In the first days of the new year, New Jersey analysts predicted that New Jersey’s beleaguered housing market is poised to make a comeback in 2024 if interest rates continue to fall.
Home sales in the Garden State plunged 23% last year, even as prices rose. And for now, inventory is very low. But analysts told NJ Spotlight News that the market could change if the Federal Reserve decides to lower interest rates.
“I’m very optimistic,” says Gloria Monks, president of New Jersey Realtors. “I do feel that buyers will have more of an opportunity to come back into the market. If indeed the interest rates do come down, it is going to give them much more buying power. It’s hundreds of dollars every month in their pocket once that occurs.”
What can buyers and sellers expect? For now, Realtor.com forecasts an almost 11% drop in existing home sales — with prices up 3% — and mortgage rates averaging 6.8%. Ken Baris, CEO of Berkshire Hathaway HomeServices, said homeowners who locked in very low mortgage rates years ago and delayed selling when the market went nuts will finally feel motivated to list their properties in 2024.
“I would take a huge bet, that you will see more transactions in 2024 than 2023,” he said. But again, he said a lot depends on interest rates.
“When interest rates go below 5% — if they do — you’ll see a blizzard of listings hit the market like we haven’t seen in an incredibly long time,” Baris said. “And I’ve told every realtor in our company and all of our offices, if rates go below 5%, cancel your vacation because it’s all hands on deck. We’re gonna be listing and selling an incredible amount of real estate.”
Realtors advised that South Jersey’s housing market around Philadelphia is more fluid because there’s more space to build. But they suspect bidding wars will continue. So, what should anxious home buyers do? Market analyst Jeff Otteau recommended home buyers start looking in February.
“Identify the house that you would like to purchase,” he explained. “Make your mortgage application and hold off on locking in on the interest rate until perhaps March or April or May — depending upon when your closing will be — and get the benefit of any sort of reductions in interest rates over that period.”
