2021 Market Overview
The 2021 real estate market was yet another crazy ride. The lack of inventory was the story of the year and continues to be at the start of 2022. Active home sales were at all time lows in 2020 and have since dropped another 36% statewide. As a result, it was a very challenging and frustrating year to be a buyer as most homes that came to market went into a bidding war.
Single Family Active Homes for Sale in New Jersey End of Year
Overall, single-family homes sold above asking price across the entire state of New Jersey averaging 101.8% of list price in 2021. The outcome of this Seller's Market resulted in another surge in home values with the Median Sales Price increasing 18.9% in Ocean County and 13.8% in Monmouth County. Over the last 2 years, the Median Sales Price grew 31.8% in New Jersey, 35% in Ocean County, and 33.5% in Monmouth County.
Single Family Homes - Ocean County - Median Sales Price
*Brick Twp (Barrier Island) - Bay View Shores, Curtis Point, Deauville Beach, Mantoloking Shores, S Mantoloking and Normandy Beach
**South Seaside Park is part of Berkeley Township
***Toms River Twp (Barrier Island) - Chadwick Beach, Chadwick Island, Lavallette (not Boro), Monterey Beach, Normandy Shores, Normandy Beach, Ocean Beach, Ocean Beach I, II, & III, Ocean Beach Shores, Rutherford, Seacrest Beach, Silver Beach, Sunset Manor, W. Brighton, Ortley Beach, Pelican Island & Seaside Heights
Single Family Homes - Monmouth County - Median Sales Price
All data compiled from the Monmouth/Ocean multiple listing service.
Limited Inventory: Still a Seller's Market
There is not much light at the end of the tunnel for buyers in 2022 as there are still far more buyers than there are homes for sale. It is hard to see a year without values continuing to increase based on simple supply and demand. Sellers continue to ask a little more than the last comparable home sale, and buyers continue to pay the bill. If the current 1.4 Months Supply of inventory for Monmouth and Ocean County quadrupled, it would still be a Seller's Market by technical terms.
Financial Challenges
A couple of factors will help slow down the train. The first is interest rates have increased about 1% since hitting the floor in 2020 and are expected to continue to climb over the next year. These increases impact what a buyer may be willing to pay. As sellers attempt to create new highs in the market, buyers may begin to draw a line the sand. The second is an economic downturn. Ocean and Monmouth County markets are greatly influenced by the secondary home market. When there is any hit to the economy, luxury 2nd home purchases are often the first to be put on the back burner. A slowdown in coastal communities has a ripple effect to surrounding towns inland.
Housing Market 2022
Expect the first half of 2022 to mirror what we saw in 2021. Affordability constraints in the latter part of the year are likely to force buyers to put their foot down and subsequently home values will begin to plateau. Sale prices will continue to increase in 2022 in both Monmouth and Ocean Counties but at more moderate levels.
If you would like more detailed information on your local market or would like to determine the value of your home, please give the Paradise Team a call at 732-899-3338.