For the past few years real estate prices in the New Jersey suburbs soared. They’re still high, but more and more people are moving to another part of the Garden State — the Jersey Shore.
In towns like Ocean City, for example, nearly 21% more people moved in than left compared to the previous year, reports Bloomberg, with prices increasing since last spring. The New Jersey coast has seen a shortage of available homes since last fall — and many of the buyers are looking at Margate NJ real estate for second homes.
And many are paying for the privilege, with homes going upwards of $80,000 over the asking price, says Cape May County-based real estate agent Dan Higman.
Some of the hottest real estate in New Jersey is close to the water. Barnegat Township in Ocean County is where two large buildings of active-adult communities are building 600 luxury homes.
Cheap interest rates and low inventory have driven double-digit price growth throughout New Jersey, with the peak of prices expected for summer 2022. In Montclair, homes regular are sold for $60,000 over the asking price.
New Jersey real estate prices have seen a steady increase of 12% in 2020 and 15% in 2021. Multiple offers are commonplace. In 2022, prices will still rise, buyer demand will be strong, and inventory will continue to be low, says New Jersey Realtors President Robert White.
Even the most expensive Jersey Shore homes are getting scooped up fast. Homes in the area are regularly priced at least at the $1 million mark. Those homes are usually gone in days.
The Big Fall in Housing Stock
How low is real estate stock in New Jersey right now? In the spring of 2021, it was about half of what it was just a year prior. For example, in Randolph, there were nearly 150 homes listed in spring 2020. The following year there were 23.
The inventory level is being called unprecedented — and driving up the average home cost to over $500,000. The median sales price in January 2021 for a single-family New Jersey home was nearly $505,000, a 22% jump over 2020.
Single-family homes sold for about 100.2% of the listing price on average in 2021 and stayed on the market for just 44 days, a fall from 72 days the previous year. Closing and pending sales are also up 17% and 14%, respectively.
The Popularity of Shore Communities
Small New Jersey shore communities are driving much of the hot real estate market in the state, with many people escaping cities during the ongoing COVID-19 pandemic.
Experts see that trend continuing through 2022, with people attracted to relatively cheaper homes, walkable downtowns, and more outdoor space. Cape May and the Highlands are in high demand, especially with communities featuring outdoor dining and shopping districts and welcoming beaches and boardwalks.
Something — or someone — else is driving the strong market as well: millennials. More younger people are deciding to buy rather than rent, since rental costs have also soared, and are taking advantage of the fact that 30-year fixed-rate mortgages are averaging around 3%.
The numbers continue to speak for themselves. According to Zillow, home costs in Avalon were up 19% in 2021. And the average home value has jumped to $2.4 million so far in 2022.