As we step into the vibrant season of Spring, the burning question on many minds is: How is the housing market shaping up? Real estate is anything but uniform. It's ultra-local and varies from town to town. The first quarter of 2024 brought about some unexpected twists and turns in Northern New Jersey. So find your comfy chair and prepare to delve into the fascinating data of The Minken Housing Index. It's time to uncover the key trends that are shaping the local housing market landscape.
The 2024 Housing Market - It's Unlike Any Other
In the first quarter of 2024, the average 30-year fixed mortgage rate remained elevated. According to FreddieMac, the average for the quarter was 6.75% in 2024 compared to 6.37% in 2023. So how did buyers and sellers respond? Did home prices come down as buyers retreated to the sidelines? Did sellers relinquish their low-mortgage "handcuffs" and place their homes on the market? It's a head-scratcher! And here's why.
Looking at the 1st quarter 2024 housing data across 3 counties here in Northern New Jersey, it's clear that the real estate market is unpredictable. Based on The Minken Housing Index, the 2024 market is showing some very strong gains in housing inventory compared to the prior year. As indicated in the chart below, 43% of the towns comprising The Minken Housing Index saw a significant increase in the number of homes sold during the 1st quarter of 2024, ranging from +20.7% in Millburn/Short Hills up to +225% in Mountainside. In sharp contrast, however, other towns saw a continued decrease in inventory of homes sold, ranging from -11.6% in West Orange to -37.8% in Chatham Township.
Thus, depending on where you're looking to buy a home this Spring, inventory might be either lower or higher than it had been the year before. This is good news! Why? Because this is a new trend. As discussed in my January article, 93% of the towns comprising The Minken Housing Index showed a decrease in the total number of homes sold in 2023 compared to the prior year! The already low inventory of 2022 became an even "tighter housing squeeze" in 2023. Therefore, 2024 is looking to be a different real estate market!
The Rise in Home Sale Prices Continues
If inventory levels are increasing in some areas and decreasing in others during the 1st quarter of 2024, what does this mean for home prices? Are towns that are experiencing a greater number of home sales compared to the same period in 2023 seeing home sale prices come down? Take a look at the chart below. Home prices, with the exception of 2 towns in The Minken Housing Index, are all moving in the same direction. Home sale prices are rising!
How high are home prices rising? As shown in the chart below, home prices in the towns comprising The Minken Housing Index ranged from +4.4% up to +51.1% in the 1st quarter of 2024 compared to 2023. This includes 4 New Jersey towns that had over a 20% rise in home sale prices: Montclair (+24.2%), Berkeley Heights (+26.9%), Livingston (+27.2%), and Mountainside (+51.5%). It is interesting to note that Mountainside averaged the highest percentage increase in both the number of homes sold and home sale prices in 1st quarter 2024 compared to the same period in 2023.
What are the average home prices in these New Jersey towns? As indicated in the chart below, the average home sales price by town in the 1st quarter 2024 ranges from $633,925 in West Orange up to $1,821,831 in Millburn/Short Hills.
Approximately two-thirds of the New Jersey towns comprising The Minken Housing Index have an average home sales price of over $1 million in the 1st quarter of 2024. It is interesting to note that just a few days ago (April 4th), USA TODAY reported that New Jersey is the only state to add more "million-dollar cities" in 2023 than any other state. The article also reported that New Jersey ranks the third highest state (after California and New York) with 49 "million-dollar" cities. Home sellers take note. This is a prime time to sell!
How high are home prices rising? As shown in the chart below, home prices in the towns comprising The Minken Housing Index ranged from +4.4% up to +51.1% in the 1st quarter of 2024 compared to 2023. This includes 4 New Jersey towns that had over a 20% rise in home sale prices: Montclair (+24.2%), Berkeley Heights (+26.9%), Livingston (+27.2%), and Mountainside (+51.5%). It is interesting to note that Mountainside averaged the highest percentage increase in both the number of homes sold and home sale prices in 1st quarter 2024 compared to the same period in 2023.
What are the average home prices in these New Jersey towns? As indicated in the chart below, the average home sales price by town in the 1st quarter 2024 ranges from $633,925 in West Orange up to $1,821,831 in Millburn/Short Hills.
Approximately two-thirds of the New Jersey towns comprising The Minken Housing Index have an average home sales price of over $1 million in the 1st quarter of 2024. It is interesting to note that just a few days ago (April 4th), USA TODAY reported that New Jersey is the only state to add more "million-dollar cities" in 2023 than any other state. The article also reported that New Jersey ranks the third highest state (after California and New York) with 49 "million-dollar" cities. Home sellers take note. This is a prime time to sell!
Going Beyond the Housing Data
So what does this data mean for you if you are considering buying or selling a home in 2024? It is important to know that at present, there is an over-supply of potential buyers, some of whom have been "waiting in the wings" for their dream home, others who've made offers but none were accepted and thus are still searching, as well as many new buyers who are just now beginning their home search journey. However, even with the increased inventory experienced in some areas here in Northern New Jersey, we are still seeing multiple-offers on properties that are reasonably priced and show well. Indeed, buyer competition is fueling the rise in home sale prices.
Despite the potential buyer concern about current mortgage rates, there is still a significant number of buyers who have the financial capability to pursue homeownership. Not only is buyer demand high, but many buyers are favoring homes that are fresh, modern, and overall move-in ready. In other words, buyers are selective. They are on the hunt for the "right" inventory that resonates with them. And some buyers are making extreme offers, hoping they will be victorious in securing their dream home. How high are the winning offers?
In nearly two-thirds of the towns comprising The Minken Housing Index, the winning offer was greater than 25% above the list price. One town saw the winning offer reach as high as 63.6% above the list price!
