What Sellers Should Watch in the NJ Fall Housing Market: 5 Signals for Central Jersey

Central Jersey Home Selling · Fall Market Watch

By Jasmine Tsui (201-920-5825) | NJ Realtors® Circle of Excellence Award Winner | Weichert, Realtors. · Updated October 12

The Central Jersey fall housing market that sellers planned for in August is not the one they are listing into now. When this article first went up in late September, the average 30-year fixed mortgage rate had spent the summer in the mid-6% range. On October 8, Freddie Mac’s weekly survey put it at 7.40%, up from 6.66% at the end of August and from a 5.98% low in February. I have rewritten this guide around the numbers as they stand today.

Central Jersey Fall Housing Market: What Changed Since Labor Day

Three things moved in about six weeks: mortgage rates crossed 7%, the Federal Reserve raised its benchmark rate, and the national share of listings with a price cut hit a record for September. Local supply is still tight by historical standards, which is why our area has held up better than most of the country.

Fall Seller Scorecard: The Numbers Central Jersey Sellers Should Track

Sources: Freddie Mac Primary Mortgage Market Survey; Federal Reserve; Realtor.com September Monthly Housing Trends Report; Redfin; Middlesex County figures from my August county update. Data as of October 12. National and metro numbers do not describe any single town or property, and all of these figures change, so confirm current data before you make a decision.

The 5 Signals to Watch in the Central Jersey Fall Housing Market

1. Mortgage Rates Above 7% Are Shrinking Buyer Budgets

Rates are the biggest change since this article was first published. Freddie Mac’s average went from 7.03% on September 24, the first reading above 7% since early last year, to 7.28% on October 1 and 7.40% on October 8. A year ago at this time it was 6.30%.

Here is what that does to the person writing you an offer. On a $560,000 loan, which is a $700,000 purchase with 20% down, principal and interest runs about $3,877 a month at 7.40%. At late August’s 6.66% it was about $3,599. A buyer who wants to keep the August payment can now borrow about $520,000, roughly 7% less. That is illustration, not a quote; property taxes and insurance sit on top, and each buyer’s rate depends on credit, down payment, and lender.

The Federal Reserve raised its benchmark rate by a quarter point in September, its first increase in more than three years, and its next decision comes at the end of October. Mortgage rates follow the bond market more than the Fed itself, and no one can time either. I would not build a listing plan on rates falling before the holidays. If you want the buyer’s side of this math, I worked through it in my article on 7% mortgage rates.

2. More Listings Mean More Competition for Your Home

Buyers have more to choose from than they did a year ago. Realtor.com’s September report shows active listings up 5.4% nationally, and the Northeast posted the largest regional increase at 11.6%. At the same time, homes under contract fell 4.1% from a year earlier. Realtor.com’s economists point out that supply is growing mainly because demand cooled, not because a wave of new sellers arrived.

Locally the picture is tighter. In my August Middlesex County market update, the county had about 2.3 months of supply, up from about 1.8 a year earlier, with new listings running ahead of closed sales. That is still a low number. The split I see is between homes that are ready to move into and homes that are dated or overpriced. Single-family homes near the Metuchen train station and in North Edison’s J.P. Stevens zone are still drawing quick interest, while tired listings in the same towns wait.

Before we choose a price, I pull every active listing in your price band and school zone. Those homes, not the sale your neighbor closed last spring, are what your buyer will tour on the same Saturday.

3. Price Cuts Are at a Record for This Time of Year

Nationally, about one in five listings has taken a reduction. Realtor.com reports that 20.8% of active listings had a price cut in September, the highest September share in its records. Redfin’s count for the four weeks ending September 20 was 21.1%.

Our region is an exception, and that cuts both ways. Redfin put the Newark, NJ metro at 12.2%, the second-lowest share among large metros, and counted it among only five seller’s markets left. A Newark-metro figure is not an Edison or East Brunswick figure. Still, the lesson holds: when most nearby sellers are not reducing, the home that does reduce gets noticed, and buyers start asking what is wrong with it.

The first two weeks on the market are when a listing gets its most serious attention. Spend them at the wrong price and the correction arrives in the slowest weeks of the year. I laid out the full pricing method in How to Price Your Home in Central Jersey.

4. Seller Credits Are Becoming Part of the Deal

Redfin found that sellers gave concessions in 44.7% of U.S. home sales in August, up from 42.6% a year earlier and the highest August share in its records. With rates above 7%, many buyers would take help with closing costs or a temporary rate buydown over the same dollars off the price, because a credit lowers what they pay in the first year far more than a small price cut does.

Decide your credit budget before the sign goes up. If you know in advance that you would give up to a set amount toward closing costs or a buydown, we can answer an offer the same day instead of losing a weekend. Loan programs cap how much a seller can contribute, so the buyer’s loan officer has to confirm what is allowed. The Consumer Financial Protection Bureau explains how these costs appear on a Loan Estimate.

5. The Calendar: Holidays and the November 2 Appraisal Change

Two dates matter. The first is Thanksgiving. If a home listed in mid-October takes the county’s August median of 42 days to go under contract, it gets there around Thanksgiving week, and showing activity thins out from then until January. A listing that is priced and presented correctly on day one has the best chance of finishing before that slowdown.

The second is November 2. That is the date Fannie Mae lists as the mandatory start for the UAD 3.6 appraisal format, which captures more details about a property as structured data. If your closing lands in late October or November, have your permit records and dated invoices for the roof, HVAC, and major renovations ready before the appraiser comes. I covered the preparation steps in my guide to the new appraisal rules.

Listing on Summer Assumptions vs. Listing for the Fall Buyer

Same House, Two Listing Plans: Summer Assumptions vs. the Fall Buyer

This table reflects how I advise my own sellers. It is general guidance, not a promise of any result for a specific home.

Presentation belongs on this list too. When buyers have options, photos and first impressions decide which homes they bother to tour. That does not mean renovating. My guide on what not to fix before selling shows where preparation money is usually wasted.

Should You List Now or Wait Until Spring?

Neither answer is right for everyone. Here is how I sort it out with sellers.

• Listing this fall makes sense if you have a real reason to move, the home can be photo-ready within a couple of weeks, and you are comfortable pricing to recent closed sales. Fall buyers tend to be serious; people do not tour homes in November for fun.
• Waiting makes sense if the home needs work that cannot be finished before the holidays, you have no deadline, or the number you need only works at last spring’s prices.
• If you are also buying, remember that the same 7% rate applies to your next mortgage. Run both sides before you decide. My net proceeds calculator shows what you would walk away with at different sale prices.

The bottom line for the Central Jersey fall housing market: our towns remain one of the stronger places in the country to be a seller, but buyers are stretched by 7% rates and have more homes to compare. Price to the last 90 days, plan your credits, and get to the market before the holiday slowdown.

Central Jersey Fall Housing Market FAQ

Data sources and disclaimer: mortgage rate figures are national averages from Freddie Mac; policy rate information is from the Federal Reserve; listing, price-cut, and concession figures are from Realtor.com and Redfin; Middlesex County figures are from my August county update. All data is as of October 12 and changes frequently, so confirm current numbers before making a decision. National and metro statistics do not describe any individual town or property. Payment examples are illustrative principal-and-interest calculations only. This article is general educational information, not mortgage, financial, tax, or legal advice. I am a licensed real estate agent, not a loan officer or appraiser; please consult a licensed mortgage professional about financing questions. Jasmine Tsui, Weichert, Realtors, 123 Lincoln Hwy, Edison, NJ 08820, (201) 920-5825. NJ real estate license #2075070. Equal Housing Opportunity.