Housing market trends: Home owners may want to stay up-to-date on market trends, including changes in home values, inventory levels, and sales activity in their local area. This information can help them make informed decisions about buying, selling, or refinancing their home.
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Zoning and development: Changes in zoning laws, development plans, and new construction projects can affect the character and value of a neighborhood. Home owners may want to stay informed about these developments and how they could impact their property values and quality of life.
Mortgage rates and refinancing: Changes in mortgage interest rates can affect the affordability of buying a home or refinancing an existing mortgage. Home owners may want to stay informed about changes in rates and other factors that could impact their ability to secure a favorable mortgage.
Hiring struggles are a sign that the labor shortage wasn’t temporary.
It could last for as long as a decade as employers scramble to fill jobs left vacant by retiring baby boomers.
And it leaves younger workers squarely in the driver’s seat.
New Jersey continued its strong job growth in September 2021, adding 21,500 jobs — 11,900 in the private sector and 9,600 in the public sector, the state Department of Labor and Workforce Development reported Thursday.
New Jersey has recovered 68% of the jobs it lost when the pandemic first hit in March and April of 2020.
The unemployment rate ticked down to 7.1% from 7.2% as more workers reported they were actively searching for jobs, the report found.
These days, workers can be choosy.
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Want to buy a house or sell one?
Call me today at 609-915-9665 and I will be glad to discuss your real estate needs.
I am a Realtor with Coldwell Banker and assist buyers and sellers in Princeton, NJ.
Trenton, N.J. (February 25, 2021)—Traditionally, a very cold January would have dampened prospectors looking for New Jersey homes, but according to New Jersey Realtors January market data, it seems like nothing can stop the pandemic push for properties.
“We’re still in uncharted territory,” said New Jersey Realtors 2021 President Jeff Jones. “We have yet to see to the full impact of the pandemic. The continued widespread availability of a vaccine will certainly encourage potential sellers to list which will hopefully increase the currently depleted housing inventory.”
Closed sales were up 17 percent compared to last January, despite new listings down 21.4 percent, and the number of homes for sale down a staggering 43.9 percent.
Inventory, while customarily on the lower end during the winter, is the lowest it’s been in months. Only 23,011 single family homes, townhomes and condominiums, and adult community properties were available for sale in the month of January. Last January, that number was 41,005.
Low inventory and high demand continue to push prices higher. The rush to New Jersey doesn’t seem to be slowing down, despite infection rates dropping slowly. The median sales price for all properties in January was $370,000, a marked 19.7 percent increase over January 2020. As the state approaches the one-year anniversary of the pandemic’s arrival in New Jersey, more and more potential buyers are being lured to either move into the state from neighboring cities or are ready to upgrade their current New Jersey home.
Affordability remains a top concern. As prices continue to rise, the first-time homebuyer market segment will be impacted the most. However, demand drives on, with 9,823 pending sales in the pipeline for January, up 17.4 percent over last year, a clear indicator the desire for New Jersey is going to outlast the winter freeze.
Sustainability of higher prices is likely here to stay for the short-term due to Freddie Mac’s prediction of low mortgage rates for 2021, but talks of a housing bubble lack evidence as today’s market differs greatly in viability from the market correction of 2008.
New Jersey Realtors is the voice of real estate for New Jersey. It is a non-profit organization serving the professional needs of more than 58,000 Realtor and Realtor-Associate members engaged in all facets of the real estate business. In addition to serving the professional needs of its members, NJ Realtors is dedicated to enhancing the ability of its members to conduct their business successfully while maintaining the preservation of private property rights. Realtor is a registered collective membership mark, which may be used only by real estate professionals who subscribe to the Realtor organization’s strict Code of Ethics and are members of the national, state and local Realtor organizations. For more information, visit njrealtor.com.
New Jersey has long been the beneficiary of people looking for housing near New York City but not in the City.
Jersey City and Hoboken — the so-called Gold Coast — have been desirable addresses for decades.
