The number of homes on the market in New Jersey is at a historic low.
And the low inventory is one of the biggest factors fueling the residential real estate market.
“Low inventory creates buyer frenzy, and then paired with historically low interest rates,” said Robert White, of Coldwell Banker Spring Lake and president-elect of New Jersey Realtors. “Low interest rates bring more buyers into the picture. They’re all rushing to take advantage of the low interest rates but they’re having trouble finding a place because of demand and houses are listed at one price and then sell for $20,000, $30,000, $50,000 or even $100,000 over asking. So they’re being shut out. And it all comes back to the low inventory.”
Housing inventory has been trending down for the past decade. In July 2011, there were 71,194 unsold homes on the market in New Jersey, according to data from the Otteau Group. By July 2016 there were 51,010 and by July 2021 there were 20,729 unsold homes on the market.
The primary reason that inventory has been low is because new home construction has been depressed for more than a decade, said Jeffrey Otteau, a real estate economist and president of the Otteau Group, a real estate valuation and consultant company.
In the 1980s, there were about 50,000 new homes being built per year in New Jersey. In the 1990s, that dropped to 35,000 and over the past decade, there have been less than 10,000 new homes constructed in New Jersey.
Fewer homes are being built because many parts of the state are running out of land, Otteau said.
“Where there is buildable land, towns have reduced density by increasing minimum lot size,” he said, causing fewer homes to be built and the price of new homes to rise.
And the reason new home construction affects inventory is that these higher-priced, new construction homes are typically being purchased by existing homeowners who are moving up to a larger home, Otteau said.
“For every new house built, it creates an existing home being offered for sale on the market,” he said. “With 40,000 fewer houses being built, that’s 40,000 fewer trading up opportunities. It’s just a function of fewer homes being built.”
NJ Advance Media looked at housing inventory data from Redfin, which identifies the places as census-designated areas, not towns. We took places that had a minimum of 50 houses listed for sale and compared the numbers for June 2016 and June 2021 to get the percentage of decline in inventory.
Camden County, with nine places on the list, and Ocean County, with eight, were the counties with the biggest declines in housing inventory. Cape May and Monmouth County both had two places on the list. And Gloucester, Middlesex, Burlington and Salem counties each had one.
25. Lavallette – 78.3%
24. Pine Lake Park (within Manchester Township)- 78.8%
23. Carney’s Point – 79.3%
22. Bellmawr – 79.3%
21. Palmyra – 79.3%
20. North Beach Haven – 79.4%
19. Villas (within Lower Township) -79.5%
18. Haddonfield – 79.6%
17. Stone Harbor – 80.2%
16. Jamesburg – 80.3%
15. Pennsauken – 81.2%
14. Oceanport – 81.3%
13. Waretown (within Ocean Township)- 81.5%
12. Paulsboro – 81.7%
11. Berlin – 82.3%
10. Dover Beaches North (within Toms River)- 82.5%
9. Little Silver – 82.5%
8. Audubon – 82.6%
7. Leisure Village East (within Lakewood) – 82.7%
6. Mount Ephraim – 82.8%
5. Somerdale – 82.9%
4. Beach Haven – 83.8%
3. Beachwood – 84%
2. North Wildwood – 88.1%
1. Barrington – 96.8%
Here are 20 N.J. places where the most houses went on the market this year
The 25 places in N.J. where homes are selling the fastest
The 25 N.J. towns where housing prices increased the most
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