Here are the cities in NJ where the housing market may cool the most
The housing market is cooling.
Interest rates have increased by 4 percentage points since August 2021, when they were 2.7%. Inflation is around 8.3%, making everything from groceries to gas more expensive. And home prices are up 28% over the past two years, not including gains so far in 2022.
All of these things combine to slow sales and increase inventory, pushing the market into buyer’s favor.
“We are now moving from a seller’s market… to a buyer’s market in which home buyers no longer feel the sense of urgency to buy quickly before prices rise,” said economist Jeffrey Otteay. real estate and president of Groupe Otteau.
Home sales are down 17% since the start of the year and there are 7,000 more homes on the market than last year, according to data from the Otteau group.
One metric to judge whether the market is a buyer’s or a seller’s market is the “months of supply” of homes for sale in an area. Months supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current pace of sales, according to the National Association of Realtors.
In New Jersey in August, there was 2.7 months of inventory supply statewide, according to New Jersey Realtors.
“When you look at the inventory that’s out there, a lot of it is new homes being started,” said Robert White, president of New Jersey Realtors and broker at Coldwell Banker Spring Lake.
He said a new adult community in Howell, where properties were listed at $849,000, was being offered this month for $720,000 if the buyer could close by October 31.
“I think you’re going to start seeing that in a lot of these communities,” White said. “When they’re building in phases, when they’re selling houses, they usually raise prices by a certain percentage. Now they are forced to bring prices back to phase 1 if they are in phase 3.”
There are areas of the state where it’s still a strong seller’s market, especially in transit-centric or transit-adjacent cities, Compass’s James Hughes told Montclair.
“Pricing is key,” he said. “Properties at the right price sell quickly.”
The largest supply of unsold homes is in the $1-2.5 million price range and the over $2.5 million price range, which each have 17% more unsold homes, according to data from the Otteau group. Unsold homes are up 10% in the $600,000 to $1 million price bracket.
Unsold inventory is lowest in the price range below $400,000, where there are 22% fewer homes on the market. And that’s down 6% in the $400,000 to $599,000 range, the Otteau Group found.
The New Jersey city with the highest monthly home supply is Alpine in Bergen County, where the median home price is $4.04 million and sells in about 150 days, according to data from Redfin.
Alpine is the most expensive ZIP code in the state and was ranked among the most expensive ZIP codes in the county.
“Alpine doesn’t have a lot of houses to start with, so when you do percentages you’ll always feel like it’s more,” said Coldwell Banker’s Michael Kolsky, adding that there are between 800 and 900 houses in total in Alpine.
“It is partly the price of the houses which is not correct. Some of it is location related,” Kolsky said. “Many of the houses in Alpine that are on the market have received offers that have not been accepted. They were simply not satisfactory to the owner.
In Guttenberg — where the median sale price is $477,000 and homes sell in about 119 days, according to data from Redfin — Maira Fernandez, a broker at Century21 Realty Group, says there’s plenty of inventory of condominiums.
In The Galaxy Towers, three condominiums with about 3,000 units in total, there are 38 properties for sale, she said.
“When it comes to single-family or two-family homes, we run into the same problem as everyone else,” Fernandez said. “There is nothing available.”
Here are the cities in New Jersey with the greatest supply of homes and their number of months of supply, according to data from the Otteau Group:
1. Alpine – 11.8
2. Love Ladies – 6.8
3. Saddle River – 5.4
4. Distant Hills – 5.1
5. Atlantic City- 4.9
6. Guttenberg – 4.8
7. Delaware Township – 4.8
8. Grindstone – 4.7
9. Borough of Rocky Hill – 4.3
10. Township of Long Beach – 4.1
11. Fort Lee – 4.1
12. Town of Long Branch – 4
13. Harvey Cedars – 4
14. Surf Town – 4
15. Lambertville – 3.9
16. West Long Branch – 4
Are you an active agent, buyer or seller in this changing market? Do you have any advice on the New Jersey real estate market? Unusual announcements? Let us know.
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Allison Pries can be reached at [email protected].