Posted: Sunday, October 9, 2011
By KEVIN POST, Business Editor Press of Atlantic City
The new home market still looks grim for homebuilders, but pretty good for potential buyers: Houses haven’t been this affordable in decades.
Even so, local homebuilders are starting to feel a bit expansive, planning new developments in the area and extending their territories again.
U.S. households, with a median income of $64,200, could afford 73 percent of the new and existing houses on the market in the second quarter.
That’s slightly down from the 75 percent affordability in the first quarter, the highest ever recorded by the National Association of Home Builders.
Locally, affordability was nearly as good.
In the Atlantic City/Hammonton area, 66 percent of houses were affordable to families earning the median $71,100 income for the area.
In Vineland/Millville/Bridgeton, 65 percent of houses were within reach of the median income of $62,400.
The exception to this record affordability was Ocean City, where the data is skewed because houses priced for second- and vacation-home buyers living elsewhere are often out of reach to local household incomes.
This made Ocean City the least affordable of the 220 metro areas surveyed by the NAHB, with only 41 percent of its houses affordable with the local median income of $70,100 a year. While that income is nearly the same as in Atlantic County, the median home price there was $203,000. In Ocean City, resort homes pushed the price to $360,000 in the NAHB survey.
Halliday-Leonard kept to its stronger hometown market of Ocean City as the downturn hit, having built houses from Hammonton to Cape May for 33 years. Now, it’s reaching out again.
“The last five to eight years, we concentrated on Ocean City,” said co-owner Scott Halliday, also of Ocean City. “Now, we’re starting to look elsewhere too. I’m heading to Avalon now for a possible job.”
Tim Schaeffer Communities – which avoided most of the damage of the market collapse and finally sold off the last of its 123 homes at Pine Crest in Egg Harbor Township – also is making plans for an improving new-home market.
After recently starting construction on the 14-unit Walden Commons in Hammonton, the firm is preparing to build a model and sell six homes off Zion Road in Egg Harbor Township, said the Haddonfield firm’s president, Jason Schaeffer.
“We’re also planning to start a project in early 2012 in Vineland. That’s about 180 single-family homes in a development called Menantico Estates,” he said.
Joel Naroff, president of Naroff Economic Advisors, said the shore and New Jersey markets may do a bit better than elsewhere in the year ahead.
“Some of the shore areas have done reasonably well, and that’s pretty good. That’s an area less affected by distressed homes,” Naroff said. “To some extent, the upscale homebuilders have a greater chance.”
Statewide, although there are “a fair number” of short sales and foreclosures, “they’re more sprinkled around, so we’re likely to see more of a recovery in the New Jersey housing market,” he said.
The latest figures on new-home sales suggest that recovery hasn’t begun. The Census Bureau said sales of new single-family homes were down 2 percent in August from the prior month, but still up 6 percent from the same month a year ago.