Bubble bursting? How high is high? NJ housing market in 2022
Much has been said about the wild trends of the New Jersey housing market as the COVID-19 pandemic made Garden State residents first hunker down, then venture out, and finally make last-minute detours to their plans in 2021.
Some of the more outlandish home buying anecdotes may not repeat themselves in 2022, according to Robert White, incoming president of New Jersey Realtors.
"We saw multiple offers, 20 offers on a single property, averaging anywhere from $50,000 to $100,000 over the asking price, depending on the price point," White said, predicting that in the New Year, there might be closer to an average of six to 12 offers per property, at 3% to 5% over asking.
That is because White thinks the market, as active as it has been, has not yet even peaked. Inventory remains low, he said, and will need time to level out.
"We will start to see more inventory, so by that inventory coming into the market, will decrease that buyer anticipation of winning a bid," White said.
There is no "bubble" to burst, according to White, although costs may not continue climb as high as, to use an example from this year, 14% above the average home sale price.
And while it is true that interest rates are expected to be raised, perhaps several times, next year, they won't be going up too much.
It's a matter of perspective, White said.
"It's not going to go to 5% or 6%, it's going to go to maybe 3.5%, 3.75%," he said. "That doesn't necessarily take these buyers out of the buying pool."
'Prices are still rising and the buyer demand is still very strong, inventory is still low, and I think that will continue into 2022.'
When 2021 began, most New Jerseyans were concerned with getting out in the open after a year of being locked down, focusing their housing searches on large properties with backyards.
Those are still priorities, White said, but as the year went on, continued conflicts with remote learning and working from home meant that dedicated office space was also a must for many.
And that won't change even if New Jersey businesses eventually bring their workers mostly back in person; White said a home office is the "new normal."
Broad real estate trends can be difficult to predict even in the short term, but White is confident things will get off to a good start when the calendar flips to January.
"Prices are still rising and the buyer demand is still very strong, inventory is still low, and I think that will continue into 2022," he said.