But now — after the COVID-19 lockdown allowed professionals to work from home — the trend is to move away from urban living and seek refuge in the suburbs.
After the COVID-19 lockdown allowed professionals to work from home, the trend is now to move away from urban areas and seek refuge in the suburbs. Photo courtesy of Coldwell Banker Realty/Lori Intocchi
While the real estate market in Jersey City and Hoboken remained strong, the boom in housing sales spread across the Garden State.
“I’ve been in this business 33 years, and I’ve certainly seen a big change,” said Angela Sicoli, a Century 21 broker-owner in Nutley and president of the New Jersey Association of Realtors.
“The demand for homes is so high throughout the state,” she said. “Our figures are showing the market is competitive throughout the state.”
How competitive?
“Essex County as a whole is up tremendously,” she said. “The median price is up over 21%.”
In Montclair and Glen Ridge, big, older houses are selling for $100,000 to $200,000 above the asking price, Sicoli said.
In Nutley, she had a listing with an asking price of $525,000 that sold for $75,000 more.
“These are normal, medium-sized homes that the typical buyer would want,” she said. “The properties are going on the market and selling overnight. It’s a win-win situation for everybody.”
In towns such as Montclair, big, older houses are selling for $100,000 to $200,000 above the asking price. Photo courtesy of Coldwell Banker Realty/Janet Sklar
While the initial frenzy to get away from the city has subsided, Sicoli said, the Jersey real estate market remains strong.
For the entire state, the average sale price for single-family houses was up almost 25%, for condos and townhouses it was up almost 10%, for adult community homes, up 18%.
“The prices continue to go up because there are so many buyers for one property,” she said. “They are still coming in from the City. This isn’t going to go away anytime soon. They want to escape — they want the backyards.
“We see it continuing through the spring and into the summer.”
And what’s driving the market is not just the pandemic: Mortgage rates have dropped significantly as the Federal Reserve attempts to stimulate the stagnant economy. The rate for a 30-year mortgage has been as low as 2.75%. Fifteen-year mortgages hover just above 2%.
“People are looking to open their borders a little because they’re not going to the office as much,” said Rob Norman, president of Coldwell Banker Realty, headquartered in Madison, which covers the entire state, with 50 offices and 4,000 agents.
Since vacation travel is out, buyers are looking for park-like yards and walkable neighborhoods, among other features. Photo courtesy of Coldwell Banker Realty/Lori Intocchi
Since vacation travel is out, buyers are looking for amenities — park-like yards, walkable neighborhoods. Lake communities are very desirable, he said.
“We have seen inventory increase, but it’s not the same as last year,” Norman said. “Inventory didn’t come off the market over the holidays like it did last year.” (Editor’s note: Norman noted that in the early months of 2021, buyer demand intensified and inventory significantly decreased. The January market report from New Jersey Realtors showed less than a two-month supply of homes statewide, with six months of inventory considered normal in a balanced market.)
“Pools used to be undesirable for many or a wash at best, but now they’re in demand,” said John Turpin, a broker in Somerset County.
“I think you’re seeing people recognize they need more space, and they need dedicated space,” Norman said. Home offices and space for the children to home-school are being sought.
With the children at home, more space might be needed for a grandparent to move in — or for a nanny.
“I’m working from home, I have a 9-month-old baby, we needed more space,” said Stephanie Shabat, who works in the healthinsurance industry and lived in Hoboken for 10 years while working in Manhattan.
She, her husband and baby moved to Westfield, which is on the Raritan Valley Line, for the commute to Manhattan.
“It was always our intention to move to the suburbs,” she said. “The pandemic sped things up. It was an opportunity to have more space, space for me to work, a yard.”
In Hoboken, she said, the dense population meant taking precautions such as wearing a mask “to go across the street.”
Properties along the coast, like The Lofts Pier Village in Long Branch, are in high demand. Photo courtesy of Extell Development Co./The Lofts Pier Village
“In Ocean and Monmouth counties, what used to be a secondary market is now a primary market,” said Perry Beneduce, marketing director for Diane Turton Realty, which covers 80 miles of the Jersey Shore. “The whole situation has really flipped. It’s a complete flip on what the consumers are looking for.”
