New Jersey and Market Shrinkage Part 2

A Snapshot of the New Jersey Market
Taking a look at the New Jersey single-family home market, back in October of 2018 there were roughly 40,000 homes available for sale. Much of the inventory back in October 2018 was 5.8-months supply. Within 12 months that supply fell nearly 18% to roughly 33,000 homes for sale, translating into 4.7-months supply. In addition, the average sale price for a single-family home in New Jersey increased by only 9.9% in that period, growing from $381,000 to $419,000 in October of 2019.

Back in October 2018 there were roughly 10,800 single-family new listings on the market. Within the course of 12 months that number had fallen by 8.4% to 9,893 homes.

But by January of 2021,  the number of new listings had fallen precipitously to just 6,861, a 26% drop. In addition, pending sales climbed nearly 15% from 5,826 to 6,677 in January 2021. The median sales price in January of 2021 also climbed by double digits to $404,000, up 22.4% from the prior year. On top of that, the average sale price also tracked with the median sales price rising 22%, to $504,585.

Buyers kept on coming into the market, depleting available inventory, and builders were unable to keep pace with the buyer demand; in addition, buildable lots were becoming a scarcer and scarcer commodity.

The inventory of available single-family homes for sale in January 2020 came in at 28,993 but then fell off a proverbial cliff to just 15,044 homes, a 48.1% drop by January 2021. This brought the month supply down from 4.1 months to 1.9 months in just 12 months.

Buyers Keep Coming
Buyers continue to flood the suburban market, coming from the more densely populated city boroughs looking for more square footage.

According to a Pew Research Center report in 2020, one in 20 adults moved from where they were either permanently or temporarily, due to the coronavirus outbreak. That’s 5% of the nation’s population.

Many individuals choosing to move to the suburbs was due to the unsafe conditions that existed in New York City’s boroughs. In addition, many businesses were having large segments of their workforce work from home. The remote workforce represented approximately 50% of all workers.

According to a PricewaterhouseCoopers report, the work-from-home model is here to stay with 83% of employers indicating that the remote work model is going to continue into June of 2021.

The attempt to maintain social distancing has produced a wave of buyers into many of New Jersey’s suburban markets, with individuals looking for more rooms and space for their families and also to conduct business.

Many agents continue to adapt to the surge of buyers looking for homes in suburban regions by providing virtual open houses and virtual 3D presentation of homes.