Today’s Biggest Housing Market Myths in New Jersey

Have you ever heard the phrase: don’t believe everything you hear? That’s especially true if you’re thinking about buying or selling a home in today’s New Jersey housing market. There’s a lot of misinformation out there, and in a state with diverse markets from Hoboken to Atlantic City, making sure you have someone you can go to for trustworthy information is extra important.

If you partner with a local real estate agent, they can clear up some common misconceptions and reassure you by backing them up with research-driven facts. Here are just a few misconceptions they can help disprove.

1. I’ll Get a Better Deal Once Prices Crash

If you’ve heard home prices in New Jersey are going to come crashing down, it’s time to look at what’s happening. While prices vary by local market—Manhattan is close to the NJ border versus rural areas like Sussex County—there’s a lot of data from sources like the New Jersey Realtors Association that shows a crash is not imminent.

Back in 2008, there was a dramatic oversupply of homes that led to prices crashing. Today, in New Jersey, there's an undersupply of homes for sale, especially in high-demand areas like Bergen and Middlesex counties. This makes the current market a whole different scenario:

• Jersey City: As of mid-2023, average home prices had risen by 8% year-over-year, reflecting steady demand and limited inventory.
• Newark: Despite economic fluctuations, home prices have remained resilient with a modest annual increase of around 5%.
• Suburban Areas: In communities like Cherry Hill and Edison, the demand continues to outpace supply, preventing a price crash.

So, if you think waiting will score you a deal, know that data shows there’s not a crash on the horizon in New Jersey, and waiting isn’t going to pay off the way you’d hoped.

2. I Won’t Be Able To Find Anything To Buy

If this nagging fear about finding the right home if you move is still holding you back, you probably haven’t talked with an expert real estate agent lately. Throughout the year, the supply of homes for sale in New Jersey has grown. Data from Realtor.com specific to NJ shows:

• Inventory Increase: As of 2023, inventory in New Jersey increased by 10% compared to the previous year, especially in suburban areas like Toms River and Cherry Hill.
• Emerging Markets: While there are still fewer homes on the market than in a more normal year like 2019, inventory is moving in a healthier direction, particularly in revitalizing areas like Camden and Trenton.

So, if you’re remembering all that media coverage about record-low supply during the pandemic, you can rest a bit easier. While the market isn’t back to normal just yet, inventory is moving in a healthier direction. This means as your options improve, you can let go of this now-outdated myth because finding a home to buy in New Jersey won’t feel quite so impossible anymore.

3. I Have To Wait Until I Have Enough for a 20% Down Payment

Many people in New Jersey still believe you need a 20% down payment to buy a home. To show just how widespread this myth is, Fannie Mae says:

“Approximately 90% of consumers overstate or don’t know the minimum required down payment for a typical mortgage.”

And if you look at the data from the National Association of Realtors (NAR), you can see the typical homeowner in New Jersey isn’t putting down as much as you might expect:

• First-Time Homebuyers: In New Jersey, first-time homebuyers are typically only putting down 6%, which is far less than the 20% many people think they need.
• Loan Options: Data from the NJ Mortgage Bankers Association shows that 65% of first-time buyers in NJ used FHA loans requiring as little as 3.5% down. Conventional loans in New Jersey now offer options as low as 5% down for qualified buyers.
• Repeat Buyers: While repeat buyers might have more equity built up, allowing them to put down closer to 20%, this is not a requirement for all buyers.

This goes to show you don’t have to put 20% down unless it’s specified by your loan type or lender. Many people put down a lot less. Not to mention, depending on the type of home loan you get, you may only need to put 3.5% or even 0% down. So, if you’re buying your first home in New Jersey, you likely don’t need nearly as much for your down payment as you may think.

An Agent’s Role in Fighting Misconceptions

If you put your move on pause because you heard one or more of these myths yourself, it’s time to talk to a trusted New Jersey real estate agent. An expert agent has more data and the facts, just like this, to reassure you and help break through any misconceptions that may be holding you back.

Bottom Line

If you have questions about what you’re hearing or reading, let’s connect. You deserve to have someone you can trust to get the facts about the New Jersey housing market.

FREE consultation here!

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