With fall right around the corner, some New Jersey home buyers are already looking ahead to 2018. And many are asking the same questions: What will the real estate market be like next year? Are home prices expected to continue rising? Is now a good time to buy a house, or should I wait a while?
To give you a bit more insight, we've rounded up some noteworthy statistics, trends and forecasts for the New Jersey housing market stretching through the summer of 2018.
Forecast for NJ Housing Markets Through 2018
Home prices in New Jersey have risen steadily over the last couple of years, following a broader national trend. But there's a chance we could see slower growth in the months ahead. New forecasts from the housing research team at Zillow suggest that home price growth could slow down in most cities and towns over the coming months.
But first, a look at current prices. According to New Jersey REALTORS, the median sale price for single-family homes sold across the state rose to $330,000 during the summer of 2017. The median for condos and townhouses rose to $260,000.
Zillow's forecast for the New Jersey real estate market suggests smaller gains over the next year or so. By their estimation, home prices in the state rose by around 5% over the last year (from Sept. 2016 to Sept. 2017). Looking forward, they expect the state's median home value to rise by a more modest 1.5% over the next year. This forecast was issued in September 2017 and extends into the same month of 2018.
That's the statewide outlook. When you zoom in to the individual towns, cities and metro areas, New Jersey real estate market predictions can vary quite a bit. That's because home prices and other real estate trends are driven by local economics, and these conditions vary by region.
For example, the latest forecast for the Jersey City, NJ housing market is much stronger than the broader statewide outlook. Analysts have predicted that home prices in Jersey City would rise by around 9% over the next 12 months (through September 2018)
This underscores the importance of doing localized research before buying a house or condo in New Jersey. There is a lot of diversity and variance among local real estate markets in the state. So you'll want to spend some time researching trends within the specific area where you want to buy.
Shifting to a Seller's Market?
The latest monthly snapshot from New Jersey REALTORS offered a succinct but insightful overview of current trends in the New Jersey real estate market. Their July 2017 report stated:
We are about two years into a national trend of dropping housing supply and increasing median sales prices. There are some regional variations to the story, but the shift to a predominantly seller's market is mostly complete. Multiple-offer situations over asking price are commonplace in many communities, and good homes are routinely off the market after a single day.
From this assessment, we can also shape some forecasts for the New Jersey real estate market extending into 2018. Home buyers can probably expect prices to continue rising, due to strong demand and (in some areas) limited supply.
Home Prices Expected to Rise More Slowly
The one thing that all of these towns and cities have in common is that home prices are expected to slow down a bit over the next year.
The latest forecasts for most New Jersey housing markets are predicting smaller home price gains over the coming months. But this is not a sign of market weakness. Far from it. Real estate markets across New Jersey are still very active with strong demand from buyers.
A future slowdown in price growth would have more to do with affordability than a lack of demand. House values across the state have risen faster than household incomes over the past couple of years, and that kind of trend can only last so long before "market corrections" begin to take place.
Mortgage Rates Could Creep Upward, According to MBA
On September 12, 2017, the Mortgage Bankers Association (MBA) updated its long-range finance forecast for the U.S. economy. This forecast offers predictions 30-year mortgage rates, among other things. And apparently, the industry group expects rates to rise gradually over the coming months.
According to Freddie Mac, the average rate for a 30-year fixed mortgage loan was 3.78% as of September 14, 2017. The MBA's economists predicted that 30-year rates could rise to around 4.2% by the end of 2017 (on average). Beyond that, they expect rates to inch upward throughout 2018 and possibly end next year somewhere around 4.9%.
Is Now a Good Time to Buy a House in New Jersey?
New Jersey housing market forecasts and predictions are the equivalent of an educated guess. So we probably shouldn't get too wrapped up in the exact numbers being presented here.
The key takeaway is that economists and analysts expect housing costs to continue rising through the end of 2017 and into 2018. This means that New Jersey home buyers who postpone their purchases until later next year could have less buying power. Given these trends and expectations, a strong case could be made for buying a home sooner rather than later.
Disclaimer: This article includes various predictions and forecasts for the New Jersey real estate market through 2018. These forward-looking statements were provided by third parties not associated with our company. We have presented them here as an educational service to our readers and customers.