Home construction in the northeast has jumped 26 percent from May to June with 760,000 projects, according to a recent report. Builders League of South Jersey President Jason Schaeffer told NJ Today Managing Editor Mike Schneider that the numbers are encouraging and his company is seeing an uptick in work as well.
“We’re building in roughly the same places and the same product that we were in 2010 and ’11 and our numbers are up about 10 percent,” Schaeffer said. The projects are mainly single family homes, but he said apartments have grown tremendously over the last couple of years.
Much of the work was put on hold during the economic downturn. “Most of these projects are still what we call legacy projects,” Schaeffer said. “They’ve just been lasting through the downturn until there could be some stability in the market and we’re just now actively selling them again.”
Schaeffer has found that the increase in home construction is a combination of more people looking to buy and better opportunities for financing. “It’s still obviously a buyer’s market. Mortgages are great,” he said, citing 3.5 percent on a 30-year mortgage. “And we see traffic picking up over the last six to eight months and that encourages us to be more active in selling and starting projects.”
It can be difficult in New Jersey to just pick a place on the map and build, Schaeffer said. “Personally, we have an apartment project that took seven years for the approval process so these things don’t just happen overnight when the market improves for a quarter or even a half of a year,” he explained. “You kind of build where our legislators say we can build.”
While Schaeffer said the market is improving, it’s not great and is just getting back to a level of stability. “Stability’s what we all want. The buyers want it so that they know if they make a home purchase decision that the prices aren’t going to change dramatically tomorrow. And the sellers obviously want it so we can make a business plan and focus on new projects and hiring,” he said. “Getting back to that level of stability is still tricky.”
Schaeffer also said there are differences in the recovery throughout the state. “New Jersey does have its challenges in attracting jobs and I think you look at the raw New Jersey numbers, a lot of that growth comes from North Jersey which feeds off New York,” he said. “Southern New Jersey lags a little bit on that growth.”