NJ Market Conditions Member Poll Recap

With housing inventory at an all-time low, rising median home prices, and high interest rates, New Jersey Realtors® member poll reveals the housing market is showing signs of a cooldown. Each quarter, New Jersey Realtors® conducts a poll with comprehensive data from members on what’s happening in the real estate market and how market conditions are affecting their practice and client satisfaction. A total of 715 members participated in the latest New Jersey Realtors® survey. Members rated their experiences through a variety of factors including their confidence in the local housing market, expected home prices, client satisfaction, and more.

Market Cool Down

In the third quarter, members report the market is cooling off. While overall economic conditions of their areas appear to remain positive, members who say conditions are excellent/good continues to trend downward and is at its lowest point since July of 2020.

Many respondents report the downward trend is due to low affordability and increasing mortgage payments. With the cost of buying a home about 80% more expensive than three summers ago, according to the National Association of Realtors®, some buyers are holding off on purchasing homes until the market steadies.

55% of members rate current economic conditions as excellent or good, while 45% rate conditions as either fair or poor. Excellent and good ratings have declined sharply from their peak in July of 2021 and are lower than summer 2020. Despite the continued decline in economic conditions, the percentage of members who are very or somewhat confident in their local housing market rose from last month, from 65% to 73%.

Housing Inventory Drops

Three in four members worry about housing inventory, noting the concern for the number of homes available began at the start of the pandemic in April of 2020. Although low housing inventory proves to be a concern for 75% of members, there is a significant drop in members reporting inventory worries—last quarter, 91% of members reported concerns. One member from the survey said, “Prices are still going up because of the lack of inventory so in order for the buyer to afford a home they must restructure and cut back on the must haves.”

Rising Mortgage Interest Rates Fueling Housing Halt

Client satisfaction is up modestly but rising mortgage interest rates are impacting confidence in the local housing market. Reported dissatisfaction among clients is down from our previous survey, with 59% saying their clients are very or somewhat dissatisfied with the housing options in their price range compared to the 70% who said the same in last quarter’s survey. According to the latest survey, one member reports “First-time buyers are being priced out of the market,” while another reports, “Buyers are in a waiting pattern since the higher interest rates/higher prices and their budgets have made buying not an option.” Realtors ® also report if their current clients are unable to find a home that meets all their “must haves,” is in their price range, and in their ideal location, they are willing to withdraw from the market completely until the market improves. There is a silver lining, however, with 62% of members reporting they expect home sale prices to decrease in their area 12 months from now.

New Lead Remediation Requirements

More than four-in-five members say they have heard about new rules for lead paint remediation in one- and two-family rental units built before 1978.

Member Satisfaction

Only 24% of members say they are better off financially than they were one year ago which is down from 26% last quarter, and 42% last summer. One third say they are more financially strapped than they were a year ago–the highest since April 2020. According to the survey, many members are pessimistic about their own real estate practice, but the rise in members who are very or somewhat confident in their local housing market from last month signifies hope for a positive change in the market next quarter.

Regardless of the obstacles current economic conditions are causing for many members, there is still some optimism for what’s to come in New Jersey’s housing sector.