New data on home prices show growing momentum in the country's housing recovery, but an economist said the gains don't tell the story in New Jersey, where the comeback still trails the national pace.
The latest S&P/Case-Shiller home price index released today shows a 12.2 percent jump in prices, from May 2012 to May 2013, in its measure of the 20 largest U.S. cities. The year-over-year increase was the largest since March 2006.
Patrick O'Keefe, director of economic research at Roseland-based CohnReznick, noted the S&P/Case-Shiller index does not consider New Jersey as a separate market, but other measures show New Jersey's gains have lagged the national average. He pointed to data from the Federal Housing Finance Administration, which showed that in the first quarter of this year, the state posted its first year-over-year gain since 2007. Nationally, prices had already started to post its first gains in 2012, rising from 2011 levels.
The comparison is "further indication of the fact that prices in state have not recovered at same pace as they have nationally," O'Keefe said. He also noted that in the first quarter, New Jersey's uptick from last year's fourth quarter was 0.5 percent, compared to 2 percent nationally.
"The good news was we finally had a positive quarter," he said. "The qualification of the good news is we were still proceeding at a much slower pace than the nation was on average."
O'Keefe said the pace tracked that of other economic indicators in New Jersey: both job growth and gains in the state's gross domestic product have trailed the national average. He also pointed to state's backlog of foreclosure cases as a cause for the slowdown.
"You put all of that together — it's not our surprising that our prices have rebounded much more slowly than we've seen elsewhere," O'Keefe said.
He also noted that in the S&P/Case-Shiller index, the New York metropolitan region is the weakest performer among the 20 U.S. cities. The performance of that region, which includes part of the Garden State, is "illustrative of what's going on in the state of New Jersey as a whole," he said.