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Temperatures begin to thaw, but housing inventory remains frozen

The year is just getting started, but the low inventory trend continues to lead the way in 2018, according to data from New Jersey Realtors®. Fewer homes on the market continue to drive up prices, but the number of sales is fairly stagnant. In February, closed sales saw a slight downturn, but the year-to-date median sales price rose a healthy 5.3 percent to $268,500.

Thirty-year fixed rate mortgages rose to the highest level since 2014, sitting now at 4.45 percent. First-time home buyers are weary of this pressure, but the rise could spur some on-the-fence buyers into action. Over a 12-month period, single family homes had the greatest number of closed sales, with an average of 6,866. Over the past year, single family home sellers received an average of 97.6 percent of the list price.

A very small increase in new listings didn’t help the total inventory, which was down 17.4 percent throughout the state. However, with selling season right around the corner, a rise in inventory is likely for the spring market. Properties spent an average of 75 days on the market in February, and while last year’s number was a week longer, it’s too early in the year to tell if this decline will continue through the rest of 2018.

“The low inventory continues to be a concern we’re keeping a close eye on,” said 2018 NJ Realtors® President Christian Schlueter. “But with the busy selling season closing in, we’re cautiously hopeful for a modest uptick. At first glance, rising mortgage rates might seem like a negative for the market, but we’re actually seeing the rates motivate buyers to make a move.”

Here’s a more in-depth look at the three housing categories New Jersey Realtors® tracks throughout the state.

Single-Family Market

Closed sales for single-family homes were up a meager 0.3 percent year-to-date and the average percent of the list price sellers received was 97.2 percent. New listings in this category have declined modestly, and the total number of homes for sale dropped a dramatic 17.7 percent which meant the months’ supply was only 4.5. The median sales price of single-family homes has increased, as was expected with the drop in inventory.

Townhouse/Condo Market

Closed sales fell a minute 0.6 percent in the townhomes/condo category year-to-date but the average percent of list price a seller received remained a stagnant 97 percent. New listings in February saw a 2.2 percent increase, but for the year there was a minor 1.3 percent decline. In total number of townhomes/condos for sale, there was a significant 17.6 percent drop compared to this time last year, which brought the months’ supply to 4.3. The median sales price for the year rose gently by 3 percent to $242,000.

Adult Community Market

Overall, the adult community market is the most unpredictable and ever-changing of the three housing categories. Year-to-date, closed sales dropped 2 percent and sellers in this category received an average of 96.8 percent of the list price. New listings weren’t spectacular, at a mere 1.8 percent increase in February, and the housing inventory spiraled down by 16.9 percent with just 3.3 months’ supply. The median sales price for the month rose by 9.1 percent, to $174,500 but spent 71 days on the market.

For more information and reports on the NJ housing market, visit njrealtor.com/data.

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