From the Otteau Group:
Home purchase demand in New Jersey increased for the 18th consecutive month in February rising to more than 8,000 home-purchase contracts. This was the highest number of purchase contracts recorded in the month of February since 2005, reflecting an impressive 26% increase compared to the same month one year ago.
On a year-to-date basis (January-February) home purchase demand in New Jersey continues to expand, increasing by 22%. The majority of this year’s increase has been concentrated in homes priced below $600,000, as first-time ‘Millennial’ buyers begin to transition from rentership to homeownership.
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 February increased slightly by 1,400 homes (3%) compared to one year ago. Still, this is about 26,000 (-35%) fewer homes on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 5.9 months of sales (non-seasonally adjusted), which is less than one year ago when it was 7.2 months.
Currently, more than three-fourths of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices. Hudson is presently experiencing the strongest market conditions in the state with fewer than 4 months of supply, followed by Union, Essex, Somerset and Morris Counties, which all have fewer than 5 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 Atlantic (13.6) and Salem (14.3).