The median listing price of a single-family residence in New Jersey has risen by nearly $100,000 over the past 12 months per the most recent data compiled by New Jersey Realtors. The statistics indicate that the average home price for January 2021 was $500,628, up 24% from the median $403,785 that time last year. The drastic rise is attributable to a reduced inventory and increased demand from potential homebuyers. With the inventory projected to remain on the lower end of the spectrum for the foreseeable future and demand anticipated to stay elevated, a majority of properties are being sold over asking price in the current market and that is driving up home values as appraisers are quoting higher numbers based on this unique set of market dynamics.
Although other economic sectors across the state have lagged as the pandemic continues to impact virtually every facet of business in a negative manner, the New Jersey real estate market has experienced an unprecedented boom and is showing no signs of slowing down anytime soon. Charles Oppler, CEO of Prominent Properties Sotheby’s International Realty and 2021 President of the National Association of Realtors, relayed that the state saw a dramatic 7.5% increase in units and an approximate 25% spike in average sales price over the past year alone—with demand skyrocketing to such an extent that over 50% of all state home transactions closed in excess of the asking price.
Even with a record-setting low point in terms of inventory, there is no corresponding shortage of qualified millennials yearning to purchase their first home. The young generation accounted for around 70% of all home contracts thus far in 2021—an influx of transactions that assisted in turning around a temporary market downturn experienced during the initial stages of the coronavirus lockdown.
A capped inventory of available properties, tons of eager buyers and historically low interest rates have all simultaneously converged to collectively create the ideal seller’s market—with those listing their properties reaping the financial rewards of home appreciation rates that jumped more than 20% in some New Jersey local markets. The amount of New Jersey properties listed for sale is approximately a third of what would compose a healthy real estate market, with industry experts projecting that it could take more than four years until the housing inventory eventually stabilizes.
The New Jersey real estate market has seen an impressive 11 consecutive years of year-over-year growth, and there is nothing to suggest that this trend will be interrupted. As more and more corporate entities embrace telework solutions and virtual commerce, former commercial spaces could potentially be given new life as residential units—offering a potential solution to the chronic inventory gap. And even though there is still a noticeable demand for large-lot residences, urban areas such as Hoboken and Jersey City experienced the highest volume of transactional activity across New Jersey last year—suggesting a potential return to normalcy despite the fact that the pandemic is still not fully in recession.
This is exciting news for real estate investors of all types. Whether you are looking to snap up a lucrative fix-and-flip project or plan to purchase and rent out a home for passive income, now is the time to leverage the benefits of a hard money loan to acquire in-demand properties before you get beaten out by the competition. And thanks to Gauntlet Funding’s efficient and flexible lending programs, you’ll have the money you need on hand to fund your next acquisition without having to worry about a lengthy underwriting process.
New Jersey Real Estate Market Continues to Boom—Projected to Sustain Increased Activity | Gauntlet Funding – Melville, NY