Price Points Where NJ Homes Are Becoming More Affordable
Q: Gerald, you said that home prices eventually have to level off at some point. When do you think that will happen? Liam, Clark, NJ
A: Home prices have already begun to decline in some municipalities in NJ, particularly for homes selling for less than $400,000. At the high end of the NJ real estate market, the number of homes for sale is growing as the ratio of home buyers to home sellers is tipping to favor buyers. For homes selling for over $2.5 million this has already happened, so expect home sellers at these price points to either lower their offering prices or take their homes off the market. The number of homes for sale is also increasing for homes for sale between $600,000 and $2.5 million–if this trend continues and the number of home sellers outpaces the number of buyers, expect home prices to level off and perhaps drop at those price points also. Higher mortgage interest rates are to blame for most of what we’re seeing in residential real estate markets right now, however, supply and demand almost always plays the biggest role. Since builders are currently only building about 10,000 homes a year in NJ (down from a historic average of between 30,000-50,000 homes built per year), the number of homes for sale in most places is still too low to expect home prices to decline but it depends on the specific town and neighborhood. Thanks for your question, Liam.
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