Initially, it was inventory shortages, and then it was labor shortages, and then it was building supply price increases, but when you come down to it, right now the biggest barrier to entry in this real estate market is inflation. The fed’s decision to keep rates artificially low gave buyers an unrealistic expectation that the home-buying process was risk-free.
Nationally, prices for existing homes in March, according to S&P CoreLogic, were up 13.2%. April results from New Jersey Realtor actually posted significantly higher numbers.
In April, statewide single-family homes increased by over 20% based upon median sales price, which was $425,000 from April 2020. The average sale price, though, was significantly higher, climbing 21.4% to $529,000 April 2020. The days on market also showed a reduction, falling by nearly 30% to just 43 days. And the inventory for the state of New Jersey fell from 28,276 to just 15,800, a 44.1% decrease.
In just two years the median sales price for a single-family home has risen from $315,000 to $425,000.
Overall, the national price of an existing house climbed between 13% and 21% year-over-year. This is putting buyers in a very tight spot considering that the housing shortage, combined with the shortage of buildable lots, is going to present a tight squeeze for anyone not in the market already.
According to the numbers published by Case-Shiller S&P, the increase in the March 2021 price is the largest ever recorded in the last 16 years.
What may be more common is that bidding wars may not be as common as the cost of mortgages and houses make it more difficult to cover overhead cost in the long run.
Loan applications are also showing some light weakness falling by 3% this past week.
But still in the case of New Jersey, pending home sales are showing a huge demand with 9,025 pending home sales for April versus 4,384 for the same time in April 2020. In addition new listings have skyrocketed by over 110% this past April to 11,138 from 5,283 in 2020.
Right now, according to Trulia, there are 1,482 homes available for sale in Monmouth County. In April of 2021, there were 1,160 homes available for sale, which is down from the 2,290 that were available in April 2020.
The COVID-19 effect is still driving up prices.
If you have any questions about this information or title insurance, please contact Ralph Aponte: 732.914.1400.
Counsellors Title Agency, www.counsellorstitle.net, founded in 1996, is one of New Jersey’s most respected title agencies, serving all 21 New Jersey counties with title insurance, clearing title, escrow, tidelands searches, and closing and settlement services for commercial or industrial properties, waterfront properties and marinas, condominiums, townhouses or residential single family homes. Counsellors Title also features its own Attorney Settlement Assistance Program™ [ASAP], which is an individual resource customized to fit the needs specifically of real estate attorneys, including, Documentation, Preparation, Disbursement of Funds, Attendance at Closing, HUD Preparation or Post-Closing Matters.
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