New Jersey has some of the most beautiful, high-end homes in the country thanks to their historic charm, intricate details and superior construction. Unfortunately, these high-end homes have been the slowest to recover and slumped the most in 2012. For instance, prices in Bergen County rose 5.9 percent at the beginning of 2013 while prices in Passaic County only rose 1 percent. Should the homeowners with these high-end homes worry?
No. Although the high-end areas in North Jersey have been slower to recover than the rest of the New Jersey market, they are still improving. Upper-end sales have picked up this past spring and should continue to rise over the following months. Some realtors predict that it will take about 2 years for the high-end homes to see sales return.
One reason why the lower market has seen greater home prices is because of the short sales and foreclosures that have been recently purchased, many of which sat for years during the recession. With these homes being sold for lower prices, they bumped up the lower market without having an impact on the higher market. Also, there is more demand for smaller, lower priced homes compared to large, expensive ones. Fewer buyers for these types of homes is what is preventing prices from rising.
Additionally, from 2006 to 2011, the North Jersey economy lost 10 percent of the jobs in high-paying industries. With the crash of the housing market and the loss of good jobs, buyers have been more careful about what they invest in, even affluent buyers. Young couples and young adults alike are choosing to invest in homes that are more economically priced, sized smaller and are more cost-effective to maintain. All of these factors put the high-end market at a disadvantage.
Still, there is something about the historic homes in North Jersey, and they can’t be replicated anywhere else. As the housing market recovers and these high-end homes can be purchased at a decent price, more buyers will take the opportunity to have a North Jersey home. Sellers may have no choice but to take some loss, but buyers will have plenty of opportunities to own a North Jersey home at a lower price.