He said he has been getting inquiries from as far away as the Hamptons and Connecticut.
Long Branch has been especially hot, with the median sale price up 26%.
“The sales market is very strong. There’s a lot of interest, a lot of activity,” said Moshe Botnick, vice president of Extell Development Co., which is building The Lofts Pier Village in Long Branch.
“A lot of people are pushing to get in, he said. “People are interested in having another place to go.”
Botnick said older owners looking to downsize also are snatching up rentals at Barnegat 67, another Extell property just inland from Long Beach Island.
“A lot of those people are looking to rent,” he said. “There’s a lot of development going on in Barnegat. It’s a popular place to be; people are moving down.”
The trend toward the suburbs has resulted in bidding wars for available properties. Buyers want turnkey properties — they want to move quickly.
“The biggest problem we have is low inventory,” Beneduce said. “The bidding war seems to be the standard. People are willing to spend huge amounts of money to get out of the city. They want land, they want larger homes, they want space on the coast.”
Pools have become an in-demand amenity now that people are looking to plant roots in the suburbs. Photo courtesy of Coldwell Banker Realty/Ellen Monarque
Turpin, broker-owner of Turpin Realtors, which serves Somerset, Morris and Hunterdon counties, said he believes the trend toward the suburbs already was under way when the pandemic hit.
“We were at the very beginning of the trend, and COVID just ignited it,” he said. After a decade or so of a “conveyor belt” of people moving to urban areas, “we’re seeing people from the suburbs moving farther west. It’s amazing, the reversal.”
He said even very high-end properties — $2 million and up — are “ticking up” in value.
Lisa Candella-Hulbert, president-elect of the Women’s Council of Realtors in Mercer County and a broker for Berkshire Hathaway HomeServices Fox & Roach in Princeton, said 2019 saw a consistent, solid market. “It was steady, and then COVID happened.”
“It’s been an interesting journey,” she said. “Your three- to five-year plan has become a three- to five-month plan. People are not wasting time.”
She said she had clients who told her they wanted to sell their New Jersey house and move to North Carolina. In six weeks, they had done it.
“If you put your house on the market at an entry-level price — $375,000 — you’re going to get multiple offers, and it’s probably going to go in no time,” Candella-Hulbert said.
She said a house that went on the market for $500,000 received 15 offers in a weekend.
“I have clients looking for homes, and they just can’t win,” she said.
“It can be frustrating,” Sicoli said.
Purchase contracts have become creative, adding escalation clauses: Buyers put in writing that they’re willing to pay $5,000 more than the highest offer, for example.
Real estate experts have noticed that buyers want turnkey properties, and they want to move quickly. Photo courtesy of Coldwell Banker Realty/Michele Wingle
The spark that lit the market didn’t happen overnight. When the lockdown struck, people at first were reluctant to have potential buyers in their homes. Real estate agents had to become creative.
“It was interesting because it took a little time to evolve as an industry, and we evolved successfully,” Norman said. He thinks the usually hot spring market was delayed about three months into early summer in 2020.
“We have to deal with a number of new challenges we haven’t had to deal with before,” he said.
Even during the early spring lockdown, life events — marriage, birth, retirement — led people to seek new housing.
Meanwhile, technology became a principal selling tool. Virtual, even 3D, house tours became standard. Buyers could do a drive-by and get a link from the “forsale” sign.
“The technology is helping people,” Norman said. “It has been a great benefit to the homeowner.”
3D house tours are now an option for some potential homebuyers because of COVID-19. Photo courtesy of Getty Images
Potential buyers could look at dozens of homes without going inside any, narrowing down their choices. Old listings often had only a picture of the outside of the house.
Candella-Hulbert said she knew of a buyer who made an offer on a house without ever going inside.
“Now is the time to make a move,” she said. “The quarantine changed the urban living mindset.”
