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Keeping up with the real estate market in any state can be daunting, especially when factors like current events, interest rates, and inventory levels constantly affect the market. In October of 2023, the New Jersey real estate market has shown significant changes, making both sellers and buyers curious about what’s coming. This article will focus on the current state of the New Jersey real estate market, particularly in Atlantic and Cape May counties, and share insights into the recent changes affecting the market.
The New Jersey real estate market in October of 2023 saw a rise in interest rates, marking the highest rates since 2000. This trend has caused concerns among potential homebuyers and sellers, who fear that the higher rates might discourage buyers from purchasing a property. However, over the past few days, interest rates have decreased slightly. Sadly, this decline is due to the recent Hamas attack in Israel, which has prompted many Wall Street investors to put their money into bonds. When this happens, mortgage interest rates often decrease, leading to lower costs for potential buyers.
Looking specifically at Atlantic County, the area remains firmly in the seller’s market. Although inventory levels have increased slightly, properties are still selling quickly, and prices are continuing to trend upwards. Despite the small uptick in inventory, there haven’t been any significant changes to the market. Similarly, Cape May County’s real estate market is experiencing similarities to Atlantic County’s. Prices are up, and inventory levels have ticked up a little bit as well, while days on the market has gone up slightly. Again, the inventory change hasn’t been significant enough to make a difference.
One noticeable trend in the New Jersey real estate market is the decrease in the number of home units sold. According to estimates, this year’s sales are slated to drop by over 1,000 homes compared to previous years. While this trend isn’t great news for sellers hoping to move their properties quickly, it’s a better sign for potential buyers who now find fewer competitors and can potentially find homes at a lower price.
Potential homebuyers and sellers alike should keep an eye on the New Jersey real estate market. Interest rates, inventory levels, and current events all affect the market, and staying informed is critical in making the best possible decision for your financial situation.
As we review our year-to-date market numbers, we observe that there are fewer listings appearing on the market compared to last year. This has resulted in even fewer sold properties, increasing inventory a little bit. Despite this, the prices of properties have continued to rise, while properties are selling for just a little less than their asking prices compared to last year. Days on the market have also increased slightly, as the absorption rate or inventory holding time has hovered around three months on average. This shows us that we are still very much in a seller’s market, albeit not as extreme as the previous years when it was less than two months. Although Redfin is showing a weekly average of new listings entering the market, on an average day, there are about 4% fewer properties up for sale in comparison to prior years.
Historical trends have become predictable, but in 2023, we’re seeing changes in seasonality. Despite this, mortgages are still showing consistency with 70% of people having a mortgage with less than a 4% rate. This has resulted in fewer people wanting to sell their homes to get into a mortgage with a higher rate and has kept inventory low. Interestingly, the market has remained healthy due to the tremendous amount of equity present in homes. Many homeowners have paid off their mortgages or have a significant amount of equity, which is largely due to the dramatic price appreciation the market has experienced in recent years. Only time will tell if these factors will continue to hold true or if the market will experience a shift in the near future.
Although the New Jersey real estate market in October 2023 has seen some record-setting interest rates, there have been small decreases due to recent events. Atlantic and Cape May counties remain firmly in the sellers’ market, with inventory levels only slightly increasing and prices still on the rise. Furthermore, the decrease in the number of home units sold is a trend worth noting, as buyers may be able to find homes at a lower price in the current market. Keeping up with the latest changes and trends in the market is crucial, as it can provide valuable insights into the best decisions for both potential buyers and sellers.