From Otteau Group:
After declining by 7% in April, home purchase contracts in New Jersey have increased for four consecutive months. In August, the number of purchase contracts rose by 3% compared to the same month last year. Considering the 18% increase one year ago in July of 2016, home sales have increased at a compounded rate of 22% over the past 2 years. This latest gain was the highest number of purchase contracts recorded in the month of August since 2005, signaling high demand. Overall, home sales have increased in New Jersey by 6% y-t-d.
While the number of home sales has increased across all price ranges this year, the largest gain has occurred for homes priced over $600,000, rising by 9%, while homes priced below $400,000-$599,999 have seen the smallest increases. It’s important to note that home sales in excess of $2.5-Million are increasing for the first time in more than a decade. The gains for more expensive homes is attributable to the continuing economic expansion which is causing greater confidence among higher income households.
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 more than 6,500 (-13%) compared to one year ago. This is also about 30,000 (-41%) fewer homes on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 4.1 months of sales (non-seasonally adjusted), which is lower than one year ago, when it was 4.9 months.
Currently, the majority (95%) of New Jersey’s 21 counties have less than 8.0 months of supply, which is a balance point for home prices. Hudson County is presently experiencing the strongest market conditions in the state with just 2.9 months of supply, followed by Middlesex, Essex, Union, Monmouth, Burlington, Bergen, Somerset, Mercer and Passaic Counties, which all have fewer than 4.0 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 Atlantic (6.8), Cape May (7.0), Cumberland (7.6) and Salem (8.3), however, these counties are also beginning to exhibit strengthening conditions.