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.
"Having 13 of 20 days with snow impacted us a little this month, but if we don't have any more storms, the market night get hot as it was in August, when it was very busy," said George Hansen of ERA Suburb Realty in Scotch Plains. "We are still getting a lot of people from New York and from Bergen County. (During the lockdown), they had no place to go. Here, you can have a backyard. We have so much more to offer for the money, in terms of property and the school system."
"Companies are letting people who work remote, but people like to be able to go into the city. Having the train line makes it desirable to live in this area," said Hansen, who won the NJAR Silver Level award this year and was the top producer in ERA's Scotch Plains office in 2020.
Inventory is low
"Last week, there were only five houses on the market in Fanwood; four were under contract and one was still available. This week, there are two homes, and one is in attorney review," Hansen said. "Usually, there would be 40-50 homes on the market in Fanwood."
Currently, Scotch Plains has 44 houses on the market, while typically there would be 100-130 houses, Hansen says. As it gets to graduation time, the number is expected to go higher.
"The sweet spot is the $450-600K range because of the train line. If a home is priced right, it will sell quickly. If your house is on the market for more than two weeks, it's overpriced," Hansen said. "Some people are overbidding. I'd say 30-40% of buyers are from New York right now. That was happening even before the pandemic, when 80% of buyers came from New York, Hoboken and Jersey City."
"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.