“We’re now transitioning from a seller’s market … to a buyer’s market in which home buyers no longer feel a sense of urgency to buy quickly before prices go higher,” said Jeffrey Otteay, a real estate economist.
Home sales are down 17% since the beginning of the year and there are 7,000 more homes on the market than there were last year,
One measure to judge whether the market is a buyer’s or seller’s market is the “months’ supply” of homes for sale in an area. Months’ supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace, according to the National Association of Realtors.
“When you look at the inventory that’s out there, a lot of it is new home starts,” said Robert White, president of New Jersey Realtors. He said a new adult community in Howell, where properties were listed at $849,000, this month were being offered for $720,000 if the buyer can close by Oct. 31.
“I think you’re going to start seeing that in a lot of these communities,” White said. “When they build in phases, as they sell homes, they typically raise prices by a certain percent. Now, they’re forced to reduce prices back to Phase 1 if they’re in Phase 3.”
The largest supply of unsold homes is in the $1 million to $2.5 million price point and the more than $2.5 million price point, which each have 17% more unsold homes, according to data from the Otteau Group. Unsold homes are up 10% in the $600,000 to $1 million price group.
Unsold inventory is lowest in the under $400,000 price bracket where there are 22% fewer homes on the market. And it’s down 6% in the $400,000 to $599,000 range.
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