Housing market still struggling around lake

Lake News, | By LHN Staff I August 23, 2011

In turbulent financial times, economic data can be murky. And it's no different for the Lake Hopatcong area's housing market, where there's a mix of discouragement and promise with regard to home-value data.
"It's really tough out there," said a Lake Hopatcong-based Realtor who asked to remain anonymous in order to be candid. "People who have lakefront homes are even feeling it, though they tend to fare better. Those who live away from the lake can be hit or miss, and many are 'missing' right now."
Though the data is incomplete for all four towns, trend lines in Hopatcong and Lake Hopatcong zip codes show home values dropping while the New Jersey state average slowly picks up, according to data from Realty Trac, Inc. Landing and Mt. Arlington have very limited information, but the last data points for those zip codes also show a drop.
On a statewide basis, some signs are promising. For one thing, the average home sold in New Jersey in July went for $401,715, which was a 5 percent increase from last July, when the average home sale was $380,543.
The area also has foreclosure rates significantly lower than the rest of the country. Nationally, 1 in 611 housing units received a foreclosure filing, according to RealtyTrac Inc.'s July 2011 data. In New Jersey, that number is 1 in 3,171. Sussex County fares a bit worse than the rest of the state, with 1 in every 2,767 housing units facing foreclosure. Morris County is on more stable ground, with 1 in every 5,935 housing units in foreclosure.
In the 07849 Lake Hopatcong zip code, the average home sale in June was $330,000, up 8 percent over last year's average of $306,500.
But Hopatcong (07843) is a different story: the average home sale in June was $168,405, down 32 percent from last July's figure of $222,378.
Mt. Arlington (07856) and Landing (07850) don't have updated figures from this summer, but both show a downward trend in the most recent data available on RealtyTrac. (See the graphs below for all four towns compared to New Jersey's trend numbers.)
A variety of factors are likely to be playing a role in the trend, but the National Association of Realtors chief economist Lawrence Yun suspects tight lending practices are at least partially at the root of the problem. “Affordability conditions this year have been the most favorable on record dating back to 1970, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers, ignoring a large share of otherwise creditworthy buyers,” he said. “Those potential buyers represent the difference between an uneven recovery and a much more robust housing market.”
That is a concern that is also expressed by the local Realtor, who added that "a host of other factors are to blame, too." For many, it's simply "not a good time in people's lives to take on the expense of moving, or the risk of buying."
Lakefront homes, the Realtor said, are in a better position—but only to a limited extent. "Those who are selling lakefront have an advantage in that they offer something that people are specifically looking for and can't get elsewhere." That said, those who might want to buy a second home on the lake are likely to be limited by the restricted financing mentioned by Yun. "Even though the market is soft and would seem to be a good time to buy that summer home you've always wanted, those who might want to take advantage of it don't have the ability to get the financing they would need to do so," the Realtor said. In the end, "there are a variety of things playing into the market. I don't know if I've ever seen it this bad... but that doesn't mean things won't turn around soon."
To read a story posted last year on this subject, click here.