2025 Mid-Year Housing Market Insights: Surprising Trends Every Buyer & Seller Should Know
It’s August, and with just over ten days left before September arrives, you may be soaking up the final stretch of summer or taking some much-needed time off. If you are a home buyer or seller, your head may be swirling with a contrasting mix of headlines about the housing market. While now may be an ideal time for putting things on pause, you might not want to fully flip the switch into off mode just yet.
The Summer Edition of The Minken Housing Index is here for you to dive into. This mid-year review focuses on the pricing trends in Northern New Jersey with insights that reflect broader patterns in markets across the country. So grab your favorite summer beverage, settle into your comfy chair or outdoor chaise, and discover some surprising trends for navigating the complex housing market. Ready? There is plenty to digest!
Housing Inventory - Some Towns Are Soaring!
For years, low inventory has dominated the conversation in real estate. Based on The Minken Housing Index, that trend is clearly shifting! The first-half of 2025 tells a diverse story across 14 top-tier towns in Northern New Jersey, all within easy commuting distance of New York City. Here are the major trends that I am seeing during the first-half of 2025 compared to the same period in 2024.
1. The Market Is Ultra-Local
As shown in the chart below, some towns posted substantial gains in the number of homes sold in 2025 while a handful of towns experienced declining inventory. Towns with the highest percentage increase include Chatham Boro (+21.9%) and Montclair (+20.2%). The town that saw the largest percentage decrease was Mountainside at -22.5%. This uneven movement in housing inventory suggests that local factors, rather than a single regional trend, are driving buyer activity.
2. High-Demand Towns Continue to Attract Buyers
Despite broader market uncertainty, nearly one-half of the towns comprising The Minken Housing Index saw a double-digit percentage increase in the number of homes sold in 2025 compared to 2024. Strong ongoing buyer demand in these communities may be fueled by a myriad of factors, such as desirable school districts, walkable town centers, a variety of updated home styles, and a neighborhood vibe that resonates with buyers.
3. Supply May Be the Limiting Factor in Some Declines
A handful of towns experienced a drop in the number of home sales: Millburn/Short Hills, Mountainside, and Westfield. While one might assume that this is attributed to weak buyer demand, it might simply reflect overall limited inventory. Here's why.
Homeowners with exceptionally low mortgage interest rates (3% to 4%) secured during the pandemic might be less inclined to sell, a phenomenon known as the "lock-in effect." This financial disincentive could be anchoring many homeowners in place, thereby reducing turnover and keeping housing supply tight even as buyers remain strongly interested.
4. Modest Gains Reflect Market Stability and Appeal
In Chatham Township, there was a modest +4.1% increase in the number of home sales and in Berkeley Heights and New Providence, sales were relatively consistent with the prior year. These towns highlight resilient markets where homes continue to sell at a steady pace. Factors keeping inventory naturally limited rather than turning over in these vibrant towns include, for example, the excellent schools and a strong sense of community. If we add in the mortgage rate "lock-in effect" mentioned above, it is not surprising that the number of home sales in 2025 in these towns is virtually unchanged from the prior year.
Average Home Sales Prices - Rising, But in Different Ways
While the first-half of 2025 showed a multi-faceted picture in the number of homes sold across the 14 towns in The Minken Housing Index, average sale prices tell a different story. As illustrated in the chart below, home prices overall are rising, although the percentage increase varies by town. When we layer in changes in housing inventory, the market narrative becomes more nuanced. Here's how.
Some communities posted strong gains in average home sales prices even with modest or declining numbers of homes sold, reflecting tight inventory and high buyer competition. Other towns saw moderate price increases alongside healthy growth in sales, signaling a more balanced but active market. A few towns experienced slight price softening, showing that even in highly desirable commuter communities, local factors can influence pricing trends. Let's take a deeper dive into these varying scenarios.
1. Strong Price Gains Despite Lower Sales
Mountainside (+22%) and Chatham Township (+20.5%) saw significant growth in the average sales price even though the percentage change in the number of sales declined. As might be expected, the combination of limited inventory and ongoing buyer demand pushed up the average sales price in these towns. Scarcity of available homes for sale can drive buyer competition and thereby elevate home sale prices.
