New Jersey Real Estate Report

From Newsweek:

Price Correction ‘Worse Than 2008’ Coming To US Housing Market—Analyst

The only transactions that continued happening in the U.S. market at volume this spring and summer, she said, were for higher-priced homes. “You have this bifurcated housing market, but the majority of folks transacting are in these upper tiers, so your median [home price] is going to be higher,” Wright said.

“However, what I’ve been seeing over the last three months, and this is—I get into the dirty dirty details—underneath the covers, that $100,000-$250,000 sales price, we are starting to see incremental increases in sales in that category,” she added.

“And so as it continues, it will start to drag the median down. It’s happening already and that’s where we’re seeing the deceleration,” Wright said, adding that we are going to end the year with “flat” home price growth.

Steeper cuts will come later, she warned. “It’s going to be worse,” she said, when asked to make a prediction about 2026. 

Wright is expecting a big drop in home prices next year, as investors who are not making money from their properties withdraw from the market.

“What happened last time was, we were on our way down to where household median income would actually match home median prices, but we never got there because Wall Street came in to buy those [homes],” Wright said. 

“But now they’re crying on TV,” she said, adding that some investors are claiming they were asked by government-backed mortgage agencies to intervene and purchase those properties. 

“They’re going to start crying a lot louder soon and say, ‘Hey, we saved you, government.’ And so, who’s the buyer now?” Wright said she fears the government might be forced to step in as “the buyer of last resort.”

Another fear Wright has is about the quality of the homes that investors are likely going to be leaving behind. “In the last cycle, remember how many all-cash buyers we’ve had? When these are not on a bank’s balance sheet, there’s nobody that’s going to be cutting the grass, there’s nobody that’s going to be winterizing that home, taking care of the mold problem,” she added.

“And so I think we could see this kind of devolve into chaos a lot faster than we did last time as many investors abandon these properties.”

Wright then said that next year home prices might correct to the point where they match the median household income. In 2024, according to data from the U.S. Census, that median was $83,730.

That is going to be a price decline “near your 50 percent,” she said. “And much greater in certain areas.”

From Redfin:

U.S. Luxury Home Prices Jump 5.5% in October, Triple the Pace of Non-Luxury Homes

U.S. luxury home sale prices rose 5.5% year over year to a median $1.28 million, a record high for the month of October. Luxury home prices are growing roughly three times faster than  non-luxury prices, which rose 1.8% to a median of $373,249.

That’s according to an analysis of home sales from August through October 2025. Redfin defines luxury homes as those estimated to be in the top 5% of their metro area’s price range, while non-luxury homes fall into the middle 35th–65th percentile. All figures are based on rolling three-month periods and are subject to revision.

Price growth at the high end outpaced the middle of the market again in October, a trend that has persisted for much of the past two years. The difference in price growth between luxury and non-luxury homes underscores how differently wealthy buyers are behaving compared with typical move-up or first-time buyers.

“Luxury buyers are still able to move forward in ways that many typical buyers can’t right now, whether that’s because they’re paying in cash, benefiting from stock-market gains, or taking out smaller loans,” said Redfin Senior Economist Sheharyar Bokhari. “Those advantages make them less sensitive to high mortgage rates, which helps keep demand at the top of the market steadier. In contrast, a lot of middle-income buyers are holding off until monthly payments come down or their financial outlook improves.”

Closed sales in both the luxury and non-luxury segments rose from a year earlier, but remain close to their lowest October levels over the past decade. Luxury home sales were up 2.9% year over year and non-luxury sales rose 0.7%, but both increases are off historically low baselines as higher mortgage rates and elevated prices continue to suppress overall activity.

“The luxury market has been a little more protected over the past year, compared to non-luxury or starter homes,” said Jonathan Buch, a Redfin Premier Agent in West Palm Beach, FL. “Affordability challenges have made it more difficult to sell homes priced under $800,000, but high-end properties are still moving.”