Real Estate Forecast Next 5 Years in New Jersey

The New Jersey housing market is characterized by robust demand, driven in part by buyers seeking quality education, employment opportunities, and lifestyle amenities. Millennials, entering their prime home-buying age, are transitioning from renting to buying, driven by a desire for more space and stability amid the pandemic.

Retirees, in search of low-maintenance and affordable living options, are increasingly drawn to New Jersey's adult communities The New Jersey real estate market is poised for continued strength over the next five years, albeit with some moderation in price appreciation. Several key factors contribute to this forecast:

Factors Driving Growth

• Continued job growth: New Jersey boasts thriving industries such as finance, pharmaceuticals, and technology, all anticipated to experience sustained growth, driving increased demand for housing.
• Strong demographics: With a burgeoning population of millennials and Gen Zers entering their prime homebuying age, the demand for housing, especially rental properties, is expected to remain robust.
• Limited supply: The scarcity of available land in New Jersey presents a challenge for new home construction, contributing to the maintenance of elevated property prices.

Potential Moderators of Growth

Despite the positive outlook, certain factors may temper the pace of price growth in the New Jersey real estate market:

• Rising interest rates: The Federal Reserve's efforts to combat inflation through interest rate hikes may increase the cost of borrowing, potentially impacting affordability for some prospective homebuyers.
• Economic uncertainty: Global challenges, such as the conflict in Ukraine and the lingering effects of the pandemic, introduce economic uncertainties that could make individuals more cautious about entering the housing market.

Probable Forecast for the Next Five Years

Here's a breakdown of the projected home price growth in New Jersey from 2024 to 2028:

• 2024: Home prices are expected to rise by 3-5%.
• 2025: Anticipated 2-4% increase in home prices.
• 2026: Home prices are forecasted to rise by 1-3%.
• 2027: Expecting a 1-2% increase in home prices.
• 2028: Home prices are projected to rise by 1-2%.

The New Jersey housing market is poised to remain strong and resilient over the next five years, notwithstanding challenges and uncertainties. It's crucial to note that these figures are forecasts, and actual results may vary. Potential buyers and sellers are advised to carefully assess these factors before making any real estate decisions.

New Jersey Real Estate Market Forecast

The New Jersey real estate market in 2024 is expected to be a story of moderation, following a period of white-hot competition and significant price increases in recent years. Here's a closer look at the key trends shaping the market:

Inventory Levels:

• Low Inventory Persists: One of the defining features of the New Jersey market for some time now has been the lack of available homes. While there may be some slight improvements compared to 2023, inventory is still expected to remain tight. This means sellers will likely continue to hold some leverage in negotiations.

Price Trends:

• Continued Growth, But at a Slower Pace: Experts predict that home prices in New Jersey will continue to rise in 2024, but at a slower rate than what we've seen in the past. This is due to a combination of factors, including rising interest rates and a more balanced market with increased buyer options.

Regional Variations:

The forecast for price appreciation can vary depending on the specific location within New Jersey. Here's a detailed breakdown for the regions:

• Trenton, NJ: According to Zillow, the Trenton MSA is anticipated to see a modest increase of 0.6% between May 2024 and April 2025. This suggests a stable market with potential for continued growth, but at a slower pace. Investors may find opportunities in Trenton due to its proximity to major transportation hubs and ongoing revitalization efforts.
• Atlantic City, NJ: Atlantic City is expected to experience the most significant growth among the regions listed, with a projected increase of 2.6% by April 2025. This could be due to several factors, including its status as a resort town and potential for continued development in the tourism and entertainment sectors.
• Vineland, NJ: Vineland is forecast to see a moderate increase of 1.7% between May 2024 and April 2025. This suggests a steady market with potential for first-time homebuyers and those seeking more affordable options compared to other parts of New Jersey.
• Ocean City, NJ: Ocean City's housing market is predicted to experience a growth of 1.8% by April 2025. Similar to Atlantic City, its status as a popular shore town likely contributes to this projection. However, the increase is expected to be more moderate compared to Atlantic City, potentially due to the already higher price points in Ocean City.

Buyer Activity:

• Return of More Balanced Market: With rising interest rates, some buyers who were priced out of the market in 2023 may find themselves with more opportunities in 2024. This could lead to a more balanced market with increased competition but less of the frenzy seen in previous years.
• Impact of Interest Rates: Mortgage interest rates are a significant factor influencing affordability. While rates are expected to stabilize in the second half of 2024, they will likely remain higher than the historic lows of recent years. This will undoubtedly impact buyer purchasing power.

Market Outlook:

• Gradual Shift: The New Jersey real estate market appears to be transitioning from a seller's market to a more balanced market. This is likely to be a gradual shift, and sellers may still enjoy some advantages. However, buyers will also have more opportunities to negotiate and find homes that fit their budget.

Local Market Insights:

• Importance of Local Expertise: The data suggests that there will be variations in price growth across different regions in New Jersey. To get the most accurate forecast for a specific area, it's crucial to consult a realtor with expertise in that local market. They can provide insights into specific neighborhoods, property types, and market trends that can significantly impact your buying or selling decisions.

Overall, the New Jersey real estate market in 2024 is expected to be one of moderation. While inventory is likely to remain tight, price growth is predicted to slow down. Rising interest rates will be a factor for buyers to consider, but a more balanced market may emerge with increased opportunities for both buyers and sellers.