New Jersey home prices increase more than wage growth
According to a new report by RealtyTrac, home price appreciation has outpaced wage growth in 76% of housing markets amid the economic recovery. This has increased over the past two years by a 13-to-1 ratio. But in New Jersey, the condition is totally different.
According to Daren Blomquist, vice president of Realty Trac, "Generally, you would think that wages outpacing home price growth would be a good thing because it would indicate that there is more room for home prices to grow and I do think that is the case in New Jersey".
He also added that home prices are not growing and this is one of the reasons behind wages outpacing home price growth in some regions. He also added that they're observing a small decline in most of the New Jersey markets.
As per the report, in 140 of the 184 metro areas with a total population of 176 million together, home price appreciation outpaced wage growth. Metropolitan statistical areas, which have the highest ratio of price appreciation to wage growth, include Memphis, Tennessee; Merced, California; Santa Cruz, California; Augusta, Georgia and Palm Bay-Melbourne-Titusville, Florida.
In the meantime, in 44 of the 184 metro areas analyzed with a total population of 51 million together, wage growth outpaced home price appreciation. Areas having the lowest ratio of home price appreciation to wage growth included Maryland, West Virginia, Hagerstown-Martinsburg, Wichita, Kansas, Des Moines, Iowa, Gulfport-Biloxi, Mississippi, and Harrisburg, Pennsylvania and New York.
Blomquist added that ultimately, traditional buyers will require contributing in the housing market for the recovery to maintain its momentum. New Jersey is still tackling an excess of distressed foreclosure properties, which are likely to decline home prices.