2. Balanced Growth in Sales and Home Prices
Some towns experienced both solid growth in the number of home sales and moderate average price increases: Montclair (+14%), Summit (+16.4%), Chatham Boro (+8.3%), Madison (+7.6%), and West Orange (+4.8%). These towns reflect a healthy market with supply and demand in greater balance. Home prices saw a steady rise without deterring buyers.
3. Moderate Price Increases with High Sales
Livingston (+6.9%) and Westfield (+7.5%) posted modest growth in average home sale prices while experiencing strong sales. This might suggest that while buyers are active in these towns, overall competition may have softened with more available inventory. There may be, for example, fewer "multiple offer" situations which could help keep home prices from climbing too steeply.
4. Slight Price Softening in a Few Towns
South Orange (-4.7%) and Berkeley Heights (-0.4%) saw small declines in average home sale prices while the number of home sales remained steady. This may signal more mid-market homes changing hands, instead of higher-priced luxury homes. A temporary shift in the mix of homes sold, rather than a drop in overall buyer demand in 2025, could spur home prices to soften.
What's the Takeaway for Buyers and Sellers?
If you are a buyer or seller and you are scratching your head and wondering, "what does all this mean," let me explain. The combined insights from the change in the sales volume (i.e. housing inventory) during the first-half of 2025 with the average prices of homes sold underscore how local factors are shaping the market. Real estate is ultra-local.
Tight inventory in some towns comprising The Minken Housing Index is driving up prices. In contrast, towns with more balanced markets with rising inventory allow both home sales and sale prices to grow steadily.
For buyers, some good news! The tide is turning and may be bringing, perhaps, a hopeful sigh of relief. Homes selling below the list price are becoming more common across many markets, not just in Northern New Jersey! As the housing market continues to shift, understanding which communities have limited supply versus those with more options is critical for your timing and home buying strategy.
For sellers, the market continues to be strong. The key, however, is laser-precision pricing of your home from the outset in order to capture top value. As the overall market shifts toward a buyer's market, pricing that is more "realistic," rather "aspirational" is crucial. In the event the list price misses the mark and Days on Market (DOM) accumulate without offers, sellers may need to consider taking a price reduction.
Speaking of price reductions... You may be surprised to learn that price reductions are the new current market "buzz!" Now that we have explored the top trends for the first half of 2025, let's continue the conversation about what you need to know about price reductions. So go ahead and grab your second beverage, if you like. There's so much more to delve into!
Price Reductions by Sellers - National Data vs. Local Trends
Nationally, price reductions are grabbing attention as the housing market shows signs of shifting. After years of a strong seller’s market, the landscape is beginning to change. Rising interest rates and a gradual increase in housing inventory are giving buyers more leverage. While demand remains strong, buyers now have the opportunity to take their time and select the home that best fits their needs. What was once a frenzied seller’s market, where buyers rushed in with aggressive offers, has been slowly evolving into a more cautious, “not yet ready to pull the trigger” type of market. This shift can leave many sellers perplexed and asking, “Why isn’t my house selling after just a few days on the market?”
Heading into the traditional slower summer months, more sellers were adjusting prices to stay competitive and attract offers. In June 2025, HousingWire reported that 39.5% of all active listings received a price reduction, which is the highest percentage for that month in 15 years!
While national data provides a broad snapshot, it’s still necessary to focus on local market dynamics to understand how buyers and sellers are truly navigating the market. Why? This is to help you secure the best possible deal.
When we look at data results based on The Minken Housing Index in Northern New Jersey, the picture looks very different. As shown in the chart below, there were a total of 222 properties that went Under Contract in July 2025 with accepted offers. In contrast, however, just 31 or 13.9% experienced one or more price reductions in Northern New Jersey. This is a sharp contrast from the national trend!
This lower percentage highlights that many homes in these Northern New Jersey commuter towns are often priced competitively from the start and are attracting buyers quickly. Below is a chart illustrating the number of homes in each town comprising The Minken Housing Index that had one or more price reductions prior to going Under Contract in July.
