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In our first quarter report last year, during the darkest and most confusing days of the pandemic, we observed that major disruptions had historically led to an improved market in New Jersey. We cautiously posited that the pandemic could lead to the reversal of urban migration, and result in renewed interest in our region. Looking back now, it is fair to say that the shift in our market exceeded even our most optimistic expectations. In an otherwise tumultuous period, we are pleased to report that the suburban and exurban real estate markets of New Jersey are more robust than they have been in over a decade.
Widespread Improvements, Record-Breaking Results
Our 2020 report shows 33 of 39 towns posting an increase in sales over 2019. This is especially remarkable in light of several weeks of total lockdown during what is usually our peak selling period. Indeed, not only did our towns make up the lost ground, several set records. Boonton Town, Bridgewater, Clinton, Clinton Township, Long Hill, Morris Township, New Providence, Readington, Washington Twp. and Westfield all reported more sales and a higher average sale price than at any time in more than ten years!
Towns that were especially hard hit during the 2008 downturn and thereafter are now experiencing some of the most robust improvement, most likely due to the excellent value they present. Bernardsville, for example, saw a significant improvement in both unit sales and total dollar volume as compared to 2019 (59% and 84% respectively), and its $1-2 million segment surged by 150%. In Tewksbury and Califon, where most single family homes feature enviable amounts of sought-after open space, sales increased by 76% and 122%. Meanwhile, in Harding Township, where low taxes and open spaces combine with convenience to eastern amenities, unit sales were up by 95% and total dollar volume up by 109%.
Low Inventory Drives Price Appreciation but Challenges Buyers
Though perennial performers like The Chathams and Madison are now being hindered by extremely low inventory, these towns still managed to outperform their 2019 unit sales handily (17% in Chatham Boro, 20% in Chatham Township, 27% in Madison). Low inventory is expected to challenge buyers in these towns and elsewhere. Bridgewater, Chatham Township, Clinton, Clinton Township, Madison, Maplewood, Morris Plains and Washington all have less than one-month’s supply of homes for sale and numerous other towns have only slightly more (Supply is the number of months it would take for the current inventory of homes on the market to sell at the current pace; four to six months supply is considered balanced). While low inventory makes life hard for buyers, it will undoubtedly drive price appreciation moving into the first half of 2021.
Price Sensitivity Persists in the Luxury Market
In contrast, the upper end (generally over $2 or $3 million, depending on the town), continues to experience high levels of inventory and price sensitivity among buyers. Harding Township, for example, experienced robust improvement in sales up to $3 million, but sales above that mark declined and inventory remains at a 40-month supply. We are hopeful that this segment will begin to improve as more people discover our beautiful area and the value it represents, but we also recognize the challenge presented by the continued out-migration of high net worth individuals from New Jersey. In the long run, the magnificent homes, tremendous lifestyle opportunities and value that we know exist in our luxury market may well drive sufficient interest to outweigh any such headwinds.
As always, we stand ready to assist with questions about your particular real estate situation. I encourage you to reach out to a Turpin agent for insights into the market, whether you plan a move or not. We have never been more proud to represent the people and properties that comprise this special part of New Jersey that we call home.
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