September 3rd 2021

There are many headlines out there that claim we’re reverting to a more normal real estate market. That would indicate the housing market is returning to the pre-pandemic numbers we saw from 2015-2019. But that’s not happening. The Shore market is still extremely vibrant as demand is still strong even while housing supply is slowly returning.

Here are five housing industry metrics that prove we’re nowhere near normal.

1. Mortgage Rates

Buyers are eager to lock in today's rates, and there's good reason why.  If we look at the 30-year mortgage rate chronicled by Freddie Mac, we can see the average rates by decade:

• 1970s: 8.86%
• 1980s: 12.7%
• 1990s: 8.12%
• 2000s: 6.29%
• 2010s: 4.09%

Today, the average mortgage rate stands at 2.84%, which is very close to the historic low.  These near-historic low rates are creating enormous demand for Shore homes, as most believe rates will climb over 3% in 2022.  The difference can be tens of thousands of dollars over the life of the loan.  Buyers are eager to get in now and enjoy their own price appreciation down the line.  Even with the increase in prices recently, the savings from today's low rates make now an excellent time to purchase at the Shore.

2. Home Price Appreciation

Meanwhile, sellers at the Shore are enjoying record appreciation.  According to Black Knight, a housing data and analytics company, the average annual appreciation on residential real estate prices since 1995 has been 4.14%.

According to the latest forecast from the National Association of Realtors (NAR), home price appreciation will hit 14.1% this year, which will be greater than any year since Black Knight began collecting this data.

3. Months’ Supply of Inventory (Homes for Sale)

According to NAR:

“Months’ supply refers to the number of months it would take for the current inventory of homes on the market to sell given the current sales pace. Historically, six months of supply is associated with moderate price appreciation, and a lower level of months’ supply tends to push prices up more rapidly.”

The current months’ supply of inventory in Cape May County stands at 3.4, according to the latest availble sales data from New Jersey Association of Realtors. That’s almost half of a normal supply.

4. Days It Takes To Sell a Home

The days-on-market metric gives an indication of how hot a market is and how quickly homes are selling. In 2019, prior to the pandemic, the average days on market for Cape May County listings was 90 days, according to NJAR. Today, that number is cut by nearly two-thirds, at 34 days.

5. Number of Offers per Listing

According to NAR, the number of offers per listing stood at 2.2 in 2019. Today, that number is double at 4.5.  The Shore is seeing more bidding wars, cash offers, as-is purchases than any time in recent history.  Low interest rates and low inventory are here to stay, at least for now, so don't expect any significant changes anytime soon, although some softening is likely in the fall and winter when buyers are less able to come down for showings, as is typical for the Shore market each year.  

Bottom Line

When…

1. Mortgage rates are near historic lows
2. Price appreciation is at historic highs
3. Housing inventory is almost half of the normal amount
4. The time it takes to sell a home is cut by almost 2/3, and
5. There are twice as many offers on each house

…it’s hard to say we’re in a normal market.

Whether you want to buy or sell, now is a great time.  Take advantage of low interest rates, or take advantage of the historic demand for Shore homes!  

Call 609-780-1434 today for showings or your in-person home valuation.  Don't miss out on this historic market!