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  • Camille Haynes

New Jersey Bidding Wars Abound… How Long Will They Continue?

In a strong seller’s market, like the one we have experienced in Essex & Union County over the past year, bidding wars are common and expected. This makes sense! A seller’s market is defined as a market in which the inventory of homes for sale cannot satisfy the number of buyers who want to purchase a home.

Just like with any product or service, the law of supply and demand impacts home prices. Any time that there is less supply than the market demands, prices increase. In New Jersey, the supply of homes for sale in the starter and trade-up home markets is so low that bidding wars have ensued, and the delayed spring-buying season, due to the pandemic, is here. Traditionally, spring is the busiest season for real estate. Buyers come out in force and homeowners list their houses for sale hoping to capitalize on buyer activity. This year is different due to the significant impact of Covid-19 in New Jersey. But since the effects of the pandemic are currently at a low, as well as historic low-interest rates, prospective buyers are out in full force and prepared to move as aggressively as possible if the right opportunity arises.

In some areas of the country including the Northern New Jersey area, first-time buyers have been met with fierce competition throughout their experience. Some have been out-bid multiple times before finally winning a bid on a home to call their own.

Buyers have already been out in force looking for their dream homes and more are on their way, but the challenge is that the inventory of homes for sale has not kept up with demand, which has lead to A LOT of competition for the homes that are available.

According to the latest housing statistics from the New Jersey Association of Realtors (NJAR), there is currently a 3.1-month supply of homes for sale in Essex County and 2.8-month supply in Union County. With the current number of houses listed for sale and the level of demand from buyers, this means it would take 3.1 months for all the Essex County homes listed to sell if no additional listings came to market and 2.8 months in Union County. Any supply number under a 6-month supply is considered a seller’s market.

Without a large wave of new listings coming to the market, buyers will continue competing with each other for the homes that are available. If you are thinking of selling your home, now may be the time to do so before more competition comes this spring. Let’s get together to determine the demand for your house in our area.

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