When home tours restarted, agents wore masks and booties when entering a house.
Many of these innovations are expected to continue beyond the pandemic, but in the shortterm, there is no end in sight to the stampede to the suburbs.
“Right now, buyer demand has outpaced listings,” Norman said. “Money is cheap, you’re working from home — why stay?
“You’rekind of seeing a perfect storm with what’s going on in these markets. This market is good — it’s a great time to sell, and it’s a great time to buy because interest rates are low.”
Sicoli advises buyers to take their time.
“Look at comparable prices for the last month,” she said. “They have to be prepared to know they are not going to get that home at that asking price.”
Joe Bakes is a veteran of more than 40 years as a reporter and editor for New Jersey newspapers, including 24 years for The Star-Ledger. He has taught journalism at Seton Hall and Montclair State and Kean universities.
This article originally appeared in the Spring 2021 issue of Jersey’s Best. Subscribe here for in-depth access to everything that makes the Garden State great.
In the past whipsaw pandemic year, the U.S. real-estate market went from essentially shut down to an unprecedented rally. Today, increased demand has dwarfed the supply of homes coming on the market in many areas. The result is a severe inventory shortage spanning much of the country.
For this year’s Real Estate Guide, The Wall Street Journal partnered with Realtor.com to analyze inventory in luxury real-estate markets across the country. ( News Corp , owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.) Our data looked at more than 1,000 ZIP Codes with a median listing price of $750,000 and up, and compared average monthly inventory levels from the beginning of 2017 through the end of 2019 with those from March 2020 to February 2021. The results show that the most dramatic inventory drops occurred in vacation destinations, such as Cape Cod and the Jersey Shore, and exurbs of major cities that were once too far away for commuters.
PHILADELPHIA (WPVI) — The pandemic real estate market is not for the faint of heart – just ask Tim and Alyssa Walter. “If you like to be mentally and emotionally tortured, it’s for you. Otherwise, it’s awful. It’s terrible,” Alyssa said.
The housing market is red hot and the playbook has changed.
Historically low interest rates, combined with skyrocketing home prices and fewer houses available – especially in the suburbs – equals a real estate rush for potential buyers.
“I think fast food is a little bit slower than what the walkthrough of the housing market today is,” Tim said.
Buyers used to have at least an hour at showings, but now they’re given only minutes. Many homes have time limits for offers, and sometimes that window is only a few hours.
“We came in at like 4:30 p.m., they were going to be meeting the homeowners at 6 p.m.. And we literally had to walk through and make a decision,” Alyssa said. “Yes, do we want it? No, do we not?”
“There were two properties that are just local here. One of them had 64 showings and 20 offers, one of them had 21 showings and eight offers; both of them went for over $20,000 over asking price,” Russell said.
Some Philadelphia numbers from Zillow show that from January 2020 to April 2021, the typical number of days for a home to go from listing to a pending sale went from 36 to seven.
In other words: homes are selling 81 percent faster.
The tight market isn’t limited to Philadelphia. Sale prices are up across the region. According to Realtor.com, you can expect to pay:
-23 percent more in Montgomery County
-20 percent more in Chester County
-37 percent more in Delaware County
-32 percent more at the Jersey shore
-60 percent more in Monroe County in the Poconos
While you have to be aggressive, also keep in mind that getting pre-approved is just one step. You still have to be comfortable with your monthly payment.
“Number two, knowing that you’re going to go over asking price,” Russell said. “Number three, knowing that you’re probably not getting inspections done.”
And you may have to let the seller stay in the home for free while they make other arrangements.
One other word of caution from financial experts:
“Making the biggest purchase of your life under duress is rarely the recipe for success. If you find yourself in a situation where you’re having to bid above asking price, or you’re pushing beyond the limits of what your affordability ranges, and if you’re tempted to do things like forego inspections, it might be better just to turn and walk away,” said Greg McBride of Bankrate.com.
McBride said it may be better to stay put than buy in an overheated market.