Despite the potential buyer concern about current mortgage rates, there is still a significant number of buyers who have the financial capability to pursue homeownership. Not only is buyer demand high, but many buyers are favoring homes that are fresh, modern, and overall move-in ready. In other words, buyers are selective. They are on the hunt for the "right" inventory that resonates with them. And some buyers are making extreme offers, hoping they will be victorious in securing their dream home. How high are the winning offers?
In nearly two-thirds of the towns comprising The Minken Housing Index, the winning offer was greater than 25% above the list price. One town saw the winning offer reach as high as 63.6% above the list price!
The Offer Process Begins Before the Offer is Made
In this environment, the expertise and guidance of a top-notch real estate agent are more crucial than ever for buyers. As I often say. "timing is everything in real estate," and buyers need a professional realtor who can act swiftly and decisively. A knowledgeable real estate agent can help buyers navigate the fast-paced market, ensuring that they are well-prepared to make their best offers and negotiate effectively throughout the home buying process. Are you aware that the offer process actually begins before the offer is ever made?
Adding to the complexity of the housing market is that some homes never make it onto the Multiple Listing Service (MLS). These homes are "off-market" transactions. Among the homes sold in the 1st quarter of 2024 according to The Minken Housing Index, there were 16% that had zero Days on Market (DOM) and did not trade on the MLS, This means that buyers may miss out on valuable opportunities in the absence of the essential knowledge and access that a skilled buyer agent provides. These off-market properties often require a well-connected agent who can leverage their agent-to-agent network to uncover these hidden gems. And in this tight inventory market, wouldn't you want a competitive edge if you are looking to purchase a home?
Exceptional realtors, or as I like to refer to them, "rockstar" realtors, provide comprehensive support throughout the home buying journey. For instance, what happens if after an offer is accepted, the home inspection reveals that the roof is "well-beyond it's expected lifespan?" This is a common home inspection finding, and how effectively it is negotiated, varies significantly with the experience of the buyer's agent. And this is just one of many potential issues that may arise during home inspection!
Moreover, given the fluctuating nature of mortgage rates, buyers would benefit highly from the guidance of a trusted real estate advisor who can provide valuable insights into financing options, in addition to a winning offer strategy. The knowledge of current market data and trends, potential property listings both on and off the MLS market, and the ability to safeguard a buyer's interests when possible concerns arise on the path from offer acceptance through closing, are just some of the "must-have" skills of a top-notch realtor.
With the current dynamic market of relatively low housing inventory, rising home prices, and an abundance of buyers, the expertise of a tried and true "rockstar" realtor is absolutely indispensable and invaluable. I help my clients with all aspects of preparation for the 2024 market to hit the ground running and take decisive action when the time is right. Additionally, I provide customized, caring, and comprehensive support throughout the entire home buying and selling process. As an example, I help sellers attract multiple offers and get the top dollar sales price with the most favorable terms. Also, I help buyers find the "window of opportunity" in the market to have their best offer accepted when they discover the house they want to call "home".
Where you choose to live profoundly shapes the trajectory of your life for years to come. The right realtor can make all the difference in your peace of mind and your financial security, saving you a significant amount of time, trouble, and effort. With the myriad of twists and turns of the current market, the expertise of a "rockstar" realtor is imperative for achieving your real estate goals.
Adding to the complexity of the housing market is that some homes never make it onto the Multiple Listing Service (MLS). These homes are "off-market" transactions. Among the homes sold in the 1st quarter of 2024 according to The Minken Housing Index, there were 16% that had zero Days on Market (DOM) and did not trade on the MLS, This means that buyers may miss out on valuable opportunities in the absence of the essential knowledge and access that a skilled buyer agent provides. These off-market properties often require a well-connected agent who can leverage their agent-to-agent network to uncover these hidden gems. And in this tight inventory market, wouldn't you want a competitive edge if you are looking to purchase a home?
Exceptional realtors, or as I like to refer to them, "rockstar" realtors, provide comprehensive support throughout the home buying journey. For instance, what happens if after an offer is accepted, the home inspection reveals that the roof is "well-beyond it's expected lifespan?" This is a common home inspection finding, and how effectively it is negotiated, varies significantly with the experience of the buyer's agent. And this is just one of many potential issues that may arise during home inspection!
Moreover, given the fluctuating nature of mortgage rates, buyers would benefit highly from the guidance of a trusted real estate advisor who can provide valuable insights into financing options, in addition to a winning offer strategy. The knowledge of current market data and trends, potential property listings both on and off the MLS market, and the ability to safeguard a buyer's interests when possible concerns arise on the path from offer acceptance through closing, are just some of the "must-have" skills of a top-notch realtor.
With the current dynamic market of relatively low housing inventory, rising home prices, and an abundance of buyers, the expertise of a tried and true "rockstar" realtor is absolutely indispensable and invaluable. I help my clients with all aspects of preparation for the 2024 market to hit the ground running and take decisive action when the time is right. Additionally, I provide customized, caring, and comprehensive support throughout the entire home buying and selling process. As an example, I help sellers attract multiple offers and get the top dollar sales price with the most favorable terms. Also, I help buyers find the "window of opportunity" in the market to have their best offer accepted when they discover the house they want to call "home".
Where you choose to live profoundly shapes the trajectory of your life for years to come. The right realtor can make all the difference in your peace of mind and your financial security, saving you a significant amount of time, trouble, and effort. With the myriad of twists and turns of the current market, the expertise of a "rockstar" realtor is imperative for achieving your real estate goals.
The Minken Housing Index - The Rise in Home Sale Prices Continues
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