In the early spring, we had seen as much as a third of homes listed lowering their prices, but now the buyers are back, especially those who are looking to get their families settled in by September. And yes, in many desirable neighborhoods there are bidding wars, but not like we saw just two years ago.
Many feel that at this level, the housing market is forming a new bottom.
Houses remain on the market now for significantly more time than they had just one year ago.
Refin reported that in May 2023, there were 27,518 homes for sale in New Jersey, down 26.1% year-over-year. And the number of newly listed homes was 9,761 down 31.5% year-over-year, translating the average months of supply to be just 2 months.
Some analysts are referring to the spring 2023 market as being bumpy, while others are beginning to call this type of strained market a new normal. Any way we describe it, it is going to cost more to buy and sell a house due to inflationary factors and the cost of new technologies that are driving most sales.
People are still quick to close on homes that are move-in ready, are in desirable neighborhoods and have the open-concept, outdoor areas most buyers are willing to pay more for. This is especially true when it seems that mortgage rates do not appear to be going down anytime soon.
Even for the hungry buyers, it is forcing them to rent at higher prices than they might be willing to pay, especially if the rents are taking away from their down payments.
Even fixer-uppers are taking more to sell these days, as buyers are less willing to take on the financial burdens of what renovation costs are today.
The thing that the government is trying to do by reducing mortgage rates is they can’t materialize homes that aren’t built. Builders aren’t rushing in to save the day. Instead of ramping up construction to fill that need, builders are largely pulling back. The higher interest rates, the higher material costs and the higher labor costs are cutting into those once-juicy profit margins builders are accustomed to earning.
The only financial compass that buyers understand is that things are not going to get cheaper, at least in the short-term, and so the only option is to work longer, harder, and save as much as possible, because something tells us – We’re not in Kansas anymore!
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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