Understanding Price Reductions
A price reduction isn’t necessarily a sign that something is “wrong” with a home. It’s part of the market’s natural calibration process. Homes rarely sell at a single, fixed price. They sell within a price range that reflects both market demand and a buyer’s perception of value.
The real challenge is establishing the right price at the time of the listing. At Compass, we give our sellers the flexibility to “test the list price” before a home officially goes on the market. This is built into our 3-Phased Marketing Strategy. Briefly, here's how it works.
Phase 1 begins with the home marketed as a Compass Private Exclusive, giving Compass agents and their buyers a chance to preview it. During this initial phase, sellers benefit from valuable feedback on the property, including the list price. As a Private Exclusive, the property does not accrue days on market (DOM) and price adjustments, if any, are not publicly displayed.
Phase 2 is Compass Coming Soon. Here, the strategy is fine-tuned further based on the initial feedback. At this stage, homes are also shared across additional platforms and become searchable by consumers on the Compass website, broadening visibility before the full market launch.
Phase 3 is the public launch on the Multiple Listing Service (MLS) and other platforms, and now with pricing and marketing presentation optimized! By the time the property gets to Phase 3, the seller has been able to minimize any potential gap between the home’s list price and a buyer’s perceived value, often reducing the need for price cuts later on. And this is achieved without accruing any days on market (DOM)!
In a shifting market, this kind of flexibility and strategy is critical for sellers. It helps them stay ahead of surprises and position their home for success. And when a price reduction does come into play, it isn’t a setback! It’s a strategic tool to reposition the property and attract a wider pool of buyers, and perhaps even multiple-offers!
For sellers, a price reduction might mean re-engaging interest if initial activity was slower than expected. For buyers, a price reduction can signal a fresh opportunity to revisit a home that now fits more comfortably within their budget, or simply feels better aligned with their view of market value.
So when do sellers usually take a price reduction and how much might buyers expect to see? Price adjustments often happen about 30 days after a home is listed, depending on the seller’s goals and timeline. The size of the reduction generally varies by price point. According to The Minken Housing Index, homes over $1 million typically saw price drops in July 2025 of $100,000 or more, while homes below that threshold often reduced by $25,000 to $50,000 at a time.
It's important for sellers to recognize that making too small a cut can lead to multiple price reductions and a longer time on market. One home in Northern New Jersey, for example, went through three price drops: -$5K, -$5K, and then -$20K. This is a classic case of a seller “chasing the market.” Each small step was too little to spark fresh interest. In contrast, sellers who “rip off the band-aid” with a meaningful adjustment often don’t need to revisit pricing strategy again. A substantial price cut can move a home into a new “bucket” of buyers, creating new momentum and sometimes leading quickly to an accepted offer.
Looking Ahead
The first-half of 2025 has certainly offered some surprising insights for both buyers and sellers! Some towns in The Minken Housing Index saw strong growth in homes sold, while others stayed steady or dipped slightly, underscoring just how much local factors like school districts, walkable town centers, and the style of homes influence real estate activity.
In general, home prices are on the rise, but the 2025 percentage increases vary by town. If you are a seller, pricing your home "right" cannot be overemphasized. The level of inventory also plays a pivotal role. In some towns, limited supply keeps competition high, while in others, more options give buyers a little extra leverage. Price reductions are part of the story, too. Nationally, they’ve hit a 15-year high, but within The Minken Housing Index for Northern New Jersey, far fewer homes (13.9%) needed price cuts to ignite buyer interest and accepted offers.
In conclusion, understanding the local market, being strategic with pricing, and staying flexible can make all the difference for buyers and sellers alike. Knowing the trends in the specific town or neighborhood where you’re buying or selling is key to making smart decisions that can lead to a great deal.
Whether you’re a buyer ready to make a move or a seller deciding if now is the right time, having an expert at your side to help you navigate the nuances of the market is crucial. The market may hold surprises. However, with the right realtor guiding you, those surprises become opportunities you can act on with confidence!
If you have any questions about the housing market, or would like my assistance with buying/selling a home, please do not hesitate to reach out to me. Let's capture the golden opportunity in today's market!
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2025 Mid-Year Housing Market Insights: Surprising Trends Every Buyer & Seller Should Know
August 2025
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