From the Otteau Group:
Home sales in New Jersey increased by 2% in the month of May compared to the same month last year, recording more than 12,200 purchase contracts in a single-month, setting an all-time record. As a result, the number of year-to-date purchase contracts (January-May) in New Jersey is up marginally by 1%, or roughly 600 contracts. Statewide, the amount of housing supply remains tight, which continues to stifle the amount of home sales occurring. This is especially true for entry-level homes priced below $400,000 where there is only 3 months of supply.
While the number of year-to-date home sales has increased by 1% overall, that is not the case for all price ranges. Due to the aforementioned supply shortage of entry-level priced homes (below $400,000), contract activity has declined by 0.4% in response to a 14% year-to-date drop in inventory. Also recording a 2.2% decline, are contract sales for homes priced between $1-Million to $2.5-Million for which unsold inventory has also experienced a 3% decline. At the opposite end of the spectrum, contract activity for luxury priced homes over $2.5-Million has increased by an impressive 22%, which is somewhat misleading, given the smaller sample size of sales within this price point.
Shifting to the supply side of the equation, inventory remains restricted, which is limiting choices for home buyers. The number of homes being offered for sale today in New Jersey has fallen to its lowest point since 2005, having declined by 2,500 (-6%) over the past year. This is also 42% less than the amount of homes (31,000 fewer) on the market compared to the cyclical high in 2011. Today’s unsold inventory equates to just 3.5 months of sales (non-seasonally adjusted), which is lower than one year ago, when it was 3.8 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. Middlesex County has the strongest market conditions in the state with just 2.6 months of supply, followed by Essex, Union, Passaic, Monmouth, Somerset, Hudson, Camden, Burlington, Bergen & Warren Counties, which all have fewer than 3.3 months of supply. The counties with the largest amount of unsold inventory (5 months or greater) are concentrated in the southern portion of the state including Cape May (5.1), Atlantic (5.7), Cumberland (5.9) and Salem (6.8), however, these counties have shown vast improvement and are exhibiting strengthening conditions.