In 2006, the housing market completed its transition, begun in the summer of 2005, from five years of boom and escalating prices to a period of healthy and sustainable activity. In most areas of the country, as well as in New Jersey, this means a moderate deceleration of price increases.
In recent years, investor purchases of residential properties has contributed significantly to the pace of the boom market. With appreciation slowing, investors will be looking for other things to do with their money.
Home builders will feel the pinch of rising cost of building materials. The increased cost of plywood alone is expected to add $1200 to the cost of an average new home. Costs of plastic pipe, cement, steel and gypsum are also on the rise, with much of this material being directed to hurricane reconstruction sites.
Inventory of unsold homes is increasing as days on the market are lengthening.
The volume of home sales nationally eased to about 7.8 million in 2006 from the record 8.3 million in 2005. Condo sales were around 820,000 down from the 2005 sales of 900,000.
Population trends will continue to fuel demand for new housing and despite higher interest rates, steady employment and wage growth will mean that consumers still have the means to buy homes.
In recent years, investor purchases of residential properties has contributed significantly to the pace of the boom market. With appreciation slowing, investors will be looking for other things to do with their money.
Home builders will feel the pinch of rising cost of building materials. The increased cost of plywood alone is expected to add $1200 to the cost of an average new home. Costs of plastic pipe, cement, steel and gypsum are also on the rise, with much of this material being directed to hurricane reconstruction sites.
Inventory of unsold homes is increasing as days on the market are lengthening.
The volume of home sales nationally eased to about 7.8 million in 2006 from the record 8.3 million in 2005. Condo sales were around 820,000 down from the 2005 sales of 900,000.
Population trends will continue to fuel demand for new housing and despite higher interest rates, steady employment and wage growth will mean that consumers still have the means to buy homes.
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