All around the nation, mortgage rates have been rising for the first time since the start of the pandemic. Home prices have begun to stabilize after their breakneck climb.
Here in our local markets, Staten Island and The Jersey Shore, we do see some similarities between the two. But there are pronounced differences between buying and selling in these two areas.
Breakdown: Staten Island and New Jersey Real Estate, March 2022
Staten Island is the more stable market of these two. The Jersey Shore market is more volatile. Staten Island home prices remained about the same in February as they did in January. The average Staten Island home sold for $710,776 last month.
In Monmouth and Ocean Counties, prices came down quite a bit. The average home sold for $539,329 in January, before falling to $501,697 in February. Jersey Shore home prices fell by 7% in just one month.
Sales were down in both markets. In Staten Island, sales fell 17% over the previous month to just 373. In the Jersey Shore market, monthly sales fell by 20% to 1,303 for both counties combined. These declines are even more pronounced when we consider the season- usually home sales pick up in spring.
New listings were up to 482 in Staten Island over last year’s 387. Over in New Jersey, new listings were down slightly but relatively unchanged from last year. With sales down and new listings creeping up, the total active listings in both markets remained about the same month-over-month.
Another measure of market health is the days on the market. Homes in New Jersey close much faster than they do in New York, yet it was Staten Island who came out with the fastest increase. Homes are selling about 28% faster than they were one year ago in Staten Island at 76 days. Jersey Shore homes closed in just 33 days, or 18% down from 40 one year ago. So the demand in both markets is clearly still strong.
But the SP/LP ratio has been slowly coming down from its peak last summer. In New Jersey, homes are still selling for over 100% of ask price at 101.6. Yet back in June, the ratio peaked at 103.2. In Staten Island, homes were fetching 98.5% of their list price in August. Now, this figure is down to 97.8. When homes are selling for over $700,000, these are noticeable savings.
Mortgage Rates Surge Nationally
The feds began raising interest rates in the early part of 2022. Mortgage rates followed suit, rising more than a full percentage point in a short time. The 30-year fixed rate is now up to 4.72%. Rates are actually surging past the expectations of many economists. Soon the 30-year fixed rate will likely reach 5%.
This makes borrowing more expensive for home buyers. Mortgage rates have now doubled since their pandemic-lows. Expect sales to continue slowing down as home affordability becomes a larger issue. But don’t expect a sharp drop in prices. New construction is still lagging behind the housing demand.