Low inventory and rising interest rates will likely be a factor in the spring real estate market in North Central New Jersey.
The recently released February 2023 market report from Turpin Realtors, which covers Essex, Hunterdon, Morris, Somerset and Union counties, is a forecast for the upcoming prime season.
“Usually in February, we start to see spring trends seeping through,” said John Turpin, president of Turpin Realtors.
Here are some takeaways from the report.
The number of new listings across all price points is down more than 32% compared to February 2022, from 1,435 to 975.
Turpin doesn’t see that changing anytime soon with higher interest rates.
“People saw a good opportunity to sell their houses when interest rates were low,” Turpin said. “A lot of people are locked into low mortgage rates.”
Shrinking inventory led to fewer sales. The number of homes sold fell 28% year over year in February, from 834 to 604 sales.
Pending sales are also down nearly 20%, with 1,113 contracts signed last February and 914 signed this year. That’s down from the pandemic-era high of more than 1,300 pending sales in 2021 and 2020.
Tightening inventory led to higher prices, with the median trade price of pending home sales increasing to $625,800 from $596,700 in February 2022.
That’s great news for sellers, but “it’s a challenge for buyers,” Turpin said.
Lively market for beginners
Competition is extremely high for starter homes or those priced under $1 million, where new listings are down 35%. There were 1,194 new listings in February 2022, compared to 782 at the same time this year.
The only segment that saw movement was the market for homes priced at $3 million or more. While sales were half of what they were in 2022 – three versus six – there was a 133% increase in pending contracts and a 27% increase in new listings.
Turpin said he thinks the Northern New Jersey market is on solid footing after the influx of new residents starting in 2020.
“The pandemic has brought in so many new people that I think our foundation is so solid now,” Turpin said. “When the inventory comes into line, I’m very optimistic.”
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