As I have written many times before, all real estate is local.  So, when a central New Jersey newspaper, The Courier News, ran an article on the front page (below the fold, alas) entitled "With the market down, it's the right time to buy," it appears that even the local media have gotten the word. 

A notoriously pessimistic appraiser and New Jersey market guru was quoted to the effect that five years from now people will look back and say that 2008 was the year to buy.  Interest rates (though starting to climb) were low and prices were at the bottom before they started their climb in 2009.  The New Jersey market has not suffered as much as other areas, and central New Jersey, especially Somerset County, has been spared the worst.

New Jersey has remained a relatively strong market not so much for its strong economy, some point out, but because with high population density there is not that much land to build on, and many restrictions make it difficult to do so.  Consequently, New Jersey did not experience the overbuilding during the boom of 2000-2005 that we saw in California, Nevada and Florida, areas now going through a difficult real estate market.  There is considerable pent-up demand for housing in New Jersey, and as the word appears on media front pages that prices will start to increase soon, buyers will take a deep breath and move off the sidelines, or they can wait and think five years from now - "we could've been a homeowner."

In today's Inman News there was a super article by Bernice Ross, entitled "Media create foreclosure hysteria." In it she largely debunks the scary headlines that have been published recently in a variety of media.

Ross points out that Realty Trac reports the number of "filings," which includes "Notice of Default, lis pendens, Notice of Trustee Sale, and Notice of Foreclosure Sale."  She goes to write that "each of these takes place prior to foreclosure."  Lumping all these filings and foreclosures now owned by a bank creates a number several times larger than the actual number of properties in foreclosure.

Ross does not mention another important point about foreclosure reporting.  Some homes have more than one  mortgage on them.  Each mortgage can be reported as a filing, swelling the numbers significantly.

Michigan, Ohio, Indiana, Arizona, California, Florida and Nevada accounted for 54% of the filings, and 60% of the REOs (bank ownership).  Excluding these states from the numbers, Ross points out, on average there are only 503 REOs per state.  Not quite the horror show the media would like the public to believe.

Ross' article is clearly the best I've seen on the media distortion of the foreclosure mess.  It puts the numbers in focus.  It doesn't sell newspapers or grab eyeballs, but it provides a much-needed balance.

Franklin Township in Somerset County, New Jersey, is the most populous, with a 2000 population of 50,000.  It has been improving steadily over the past five months.

Absorption Rate.  For the fifth month in a row, the absorption rate has dropped, now at 8.1 months.  That's better than Somerset County as a whole, which increased to 9 months in May, but not nearly as good as Hillsborough or Bridgewater.  In January, however, that rate was a staggering 14.8 months, so there has been substantial improvement.

Supply/Demand Ratio.  The ratio between new listings and sales made has also been making steady progress.  It now is 54%, after being 25% in January.  This improvement promises even further strengthening of the market.

Although the number of closed properties trails badly behind last year (268 in the first five months, 166 this year), there is no reason to not think that the number of closed sales will increase as the mortgage crisis abates.  However, as long as buyers can buy properties at attractive prices in primary markets such as Bridgewater and Hillsborough, Franklin will remain secondary to them.