Home to iconic beaches, boardwalks and casinos, the Atlantic City real estate market has experienced a mixture of highs and lows in 2016. The first-half of the year generated decent home prices in comparison to the national average, despite home appreciation and total equity gains not living up to expectations. Atlantic City real estate prices are down from a year ago, but the trend is improving and anticipated to grow moving forward.

Factors influencing the Atlantic City real estate market in 2016 include home affordability, new housing construction and changes in the local economy. Affordability for the Atlantic City housing market remained strong during the first-half, with homeowners paying less than historical standards. New housing construction continued to grow relative to last year, although the local economy recorded subpar numbers in the second quarter.

Atlantic City, NJ Real Estate Market Statistics:

The thorn in the side of Atlantic City real estate has been in both home appreciation and total equity gains. Appreciation rates remained vastly below the national average, as the second quarter recorded one-year and three-year rates of -13.1 and -17.7 percent. In fact, price trends in the last three years have added to the post-recession slump. Nevertheless, there remains one constant for the Atlantic City real estate market in 2016: investment opportunities. Although appreciation rates trail behind the national average, total equity gains have fared well in comparison. For those considering Atlantic City real estate investments, the following spotlights appreciation gains in previous years:

• Homes purchased in the Atlantic City, NJ housing market one year ago have appreciated, on average, by $24,657. The national average was $14,963 over the same period.
• Homes purchased in the Atlantic City, NJ housing market three years ago have appreciated, on average, by $28,184. The national average was $46,878 over the same period.
• Homes purchased in the Atlantic City, NJ housing market five years ago have appreciated, on average, by $31,935. The national average was $82,353 over the same period.
• Homes purchased in the Atlantic City, NJ housing market seven years ago have appreciated, on average, by $8,281. The national average was $77,054 over the same period.
• Homes purchased in the Atlantic City, NJ housing market nine years ago have appreciated, on average, by $41,147. The national average was $31,126 over the same period.

Although total equity gains continue to fall short compared to the national average, Atlantic City real estate investors remain optimistic. Price trends in the last three years for Atlantic City real estate have hindered equity gains, while owners continue to pay down principle. However, equity gains in year nine outpaced the rest of the country, as homes appreciated on average by $41,147. That said, Atlantic City real estate investing should heat up sooner rather than later.

The month of October saw 788 properties in some stage of foreclosure, according to RealtyTrac. Surprisingly, that number is six percent lower than the previous month and 34 percent lower than the same time last year. REO properties, on the other hand, saw a slight boost from previous years. The number of bank owned real estate properties fell 31.6 percent compared to last year, while skyrocketing to 160 percent. From an investor’s perspective, the rise of foreclosures and REOs could propel Atlantic City real estate investments moving forward.

Atlantic City, NJ Real Estate Market Summary:

• Current Median Home Price: $186,400
• 1-Year Appreciation Rate: -13.1%
• 3-Year Appreciation Rate: -17.7%
• Unemployment Rate: 4.7%
• 1-Year Job Growth Rate: 2.0%
• Population: 39,551
• Median Household Income: $50,546

Atlantic City, NJ Real Estate Market (2016) — Q2 Updates:

The median home price for Atlantic City real estate was $186,400 during the second quarter, compared to the national average of $239,167. However, other supporting factors continue to pick up the slack.

One of the biggest positives for the Atlantic City housing market in the first-half of 2016 was home affordability. Homeowners paid 8.8 percent of their income to mortgage payments in the second quarter, whereas the national average paid 15.8 percent. Although historically strong, those numbers were actually weaker compared to the first quarter. One factor that could influence affordability down the line is new housing construction. The current level of construction is 2.5 percent below the long-term average, although single-family housing permits rival the national average. Construction is on the rise relative to last year, which suggests that local inventory has stabilized.

The local economy is another factor investors should keep their eyes on moving forward. Employment continues to decline and weigh on demand in some areas, while unemployment rates lag the national average. The unemployment rate in Atlantic City was 7.1 percent during the second quarter, compared to the national average of 4.9 percent. Furthermore, one-year job growth staggered at -1.0 percent, as opposed to the 1.9 percent demonstrated by the rest of the country. The good news, however, is that the number improved relative to the same period last year .

The number of foreclosures decreased six percent from the previous month and is now 34 percent lower than the previous year. The number of REO properties fell 31.6 percent from previous month, but has risen 160 percent on the year.

Looking forward, the Atlantic City real estate market is expected to see less growth in the next 12 months than the rest of the U.S. According to the National Association of Realtors (NAR), home prices for Atlantic City real estate are predicted to grow by 3.1 percent, compared to the national average of 3.6 percent. Although nowhere near where it should be, the Atlantic City real estate market continues to make small improvements in 2016.