Sales of residential real estate in New Jersey rose to $38.3 billion in 2017, which is a 10% increase from the prior year. Purchase contracts in New Jersey hit a 12-year high in 2017, with 115,237 contracts recorded, a 5% increase compared to the 109,471 home sales that occurred during 2016, as reported by the Otteau Group.
Also noteworthy is that this was the highest residential transaction volume since 2005. Single family dwelling transactions accounted for the largest share in 2017 with $29.5 billion in sales or 77% of all transactions, followed by condo/townhouse properties, which accounted for 19%, and age-restricted dwellings, which accounted for only 4%.
Home purchase contracts in New Jersey came in slightly higher in December.
The historically strong spring season is looking to be a bit of a tug of war, with rising mortgage rates pulling on one end, and on the other, inventory shortages and higher wages.
Without the additional supply and the hike in lending rates, the trend which began back in 2016 is expected to plateau by the end of the year, with an up-tick for the spring and early fall, as those families with children look to buy before schools open this coming fall.
The number of homes offered for sale in New Jersey has fallen to its lowest point of the past 12 years, and nationally have fallen to their lowest levels since 1999. Unsold inventory translates into 5.0 months of sales, which, according to Otteau Group, is lower than one year ago, when it was 5.8 months.
Otteau Group reported that 17 out of New Jersey’s 21 counties have less than 8 months of supply. Historically, the benchmark of a healthy supply-demand cycle calls for a 6-month supply. 
Otteau Group reported, “Essex County has the strongest market conditions in the state with 3.0 months of supply, followed by Middlesex, Hudson, Somerset, Bergen, Passaic, Morris and Union Counties, which all have 4.5 months of supply or less. The counties with the largest amount of unsold inventory (8 months or greater) are concentrated in the southern portion of the state including Cumberland (9.3), Atlantic (9.3), Salem (10.1) and Cape May (12).”