Second Quarter 2022 Market Report For North Central NJ

By Turpin Realtors - July 13, 2022

Chances are you have seen the dramatic real estate headlines lately: “Housing-affordability index drops to lowest level since 2006,” (Wall Street Journal); “World’s bubbliest housing markets are flashing warning signs,” (Bloomberg); “Rising rates raise prospect of property crash,” (Financial Times). While the north central New Jersey real estate market is indeed in transition—we have experienced significant price appreciation along with declines in sales volume on a year-over-year basis, plus a spike in mortgage rates—a holistic view points to market normalization, rather than something more dramatic.

Maintaining perspective is key to a true and fair understanding of the current situation, which we endeavor to illustrate with this report.

A broad, regional overview
Pended contracts during the month of June (e.g., the number of accepted contracts) offer our most current and relevant market performance indicator. Whereas the regional result noted at the beginning of our report shows this measure to be lower in June than it had been during the feverish months of June 2021 and 2020, it compares very favorably against pre-pandemic performance. Furthermore, the year-over-year median price increase is impressive, and the Months Supply chart shows demand continuing to outpace supply, even with interest rates above 5% since April.

Town-by-Town
Our town-level results document the number of homes sold for the entire second quarter. Year-over-year home sales decreased during this timeframe in approximately three-quarters of the thirty-nine towns we study. About the same number of towns experienced an increase in their median sale price due to the ongoing inventory shortage. We observed this trend in the first quarter as well, although it has moderated slightly. In contrast, closed sales in the $1-2 million segment were somewhat stronger compared to the market at large, with quarter-over-quarter gains in 17 towns (44%); no change in 6 towns (15%); and declines in 16 towns (41%).

Supply and Demand
Keeping in mind that a balanced market has a four- to six-month supply of homes for sale,* our regional results show supply shortages that were more pronounced than in any of the past five years, at 1.4 months (for homes pended, all prices). Supply was similarly constrained for homes sold under $1 million in the vast majority of towns we surveyed: 24 towns (62%) had two or fewer Months Supply; 13 towns (33%) had between two- and four- Months Supply; and only two towns had supply greater than four months. As markets continue to normalize, supply will likely increase, which will be a welcome change of pace for buyers everywhere.

As ever, the expertise of a qualified Realtor can provide guidance, reference, and assurance during times of change. I invite you to contact one of the fine associates at Turpin Realtors to assist you in understanding the particulars of your situation or to provide personalized updates about activity in your neighborhood.

*Months Supply refers to the amount of time it would take for the current inventory of homes on the market to sell at the current rate of sale, assuming no additional homes are added to the supply.

See the data → TurpinRealtors.com/Reports