May 18 2022.. THE SHIFT IS ON

It is the world’s worst kept secret that the U.S. housing market has been as RED HOT as any market anyone has ever experienced.

With inflation on the rise and the fed lifting rates to attempt to slow the rate, we are seeing the residential local market here in NJ and throughout the nation start to cool. Let me be clear, the forecasts that I study consistently are all pointing in the same general direction. Slightly up.

In cooking terms, the market was like a pot of water with a rolling boil. We are seeing the temperature reduced and the pot is now simmering.

The last two years have seen most local municipalities with double digit increases in median selling prices, months of supply of homes at under 2 Months ( balanced market should be near 6 months), and a lower number of listings. Interest rates today on 30 year fixed rate mortgages are in the higher 5’s% compared to lower 3’s% last year at this time.

We all heard the stories of homes selling WAY over asking and bidding wars. Multiple offers ( I recently listed and sold a home that received 38 written offer).

Here is EXACTLY what we are starting to see.

1. A smaller very focused pool of buyers.
2. Buyers may have a smaller budget than even weeks ago
3. Turn Key Homes are still selling in days not weeks. Less offers than we were seeing just a month ago.
4. Pricing is more critical today. Stretching a listing price may NOT bring a swift result. A Seasoned listing agent will bring a stronger result. Overpriced  homes (based on condition, location, or just poorly priced) will begin to back up. Reductions and expired listings will increase
5. FSBO sellers are starting to experience discomfort. Qualified buyers have better chances to win their bids on listed homes and a deeper pool of inventory than FSBO
6. Sellers that are waiting for a cool off to improve opportunities on purchasing their next home CAN still do very well in this market.
7. Inventory will remain lower than usual. Best condition homes will continue to move VERY quickly with continued selling price growth. For those selling homes with less updating and older mechanicals and roofs etc will begin to see even fewer offers as a segment of buyers will no longer be willing to absorb the costs of remodeling. Price will be CRITICAL

If you have ANY questions about where we are today as always reach out. I am here for each and every one of you.

Best

Peter 908-601-4934

WWW.ListwithPeterHuntNJ.com