Real estate markets shift in response to interest rate hikes
Real estate markets have shifted in many regions as escalating mortgage interest rates have forced many buyers to reevaluate their homebuying plans and price ranges. However, pockets of demand continue to bolster certain localized markets here in New Jersey, especially in areas where inventories of homes remain very limited.
With 30-year fixed mortgage rates edging over 7%, buyers are making some necessary adjustments based on what and where they can afford.
Statewide, home prices in New Jersey in September were up 7.0% year over year, with a median price of $450,600, according to the latest data from New Jersey Realtors. The average number of homes sold in the state was down $14.7 % compared with last year. Around the state, houses are also remaining on the market longer this year, as the median days on market for September was 40 days.
Meanwhile, month-over-month, the median sales price has dropped in 16 of the 21 counties in the state. The median sales price dropped almost 5% from $500,000 to $476,000.
Locally, in Middlesex County, the median sales price in September was $480,000, with 502 active listings.
Despite the dip in home prices on a statewide basis, inventories remain low in many of the most desirable markets, including in parts of central and southern New Jersey. There has not been as much softening in these markets as inventories remain firmly below pre-pandemic levels and are still not keeping pace with buyer demand. For instance, significant interest continues from New Yorkers wanting to make a move to New Jersey to take advantage of comparably lower home prices and property taxes. In some of the hottest towns, where there is minimal inventory, a seller’s market remains firmly in place.
Although houses may not be seeing 20 to 40 offers as was the case early this year, properties that are priced right are still getting a number of offers. Houses in turnkey, move-in condition are still turning over fairly quickly in these markets, particularly if buyers want to move before the end of the year. It’s also critical for buyers to be prepared with mortgage pre-approvals before making an offer on any property.