What distinguishes these counties from other New Jersey counties are a few factors including, proximity to Philadelphia.

George Ratiu said, “As Millennials – the largest cohort of buyers in U.S. history – embrace homeownership and take advantage of this year’s unexpectedly low mortgage rates, demand is outstripping supply, causing inventory to vanish.”

It is not only the rush into low entry-level homes that is a factor, but buyers are realizing one of the best ways to gain entry into higher-priced markets is to buy in up-and-coming neighborhoods and convert that equity into dollars they can use to buy into mid-range homes. In the 5 counties adjacent to Philadelphia the average median price of a home increased by 9% – 31%; that is anywhere from 300% to 1,000% higher than the national average. The average median price of a home in Mercer and Salem counties appreciated 21.8% to 30.6%, respectively.

Inventory shortages in these 5 western New Jersey counties have also decreased at a faster rate than the national average, which was 8.8% year-over-year, according to Realtor.com’s November data. Inventory in Mercer, Burlington, Camden, Gloucester and Salem counties fell by 16.3%, 19.1%, 28.9%, 32.7% and 16.5% respectively. It appears that at least some Philadelphia buyers are migrating to these counties in New Jersey as Philadelphia inventory becomes more scarce. Active inventory in Philadelphia as reported by Long & Foster showed, “The total number of homes available this month (October) is lower by 868 units or 16%. The total number of active inventory this October was 4,717 compared to 5,585 in October 2018. This month’s total of 4,717 is lower than the previous month’s total supply of available inventory of 5,196, a decrease of 9%.”

Realtor.com also reported, “Mid-tier inventory priced between $200,000 and $750,000 also decreased by 7.4% year-over-year compared to October’s year-over-year drop of 4.3%, while high-end inventory priced above $1 million decreased by 1.7% year-over-year, compared to October’s year-over-year increase of 1.3%.”

It is not surprising to see the median U.S. listing price increased by only 3.6% year-over-year, to $309,000, which is less than the 4.3% year-over-year increase seen last month. As this is compared to New Jersey’s Western Five, there are places where higher multiple returns on investment are still possible, even in the East.