Meantime, the Walters said they got lucky finally finding the house of their dreams in Birdsboro at a price they can handle.
“It was one of those like, ‘God, it must have been what was supposed to happen and where we’re supposed to be,'” Alyssa said.
The pandemic created a frenzied real estate market in much of the United States that has yet to let up, with demand for housing still outpacing the number of homes coming on the market, giving sellers a heavy upper hand in most of the country. But economists say the market cooled off a bit in July — perhaps a sign that the wild price appreciations of the past year may have scared off some buyers who prefer to wait until things calm down, to stay put or to continue renting.
Nationally, U.S. median home prices held steady from June to July at $385,000. That’s up 10.3 percent from last year at this time, according to the latest data from Realtor.com. It’s slower growth than the 12.7 percent increase in June 2021, and it marks the third month in a row in which the year-over-year gains have slowed.
“There’s a lot of buyer sticker shock,” said John Burns, the chief executive of John Burns Real Estate Consulting, based in Irvine, Calif. “People who are a little more investment oriented or who maybe already own a home have pulled back.” Mr. Burns said prices could see a correction in the coming months in many markets — but not a dramatic one. “If prices have gone up 20 percent and then dip 2 percent, it’s not the end of the world,” he said.
“It is just moving from super hot to normal hot,” said Lawrence Yun, the chief economist for the National Association of Realtors, which has not yet released its July data. “It is still a seller’s market.”
It may also signal the return to a normal seasonal dip with many schools back in-person and delayed summer vacations finally underway. In 2020, the market came to a near standstill after Covid lockdowns hit in early spring — typically the busiest home buying season of the year. But it roared back to life during the summer, with people upgrading to larger homes or leaving cities for suburbia, even as inventory fell steeply across the country. Home buyers continued to flood the market with demand through the fall and winter, peaking this past spring.
Economists say the Delta variant’s impact on housing will likely be to accelerate the hybrid and work-from-home trend that is driving buyers with the means to do so to upgrade to larger houses — a trend that often takes people further from the urban core or to less expensive cities. And interest rates remain low, another factor in surging housing demand.
Danielle Hale, Realtor.com’s chief economist, said last month’s slower price growth was skewed because a larger share of smaller, entry-level homes hit the market compared to a year prior, bringing the median price growth down overall. But a typical 2,000-square-foot home still saw brisk price appreciation, up 18.7 percent from July 2020.
“For buyers looking for smaller, entry-level type homes, that’s good news,” Ms. Hale said. “I still wouldn’t say those homes are plentiful, but there’s more of them for sale now than there was a year ago.”
The most dramatic price appreciation happened in Western states and in suburban and exurban areas where buyers are looking for larger, single-family houses and relatively affordable prices. Austin, Texas, saw the biggest jump, with prices up 40 percent from last year, said Mr. Burns. Prices were softest in the Midwest and the Northeast, according to Realtor.com.
Patton Drewett, a real estate agent with Compass in Austin, said homes under $1 million were the most in demand in his area, with the price surge partly driven by buyers moving to Austin after cashing out of pricier cities like San Francisco, Los Angeles and New York. “I’m having to put five to ten offers out on homes to get something into contract,” he said. One client recently put a $975,000 offer on a home listed for $800,000. They didn’t get the house. “It certainly feels like the Wild West in terms of what people are willing to pay.”
Mr. Drewett said he saw things cool off in July, with homes getting between two and ten offers — down from the 30 to 40 offers a home might have gotten in the spring. But in the last two weeks or so buyers have returned from vacations and are once again shopping for homes, he added.
Nationally, the average home took 38 days to sell in July, up slightly from 37 days a year ago, according to Realtor.com, another sign of things slowing down a bit. The number of homes listed for sale was up 6.5 percent in July versus last year, which Ms. Hale said is a leading indicator of where the market is headed. “It’s still going to be a competitive market,” said Ms. Hale. “But we’re going to start to see more balance.”
