ATLANTIC CITY — South Jersey’s struggling real-estate market is lagging New Jersey’s construction recovery, an economist told the New Jersey Builders Association on Tuesday.
New Jersey has seen a jump in new-construction permits and five consecutive quarters of rising home prices. The state sold 85,000 homes last year, the most since the housing boom of 2006.
Nationally, the picture is even better.
But South Jersey is behind the rest of the state in sales, home prices and new construction, said Jeffrey Otteau, president of the real-estate analysis firm Otteau Valuation Group Inc.
He and Michael Wolf, an economist with Wells Fargo Securities, gave their forecast for the building industry for 2014 to construction executives Tuesday at Resorts Casino Hotel.
The forecast kicked off the annual Atlantic Builders Convention in Atlantic City. The three-day conference, the largest of its kind on the East Coast, is expected to draw 6,000 builders and contractors from across New Jersey.
Wolf said housing growth will be slower than what was observed during the pre-recession boom.
He predicted steady but subdued growth nationwide through 2018.
A cold, snowy winter has not helped. Apparently, buyers don’t go house hunting when it snows.
“We have a weather effect. Seasonality is playing a little role. We expect it to rebound a little but not at the pace of 2013,” Wolf said.
Otteau said total home sales declined by 12 percent in January and February. A similar effect was observed in California, where the decline cannot be attributed to bad weather, he said.
“The market could be fraying at the edges,” he said.
The economy has not recovered from the 2007 recession. The recovery from the technical end of the recession will be in its fifth full year in June, Otteau said.
“Most recessions took 24 months to recover. This one is essentially 5 years old, and we’re still missing jobs,” he said.
Counting the number of underemployed workers who are not counted in the official unemployment rate because they took part-time jobs, the national unemployment rate is still in double digits, he said.
New Jersey Builders Association President David Fisher, of Manasquan, Monmouth County, said South Jersey is facing some unique obstacles, particularly a backlog of foreclosures. He is optimistic about the housing industry for 2014.
“The market is sensitive to where you live in New Jersey. Central and northern New Jersey have done better,” he said. “But home values are up, housing permits are up. And that will go up again this year.”
Builder Dean Mon, of Sea Girt, Monmouth County, said the industry picked up speed last year after years of stagnation following the 2008 home-mortgage crisis.
“We’ve picked ourselves off the floor. Provided everything goes as expected, we should be OK,” he said. “We doubled the housing starts last year. And now the economy is beginning to pick up a little.”
A stagnant housing market continues to dog South Jersey. While most of central and northern New Jersey’s real-estate market has recovered, Atlantic, Cape May and Cumberland counties are considered in distress, Otteau said.
New-home sales represent about 9 percent of total home sales nationwide. In New Jersey, just 3 percent of homes sold in 2013 were new homes.
And while home prices have been on the rise in much of the state, prices in the tri-county region declined by nearly 4 percent in 2013, Otteau said.
“It’s far more challenging in South Jersey,” he said.
The conference continues today and Thursday from 10 a.m. to 5 p.m. at the Atlantic City Convention Center.
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