incomes.

But while that much rebound looks built into the current market, the magazine cautioned that prices can still fall further, and noted that home prices in Britain and Sweden in the mid-1990s undershot fair value by 35 percent before increasing.

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