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COVID-19 was devastating for many businesses. Restaurants, health clubs, movie theaters and other enterprises suffered substantial losses due to pandemic shutdowns. However, one industry thrived during the worst of COVID-19: real estate.
Crossings at Raritan Station is an apartment complex with mass appeal for those with hybrid work schedules due to its proximity to NJ Transit. Photo courtesy of The Marketing Directors
Fueled by an out-migration from urban areas and supported by record-low interest rates, the suburban New Jersey real estate market remained blazing hot through the dead of winter and well into the summer. Brokers reported unprecedented traffic and bidding wars once open house presentations resumed, and neighborhoods that were previously out of commuting range for buyers working from New York City became destination communities for employees who now worked remotely.
According to Robert Norman, president at Coldwell Banker Residential Brokerage, New York City Metropolitan Area, the strong market transitioned almost seamlessly from the shutdown to the reopening of the economy.
“The market started to get back to normal by late spring-early summer,” Norman said. “While inventories remained low, buyers began to feel more comfortable visiting homes for sale, and sellers were more willing to allow people to tour their homes. The low inventories created a seller’s market. Our research showed that early in 2021, one in five people wanted to sell their homes. Unfortunately, many did not list their homes because they were afraid they wouldn’t be able to find a home to buy.”
Norman noted that Coldwell Banker agents adapted quickly to the COVID restrictions. He believes that their more effective use of video, social media and teleconferencing platforms are a few of the positive byproducts of the shutdown that are here to stay.
Robert White, president-elect of New Jersey Realtors®, also cited low inventories and a desire to flee urban environments as driving forces in the marketplace. In June, there was a 1.9-month supply of single-family homes in New Jersey. The normal supply is about four months.
“Small communities are thriving,” White said. “New Jersey Realtors are working with people from some of the Garden State’s urban areas as well as buyers from New York and Pennsylvania. Families like the feel of small communities with walkable downtowns and transportation hubs. While many buyers have moved farther from the cities because they can work remotely, they still appreciate the convenience of commuter rail and bus service.”
Jersey Shore towns, like Avalon, have been an especially popular destination for buyers coming into the state, and experts expect that to continue in 2022. Photo courtesy of NJ Advance Media
White noted that the Jersey Shore has been an especially popular destination for buyers coming into the state. Communities from the Highlands to Cape May are much in demand. Shore communities tend to be more intimate, and they offer the outdoor space that former city dwellers crave. In addition to downtown shopping and dining districts, many coastal communities are characterized by strollable beaches and colorful boardwalks.
“Another factor driving the strong real estate market is a surge of younger people who are choosing to buy rather than rent,” White added. “Thirty-year fixed-rate mortgages have been hovering around 3% in recent years. Smart young buyers are choosing to lock in these low rates while they can.”
White expects that the market will stay strong well into 2022. He believes markets will begin to normalize and absorb pent-up demand once building material prices stabilize and new-home builders contribute more housing units to the inventory.
Toll Brothers’ Kinkade Model is a carriage-style townhouse that features an open floor plan suited to the needs of remote work. Photo courtesy of Toll Brothers
One homebuilder that is bullish on New Jersey real estate is Pennsylvania-based Toll Brothers.
“We continue to operate at a very high level with strong demand across the Garden State,” said Craig Cherry, Toll Brothers division president for New Jersey. “We are encouraged by the strength of the housing market, and the limited resale supply continues to drive buyers to our new construction communities.”
Much like homebuyers around the state, visitors to Toll Brothers are choosing where they want to live and not where their job previously required them to live. Toll Brothers has a variety of options, including single-family homes, active adult communities and carriage-style townhome enclaves.
“We’re finding our homebuyers are looking for more square footage, personalization options and more open space within their neighborhoods,” he added. “Since many people are working remotely, home offices and niches for work or school are popular features in most of our floorplans. Our build-to-order business model is also well-suited for this trend.”
