From Otteau Group:
After four consecutive months of increases, home purchase contracts in New Jersey were basically unchanged during the month of September, increasing by just 0.4%. This is compared to a 12% increase one year ago in September of 2016. Still, the number of purchase contracts last month was the most for the month of September since 2005, signaling continued high demand. Overall, home sales have increased in New Jersey by 5% y-t-d.
While the number of home sales has increased across all price ranges this year, the largest gain has occurred for luxury homes priced over $2.5-Million, rising by 14%, while homes priced under $600,000 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 rising confidence among higher income households while slower growth in lower priced homes is the direct result of shrinking inventory.
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 fallen to the fewest of the past 12 years, having declined by 6,000 over the past year. This is also about 31,000 (-42%) fewer homes on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to 4.7 months of sales (non-seasonally adjusted), which is lower than one year ago, when it was 5.4 months.
Currently, the majority (90%) 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 3.3 months of supply, followed by Middlesex, Essex, Union, Monmouth, Passaic, Bergen and Morris Counties, which all have fewer than 4.5 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 (6.8), Atlantic (7.5) and Salem (9.8), however, these counties are also beginning to exhibit strengthening conditions.