Feb 07, 2025
Contributor: Ajay Pradeep
New Jersey homes continued to sell at eye-popping prices last month. The median home sale price rose 9.6% year-over-year from $484,600 to $531,200 in January. Here are New Jersey Real Estate Market predictions for 2025.
The number of homes sold on the market increased by 10.4% YoY from 6,685 to 7,378 homes, with only 3 months of supply. Does the increase in houses make New Jersey a buyer’s market? Let’s look at the facts.
Interest rates are at record highs, with few home buyers. But the inventory is so low that 48.20% of homes sold above the list price!
- If You Are a Home Buyer: You can avoid bidding wars and avail seller concessions if you buy a home now. The 8.5% interest rate and mortgage payments are significant, but rates are unlikely to drop in the next few months. If they do, you can refi.
- If You Are a Home Seller: You can lock in New Jersey’s high home prices. The scarcity of homes in NJ makes it a seller’s market. Homes listed on MLS sell faster and for 17.5% more than off-MLS homes. That could be thousands of dollars in additional proceeds.
The current New Jersey real estate market statistics reflect the national trend of high demand and low supply. Despite the strong housing demand, home sales tanked. The property prices in New Jersey have increased regardless.
So, How Is the Real Estate Market in New Jersey?
Swell! Home values in New Jersey rose by 49.1% in the last 5 years. Home sales decreased by 1.9% in January 2025 YoY. Maybe due to the mortgage rate climbing to a two-decade high of nearly 8%! And the number of houses for sale in NJ was 20,527 in the month, 16.7% less than in 2023. New Jersey’s housing market is bearish.
The decrease in home sales can be attributed to not having enough properties in Garden State. The months of supply is 3 months, which makes NJ a seller’s market. So, if you want to sell a New Jersey property, now is the right time to list it on MLS.
» What is My Home’s Worth in 2025: Find your home’s market value in amid 2025’s current housing trends.
Current Trends in New Jersey’s Market
- Average Home Prices: New Jersey’s median home price is $531,200, up by 9.6% YoY. In 2025, the median sale price will keep increasing marginally due to NJ’s tight inventory. The sale-to-list price ratio is at 101.1%.
- Home Sales: As per January 2025 data, home sales increased by 10.4% YoY! In January 2025, only 7,378 homes were sold.
- Average Rent Prices: Rental costs vary statewide. An average tenant in Princeton pays $2,514, while the one living in Newark pays $1,465.
- Median Days on Market: The median days on the market for homes for sale was 40 days, up 2 days YoY.
- Pending Sales: The number of homes for sale declined by 1.9% YoY compared to 2024. Currently, there are 20,263 homes for sale in New Jersey.
- Months of Supply: The average month of supply is 2 months. NJ’s demand can’t be satiated with the low supply. NJ’s house scarcity is worse than the national housing market.
New Jersey Housing Market Predictions 2025
New Jerseyans have survived the shockwaves of skyrocketing mortgage rates and rising home prices of 2024. Here’s what we predict for New Jersey’s housing market in the upcoming year:
- Home Sellers Will Return to the Market in 2025: Sellers who chose the sidelines in 2024 will come back. Especially those who can’t avoid new jobs or want to move to a cheap place. Whitney, the analyst who predicted the 2008 financial crisis accurately, has forecasted that baby boomers looking to downsize will also add up to 30 million housing units.
- Mortgage Interest Rates Will Stabilize by the 2nd Half of 2025: Mortgage rates hit 7.79% in October 2024, the highest level in 23 years. However, the rate dropped to 7.35% in November due to the softening labor market and slowing economy. Even the annual inflation rate went from 3.7% to 3.2%. We think the rates will remain above 6%, but they will stabilize in the second half.
- The Number of Home Buyers Will Rise: The historically high interest rates averted buyers in 2024. But mortgage demand rose after the interest rates lowered to 7.35% in November. The easing inflation and stabilizing rates will bring back house hunters.
- Home Prices Will Continue to Rise: Home prices rose steadily in the top metros across NJ YoY, reaching $494K in January 2024. Experts predict home prices will continue to rise until the low supply-high demand dynamic changes.
- New Home Constructions Sales Will Increase: 12.3% of homes purchased in September were new homes, the highest since 2022. Home builders offered $30,000 worth of concessions to attract buyers in 2024. We think builders and sellers will compete for home shoppers in 2025.
- Buyers Will Continue to Make Lowball Offers: Buyers offered 104.1% of market value in 2021. They offered 86% in 2022 and around 70% in 2024.
Will the Housing Market Crash in New Jersey?
Even though Americans are moving out of the Garden State, a housing market crash in New Jersey is unlikely.
New Jersey’s cost of living is 15% higher than the state’s average. The average cost of living for one person in Princeton, NJ, is $3,110, making it one of the most expensive places to live in NJ.
Primarily, retirees are moving out of the state because they can no longer afford the seaside tourist lifestyle. The unemployment rate also increased to 4.6% because residents joined the labor force.
But, New Jersey has the fifth highest median household income of $85,000. The state also ranks fourth with $817,346 as an annual income in the top 1% of rich Americans list of 2024.
And, New Jersey’s job market is steady. Seven out of the nine private sectors in NJ added 67,000 jobs from 2022 to 2023. The vibrant nightlife and sunkissed beach boardwalks will attract home shoppers to the Garden State in 2025.
2025: Is It a Buyer’s or Seller’s Market?
2025 will be a terrific market for sellers. (And buyers, too!)
Home prices in New Jersey are rising and will continue to rise till the supply-demand dynamic changes. The number of houses for sale in NJ was only 20,527 in January 2025. There is very limited inventory to satiate the demand from house hunters. This also makes it the best time to sell a house in New Jersey.
In fact, after the mortgage rate plummeted from a two-decade-high rate of 8% to 7.28% in January, new listings rose. This shows that those who refused to sell due to mortgage rate lock are finally acclimatizing to 7% rates. Come Spring 2025, more homeowners will follow suit and list properties on New Jersey MLS.
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As home listings in New Jersey increase, home shoppers hugging the sidelines will also return. In fact, the recent uptick in mortgage applications shows that buyers are returning.
House hunters who could not find affordable homes in 2024 will also start shopping in 2025. The demand for New Jersey houses will increase – and that’s why sellers may be able to dominate the market.
However, new builds will compete for attention from buyers. Home builders have persuaded buyers to buy new construction homes with mortgage buydowns worth $30K in 2023! Builders will continue offering concessions in 2025, and home sellers may have to wage wars against them.
Listings of new constructions, baby boomers looking to downsize, and desperate home sellers will flood the market in 2025. The properties for sale in New Jersey will increase. So, whether you are looking for a condo in Camden County or seeking a home with a pool, you will find your dream home this spring.