Real estate experts have noticed an uptick in rental and sales activity in urban areas, like at 99 Hudson in Jersey City. Photo courtesy of The Marketing Directors
Although many people have left cities, like Manhattan, for suburban locations, Jacqueline Urgo, president of The Marketing Directors, sees former city dwellers returning to urban markets. The Marketing Directors is a development advisory and master property marketing and sales force that works exclusively on behalf of property owners and new-home builders.
“We actually started to see a positive shift in the market as early as January with an uptick in rental and sales activity in urban areas, like Jersey City, Hoboken and Harrison,” Urgo said. “These historically popular urban locations were significantly impacted by the shutdown, with widespread closures of restaurants, retail and nightlife, and residents that no longer needed to be near mass transit to get to work in New York City. But with more and more people getting vaccinated and restrictions being lifted, coupled with companies having sent out notices of return to in-person work schedules, we’ve seen a huge influx of residents coming back to these neighborhoods.”
Urgo believes we are likely to see some hybrid version of remote working and a return to the office as the year progresses.
“Quite honestly, I think a lot of workers are just tired of Zoom calls and juggling kids and pets and other interruptions while trying to get their work done,” she said. “People also miss the interaction you get from really being face to face as opposed to being just faces on a screen.”
As the entire country readjusts from unprecedented disruptions in everyday life, it is clear that people are reconsidering where and how they live. No one yet knows which changes brought about by the pandemic will endure and which will fall by the wayside. However, one thing is sure. Our perception of the road ahead has been forever altered by the COVID-19 experience.
Stan Lemond is an award-winning marketing consultant and writer who has more than 40 years of experience. His work has appeared in The Star-Ledger, Staten Island Advance, Trenton Times and South Jersey Times as well as Jersey’s Best.
This article originally appeared in the Fall 2021 issue of Jersey’s Best. Subscribe here for in-depth access to everything that makes the Garden State great.
The pandemic created a frenzied real estate market in much of the United States that has yet to let up, with demand for housing still outpacing the number of homes coming on the market, giving sellers a heavy upper hand in most of the country. But economists say the market cooled off a bit in July — perhaps a sign that the wild price appreciations of the past year may have scared off some buyers who prefer to wait until things calm down, to stay put or to continue renting.
Nationally, U.S. median home prices held steady from June to July at $385,000. That’s up 10.3 percent from last year at this time, according to the latest data from Realtor.com. It’s slower growth than the 12.7 percent increase in June 2021, and it marks the third month in a row in which the year-over-year gains have slowed.
“There’s a lot of buyer sticker shock,” said John Burns, the chief executive of John Burns Real Estate Consulting, based in Irvine, Calif. “People who are a little more investment oriented or who maybe already own a home have pulled back.” Mr. Burns said prices could see a correction in the coming months in many markets — but not a dramatic one. “If prices have gone up 20 percent and then dip 2 percent, it’s not the end of the world,” he said.
“It is just moving from super hot to normal hot,” said Lawrence Yun, the chief economist for the National Association of Realtors, which has not yet released its July data. “It is still a seller’s market.”
It may also signal the return to a normal seasonal dip with many schools back in-person and delayed summer vacations finally underway. In 2020, the market came to a near standstill after Covid lockdowns hit in early spring — typically the busiest home buying season of the year. But it roared back to life during the summer, with people upgrading to larger homes or leaving cities for suburbia, even as inventory fell steeply across the country. Home buyers continued to flood the market with demand through the fall and winter, peaking this past spring.
Economists say the Delta variant’s impact on housing will likely be to accelerate the hybrid and work-from-home trend that is driving buyers with the means to do so to upgrade to larger houses — a trend that often takes people further from the urban core or to less expensive cities. And interest rates remain low, another factor in surging housing demand.
Danielle Hale, Realtor.com’s chief economist, said last month’s slower price growth was skewed because a larger share of smaller, entry-level homes hit the market compared to a year prior, bringing the median price growth down overall. But a typical 2,000-square-foot home still saw brisk price appreciation, up 18.7 percent from July 2020.
“For buyers looking for smaller, entry-level type homes, that’s good news,” Ms. Hale said. “I still wouldn’t say those homes are plentiful, but there’s more of them for sale now than there was a year ago.”
