The housing market is shifting toward buyers. Just not in New Jersey.
In most of the country, it’s getting a little easier to buy a home this spring thanks to growing inventory and stalling price growth.
But for buyers in New Jersey and a handful of other parts of the Northeast, the strong seller’s markets of the low mortgage rate days never fully eased. There, bidding wars are still commonplace as inventory remains extremely limited. And home price appreciation is still tracking above inflation and wage growth, making it harder for first-time buyers to save enough to enter the market.
The stiff competition in the Garden State, at a time when more regions are beginning to favor buyers, is a reflection of enduring demand, limited new homebuilding, and the state’s higher-than-average incomes.
“It’s still not a balanced market here at all,” said Melissa DeSantis, a broker associate and managing broker with REAL Broker in Freehold, N.J.
Northern New Jersey has long been a competitive and expensive place to buy a home, sought after by New Yorkers seeking more space and easy commutes into the city. For the more budget-conscious, the advice was typically to head farther south.
Lately, even going south is no guarantee of a better bargain. Competition in places like Monmouth County, in the middle of the state, and farther down into the Philadelphia suburbs is also intense.
DeSantis, who works in Monmouth County, said she saw a surge in interest in her area from New Yorkers seeking more space, strong schools, and shoreline access during the pandemic. That interest never really died down, which she attributes to the appeal of those lifestyle factors and the area’s numerous commuting options to New York.
A drone shot of houses in Freehold, N.J., in summer. ·Wirestock via Getty Images
Lately, larger, more expensive homes have moved particularly quickly.
“You’re seeing a lot of frustrated local move-up buyers because they’re competing with New York buyers,” DeSantis said. “And it seems like the New York players are coming here with suitcases of cash.”
Ted Koczon, a real estate agent in Red Bank, N.J., an hour south of New York, said recent economic uncertainty and higher mortgage rates are likely giving some buyers pause. But in many neighborhoods, bidding wars are still common. He recently saw a $2 million listing in nearby Holmdel, N.J., garner 20 offers, including one for $400,000 over asking price — in cash. Another $1.5 million listing ultimately went for $200,000 more.
“I think it will still be a strong spring season,” Koczon said. “The demand is strong. There are a lot of people who are ready to go.”
Addie Meyer, 31, has been looking for a home in Rumson, N.J., the Monmouth County town where she was raised and hopes to one day raise a family of her own.
There, few homes are available for under $1 million, and listings typically go under contract in a matter of days.
She recently fell in love with a home on the market and, wanting to be competitive, offered $150,000 over its list price. Ultimately, the sellers received 10 offers, and hers ranked somewhere in the middle. The highest ones offered more than $400,000 over.
“In Monmouth County, that is unfortunately the reality right now,” Meyer said.
When she posted online about her house-hunting frustrations, comments from struggling buyers across the state poured in.
“In all of New Jersey — North and South, central — it feels impossible to buy a home right now,” Meyer said.
Closer to Philadelphia, home prices tend to be lower, but they’re rising fast.
In Mercer County, N.J., home to cities like Trenton and Princeton, prices were up 5.2% in the past year to a median of $426,000, according to Bright MLS data. Home prices in the nearby counties of Burlington and Gloucester were up 4.9% and 4.6%, respectively. All of those areas had less than 2.5 months of supply, far below the four to six months that typically signal a balanced market.
“Inventory tightness in the Philadelphia market is really key to why those suburbs of New Jersey are so hot right now,” Bright MLS chief economist Lisa Sturtevant said.
Deisy Cerdan is hunting for a home in Marlton, N.J., and was shocked to see a home in the neighborhood where she rents listed for $625,000. A few years ago, it might have fetched half that.
She and her husband, an electrician, bought a home in nearby Somerdale in 2017 and sold it three years later to address personal and financial problems during the pandemic. Though they profited on that sale, getting back into the market now feels daunting.
“He’s 38, and I’m 35, and we feel like we’re two college students that just graduated who are like, ‘How are we going to buy a home?’” said Cerdan, who works as a teacher.
Though their money could stretch further in some nearby towns, staying in Marlton to provide continuity for their 10-year-old son is a priority. The community is a sought-after place to live — last year, Realtor.com ranked it the second-hottest ZIP code in the nation — and listings are snapped up quickly.
Cerdan hopes to buy another single-family home with a garage where her husband and son can play the drums. A few years ago, that would have been doable, but now their budget may only cover a townhome.
“Now, you’re getting 1,700 square feet for $450,000,” she said. “It’s a joke.”
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
