From the Otteau Group:
MarketNEWS October 30, 2015
Home purchase demand in New Jersey increased for the 13th consecutive month in September with more than 8,000 home-purchase contracts. This was the highest number of purchase contracts recorded in the month of September since 2005, reflecting a 15% increase compared to the same month one year ago.
While we have some concern about a developing slowdown in secondary markets like Camden and Sussex counties, the Fed’s decision to keep interest rates low should act as an accelerant for home sales heading into 2016. Also encouraging, is a 17% increase for homes purchased by first-time buyers this year which will provide broad support for continuing home sales activity for the next year or so.
While home purchase demand continues to rise, the inventory of available homes remains constrained in New Jersey. The number of homes being offered for sale in the month of September declined by more than 1,400 homes (-3%) compared to one year ago. This is about 19,000 (-26%) fewer homes on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 6.7 months of sales (non-seasonally adjusted), which is less than one year ago when it was 7.9 months.
Currently, 67% of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices. Hudson, Union, Essex, Somerset, Ocean, and Morris Counties are presently experiencing the strongest market conditions in the state with fewer than 6 months of supply. All of the counties with an unsold inventory level equivalent to a supply of 12 months or greater are concentrated in the southern portion of the state including Salem (14.3) and Atlantic (14.6).