Home-Buying Headache Continues In NJ With Low Supply, High Demand

NEW JERSEY — It’s not just hot outside in New Jersey – the real estate market has been cooking, too, and home sale prices last month were 5.4 percent higher than in June 2022 according to Redfin.

The average home sale price in New Jersey last month was $497,500 according to Redfin. (See county-by-county data below)

And if you’re looking to settle into a new single-family home before the 2023-24 school year, you may have trouble finding one. Housing market data shows that Garden State prices are likely to remain high this summer, as there continues to be more demand than supply.

The number of homes sold declined 21.4 percent year-over-year according to Redfin, which cited June data. The number of homes for sale also fell 31.6 percent, and experts say that potential sellers may be choosing to stay put rather than brave the market themselves.

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A closer look at NJ cities, counties

Redfin provided additional data on two New Jersey cities, Newark and New Brunswick. Home sale prices increased 7.3 percent in Newark from June 2022-June 2023. New Jersey’s largest city had the highest turnover rate in the U.S. from January to June, with 24 of every 1,000 homes changing hands according to Redfin.

That is good news for anyone looking to find a single-family home in Newark, because people have been holding on to their houses there: The city has a 42 percent drop in turnover since 2019, and only New Brunswick (49 percent) and San Diego (46 percent) had bigger declines.

When looking at large suburban homes, New Brunswick had the biggest decrease in home turnover with 55 percent.

Redfin calculates the home turnover rate by dividing the number of homes listed to sell by the number of the total number of sellable properties (single-family, condos/co-ops, townhomes, and multi-family 2-4 unit properties only) in a particular municipality.

The New Jersey Realtors, formerly the NJ Association of Realtors, releases data every month about home sale prices by county. Here is what the median price is in every county, as of May 2023.

• Atlantic County: $323,750
• Bergen County: $650,000
• Burlington County: $345,000
• Camden County: $305,000
• Cape May County: $511,250
• Cumberland County: $221,075
• Essex County: $560,000
• Gloucester County: $315,000
• Hudson County: $490,000
• Hunterdon County: $520,000
• Mercer County: $369,950
• Middlesex County: $480,000
• Monmouth County: $625,000
• Morris County: $613,000
• Ocean County: $500,000
• Passaic County: $477,500
• Salem County: $220,000
• Somerset County: $600,000
• Sussex County: $360,000
• Union County: $525,000
• Warren County: $342,000

High prices persist nationwide

Low home supply is fueling competition and driving up prices to near-record highs nationwide, according to recent reports from Redfin.

“Homeowners are staying put because for a majority of them, selling and buying a new house would mean taking on a much higher mortgage rate,” Redfin said.

“Daily average mortgage rates are inching down thanks to cooling inflation, but housing payments are likely to remain elevated because even slightly lower rates may escalate competition for the few homes on the market and push up prices for the foreseeable future,” Redfin added.

Zillow added that the market is "approaching two years of continuous yearly declines in sales."

"Existing home sales will continue to remain suppressed while both sides of this market are feeling the heat of affordability constraints, and we will likely continue to see buyers turning their eyes towards the new construction market – which can offer incentives to tip the scales in favor of buyers budgets as well as offer more available inventory," said Zillow Senior Economist Nicole Bachaud.