Inventory Shortages Still a Big Factor 
National Housing Inventory Decreases 10.5% in the Fourth Quarter
In New Jersey, inventory has had some demonstrative changes:
In October 2015, there were 49,552 single family homes on the market.
In October 2017, there were 36,543 single family homes on the market.
In October 2015, there was 9.2 months’ supply of single family homes on the market.
In October 2017, there was 5.3 months’ supply of single family homes on the market.
In October 2016 in Monmouth County, there were 3,595 single family homes on the market.
In October 2017 in Monmouth County, there were just 2,808 single family homes on the market.
This represents a 21.9% decrease in the inventories but also in the overall market conditions.
Ocean County did not match Monmouth County’s loss in inventory, but still, it posted sizable decreases in single family inventory of homes for sale with 4,864 on the market in October 2016 and just 4,095 in October 2017, a 15.8% decrease.
Overall, as the economy continues to heat up, we can expect that January is going to reflect an atypical buying frenzy to start 2018.
We have seen some dramatic changes in the number of closed sales in New Jersey.
In September 2011 that number was 3,916.
In October 2017 that compared to 6,871, representing almost 100% improvement.
It also appears that the demand for homes is still there but the price appreciation is not. Some of this can be attributed to the fact that the economy in New Jersey has basically flatlined for about a decade. In addition to that, taxes on real estate had moved up significantly.
Another area where there are shifts is found in the inventory of homes for sale.
- In September 2011 the number of single-family homes listed for sale was 56,092
- In October 2017 that number was dramatically lower at 36,543
In some parts of the country, they are beginning to see sluggish signs of growth. As the economy continues to gain momentum and housing inventory remains anemic, demand for homes will continue to rise, ultimately pushing prices higher. The fact that home prices are not skyrocketing is a very healthy sign of a good economy.
Since it’s obvious that home prices are not going down, and wages – especially blue-collar wages – are getting stronger, many potential buyers are stepping up to buy.
In addition, another factor supporting this market is the relatively low mortgage rates that are giving first-time buyers an opportunity to jump into this market.
Credit scores for individuals are also on the rise, giving individuals a better crack at offering a winning bid for a house. According to the Federal Reserve survey, 60% of newly originated mortgages have gone to those with a credit core score of 760 or above. Back when the market crashed that figure was 30% lower. Credit is still tight but credit is available.
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