The most dramatic price appreciation happened in Western states and in suburban and exurban areas where buyers are looking for larger, single-family houses and relatively affordable prices. Austin, Texas, saw the biggest jump, with prices up 40 percent from last year, said Mr. Burns. Prices were softest in the Midwest and the Northeast, according to Realtor.com.
Patton Drewett, a real estate agent with Compass in Austin, said homes under $1 million were the most in demand in his area, with the price surge partly driven by buyers moving to Austin after cashing out of pricier cities like San Francisco, Los Angeles and New York. “I’m having to put five to ten offers out on homes to get something into contract,” he said. One client recently put a $975,000 offer on a home listed for $800,000. They didn’t get the house. “It certainly feels like the Wild West in terms of what people are willing to pay.”
Mr. Drewett said he saw things cool off in July, with homes getting between two and ten offers — down from the 30 to 40 offers a home might have gotten in the spring. But in the last two weeks or so buyers have returned from vacations and are once again shopping for homes, he added.
Nationally, the average home took 38 days to sell in July, up slightly from 37 days a year ago, according to Realtor.com, another sign of things slowing down a bit. The number of homes listed for sale was up 6.5 percent in July versus last year, which Ms. Hale said is a leading indicator of where the market is headed. “It’s still going to be a competitive market,” said Ms. Hale. “But we’re going to start to see more balance.”
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A “For Sale” sign stands in front of a home that is in the process of being sold. (AP Photo/Elaine Thompson, File)AP
Closed sales on single-family homes in New Jersey declined last month, by more than 10 percent, compared to August 2020, according to data from New Jersey Realtors. But there are still indications that the market remains robust — especially in four counties where sales are up year over year.
The median sales price was up nearly 13% from $408,500 in August 2020 to $461,000 in August 2021, New Jersey Realtors found in its monthly report.
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High prices and low inventory have continued to cool sales throughout New Jersey. While New Jersey saw a slight decline in closed sales the past few months, overall sales are up 13.6% since the start of the year.
“For the past two years, the housing market has been an anomaly for a number of reasons,” said 2021 NJ Realtors President Jeff Jones. “The return to a more balanced market after almost a full two years of this competitive, in-demand atmosphere will be slower than potential buyers want and, likely, faster than those on the fence to sell will expect.”
Single family closed sales were down 17.5% in September 2021, to 7,756. Townhouse-condo closed sales were down 8.1% to 2,479, and adult community homes followed suit with a decrease of 14.4% to 729. Yet despite fewer sales, median sales price increased again across all categories in September. The single family median sales price increased 7.3% to $440,000; the townhouse-condo median sales price increased 5.1% to $310,000; and adult communities median sales price increased 26.4% to $303,330.
While listings are down year-over-year, the year-to-date new listings for all markets is down just 1.2% over the same period last year, which points to the market making up ground this fall, when new listings are typically lower.
The number of single family homes for sale remains low, but is still above the historical low of this past winter, which had the lowest number of homes for sale in over a decade, if not more. In September, there were 18,863 single family homes for sale throughout the state, representing a 26.1% decrease, which is typical of the decreases of the past three months.
Increasing inventory will be key to moderating prices, relaxing buyer competition, and opening the market back up. Many buyers have either been forced out due to affordability and not finding what they want leading them to wait. In a recent survey to 63,000 New Jersey Realtors, a majority of members see inventory as a very serious or serious problem, but with less intensity than when surveyed this past spring. Similarly, members surveyed said clients are not finding what they want within their price range, with just 41% reporting their clients are currently satisfied with the options in their price range.
If you know a potential first time homebuyer that is struggling to enter the market, have them visit newjersey.realestate/keys to register for a free virtual seminar to help potential first-time home buyers become homeowners. The seminar is this Thursday, Oct. 28 at 6:30 p.m. and all attendees will be entered to win a $250 gift card.
For the full market reports on the state and county level visit njrealtor.com/data.
