From the Otteau Group:
NJ Home Sales Continue to Exhibit Strength
In March, the number of contract purchases by home buyers exceeded the same month in the prior year for the 31st consecutive month, reflecting a 10% increase over March 2016. Considering the 23% increase (y-o-y) in March of 2016, home sales have increased by 35% over the past 2 years. This latest gain was the highest number of purchase contracts recorded in the month of March of the past 12 years.
While the number of home sales occurring in New Jersey continue to rise, registering a 10% increase y-t-d, the largest gain has occurred for homes between $1.0-Million – $2.5-Million, which have increased by 20%. Home sales in excess of $2.5-Million have also been increasing for the first time in more than a decade. While it is still early in the year to draw any meaningful conclusions, there seems to be a correlation to improving economic indicators and consumer sentiment.
Shifting to the supply side of the equation, the supply of homes being offered for sale remains constricted, which is limiting choices for home buyers. The number of homes being offered for sale today in New Jersey has declined by nearly 8,700 (-17%) compared to one year ago. This is also about 32,000 (-43%) fewer homes on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 3.7 months of sales (non-seasonally adjusted), which is lower than one year ago when it was 4.9 months.
Currently, all of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices. Hudson County continues to experience the strongest market conditions in the state with just 2.2 months of supply, followed by Essex, Middlesex, Union, Monmouth, Morris, Bergen, Passaic and Somerset Counties, which all have fewer than 3.5 months of supply. The counties with the largest amount of unsold inventory (6 months or greater) are concentrated in the southern portion of the state including Cumberland (6.1), Cape May (6.5), Salem (6.7) and Atlantic (7.2), however, these counties are also beginning to exhibit strengthening conditions.