Unaffordable, Scarce and High Rates
By Anthony DiMaio
There are an abundance of complaints coming forth from the sellers and the buyers out there. Sellers are having a hard time finding a property to move to after the sale that is affordable. And buyers are having a hard time finding a property, period. And then affording that property with the high interest rates is another matter.
So the limited choices are making the market move slower than it had been over the last 24 months. Mortgage payments, due to the increase in rates, are now in the neighborhood of $2,600 a month, which is $317 more than the same mortgage would cost last year at this time.
In New Jersey, available inventories are 20-40% lower than they were a year ago. And in most counties in New Jersey, new listings are still lower than they were in 2022.
According to the blog post on Realtor.com, they indicate that in the largest metro areas, the inventory of homes for sale is half of what it was in the years before the pandemic. But frankly, it’s even worse than that in most places; inventories are as much as 60% lower than they were during the pre-pandemic market. And builders are clearly finding it hard to fill in the inventory with new construction.
So if there’s anything good to come out of this type of market it’s that buyers and sellers need to be able to adjust to the conditions. With mortgage rates being as high as they are, buyers need to adjust their budgets and possibly look to simply get their toe in the market and not just buy their dream home. This may be just the time when individuals can possibly own some property and then during the next cycle, make the next move to something that checks all the boxes on their list.
Realtor.com stated that the average home stays on the market now 45 days, which is more in line with how long homes remained on the market in the pre-pandemic market.
In a previous blog, there was a survey conducted indicating that up to 75% of individuals who brought a home over the last 12 months were dissatisfied with their purchase. I think that this dissatisfaction could have been due to their unrealistic expectations and the fact that buying a home in a inventory suppressed market is always going to result in a less than desired property.
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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