A cutthroat seller’s market, record-low inventory and tiny green spaces are housing trends to look out for, according to Michael Gonnelli, a Realtor with Re/Max Infinity in Secaucus.
“The real estate market has been a bullish market for sellers for a very long run,” Gonnelli said. “With the [Federal Reserve] beginning to increase rates we’ve seen a slight downturn, but in coastal hotbed areas like Northern New Jersey, it’s still very much a seller’s market. Perhaps the future of real estate in these heavily urban areas close to major metro cities will be micro-units and communal living areas. I’d also expect to see more green LEED-certified buildings for the eco-friendly buyer.”
Realtors like Gonnelli are focused on evolving trends on the heels of National Homeownership Month in June, a peak period for home buying. The initiative was created by the National Association of Realtors, which represents members of the residential and commercial real estate sectors nationwide.
To see what’s trending, one need only look at the Trenton area, which agents say is indicative of the rest of the state.
According to the June National Housing Report, 390 transactions closed in the Trenton area, with the number up 20.37 percent from May and 7.73 percent over the same period in 2017. Inventory was up 11.95 percent from the previous month but down 1.78 percent from last year. The median sales price, the report said, was $243,000.
But while millennials — one of the biggest drivers of real estate in the state — may be opting for smaller digs, they also are demanding big-time amenities and plenty of ways to get from Point A to Point B.
“The older days of the big dream house in the suburbs no longer reigns true for the millennial buyer working long hours looking to cut down on commute time,” Gonnelli said. “Many millennials are focusing their home searches in the Hudson County area of Northern New Jersey which is positioned perfectly across from NYC bordering the Hudson River. We’re seeing a trend for some time now of this specific demographic of buyers opting for smaller condo units in amenity-rich buildings with ample modes of transportation in and out of NYC.”
Jarrod Grasso, CEO of New Jersey Realtors, said the trend has been building for some time.
“Across the board, the housing market in New Jersey has been extremely competitive due to a low inventory and high demand, a pattern that has been occurring for the past several years,” Grasso said. “This makes it an opportune time for sellers, but also adds challenges for younger buyers, because they are being pushed out of the market with competitive prices. While millennials are more mobile than other generations, they are actually the largest share of home buyers.”
Thirty-four percent of home buyers nationwide are aged 36 years and younger, according to Grasso.
“Because baby boomers are downsizing, these two age groups are often competing for the same home,” Grasso said. “It’s predicted that this demand will remain strong as payrolls continue to increase, unemployment decreases and mortgage rates gradually rise. Homeownership is by no means a diminishing goal for Americans and continues to be the cornerstone of our economy and communities. Homeownership continues to be the most beneficial and important investment one can make.”
He noted the average sales price of a single-family home has increased by 1.3 percent since this time a year ago and is on the market for an average of 64 days, making it an opportune time for sellers.
Steven Kempton, a real estate professional with Re/Max Community in Williamstown, said inventory is at record lows in New Jersey.
“The lack of inventory spans the country,” Kempton said. “We just received an [multiple listing service] report over email today that inventory in New Jersey is at record lows — there are not enough sellers on the market. The New Jersey State first-time home seekers program provides $10,000 grants from the government to first-time home buyers. At this point last year, all of the government’s grant money for the program was used. That is not the case at all this year due to the lack of inventory.”
But Chiquita Pittman of Re/Max Platinum in North Brunswick said it’s not all rosy for sellers.
“Unfortunately, due to the inventory shortage, some sellers are forced to sit on the sidelines if they are under water with their property,” Pittman said. “While the number of year-to-date home sales have increased by 1 percent overall, it really differs depending on the price range, which is often not portrayed in the news.”
Gonnelli said home sellers who walk the walk when it comes to pricing and positioning will continue to control the market — and buyers should take note.
“Buyers need to recognize the strength of market and limited inventory and opportunity and strike hard and fast when they find the right home that fits their needs,” he said. “Buyers should also look towards a future of rising interest rates and attempt to secure a still historically low rate sooner rather than later.”