NEW JERSEY—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.
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.
“We are making our clients aware that competition is fierce and the little inventory available is going fast, with sellers having multiple offers to choose from” Todd Wilkinson Founder and Owner of FonHome Realty said. "Meaning you are going to over pay right now if you want to buy a property. However, that doesn't necessarily mean it is a bad time to buy a home. What's most important is understanding, as a potential buyer, what is your ultimate goal for buying a home now. Is it more short-term, where you may be looking to upgrade/downsize within the next couple of years. Or is it more long-term, where you see yourself at this property for at least the next four to five years. The longer you plan to hold onto the property, the higher potential to obtain the value appreciation we all hope for. However, every market has its cycles and as this one starts to cool, so may current property values. Putting the short-term buyer at greater risk of losing money on the investment."
Wilkinson continued "finally, as a buyer, if you decide to move forward, don't get caught up in the competition of multiple offers. Winning isn't necessarily everything in this scenario. Sometimes living to fight another day is the best outcome. Be sure to identify your limits prior to beginning your search and don't get talked into expanding them beyond what you are comfortable with. Sellers are requesting crazy concessions right now like waiving inspections or appraisals to make your offer seem "stronger." However, there are many ways to put together an attractive offer without increasing the risk to your family's safety or finances. That's why it's important to have the guidance of a reputable agent and attorney who can provide the necessary guidance along the way. More times than not, those "strong" offers fall apart and yours just may be the last one standing."
"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% compared to last January, despite new listings down 21.4%, and the number of homes for sale down a staggering 43.9%.
Affordability remains a 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% 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.
To view New Jersey Realtors reports visit njrealtor.com/data.