With strong buyer demand but low inventory, first-time homebuyers could be getting priced out of starter homes as the median sales price continues to rise across the state, according to New Jersey Realtors, the largest trade association in the state.

The median sales price for single-family homes throughout the state rose 4.6 percent to $285,000 in Q1, compared to the same period last year. In the townhouse-condo market, the median sales price rose 3.4 percent to $244,900, and the price for a home in an adult community increased 12.1 percent to $185,000.  Competition is strong among buyers as the inventory of homes for sale continues to drop. The number of homes for sale was down 17.6 percent for single-family homes, 17.2 percent for townhouse-condos, and 13.6 percent for adult communities, when compared to March 2017.

The number of new listings has also continued to decline, which has slowed down the number of closed sales. When comparing Q1 to this time last year, new listings for single-family homes are down 6 percent, with townhouse-condos down by 3.6 percent, and adult communities also decreased 4.8 percent.

“For sellers, strong competition is a good problem to have, particularly in this low inventory market we’re experiencing,” said NJ Realtors President Christian Schlueter. “But while it’s great for sellers, we must be cautious the rise in prices will not push out first-time homebuyers.”

Borrowing money will also be a hurdle for some buyers as we enter the second quarter of the year. The Federal Reserve already raised its short-term interest rate by .25 percent, citing concerns about inflation, and will likely implement two more increases in 2018. This will make it more difficult to be approved for home equity loans, credit cards, and adjustable mortgages.

This time last year, homes were spending an average of 85 days on the market, where in the first quarter of 2018, homes are spending just 74 days on the market, a 12.9 percent drop.

For the full reports, visit njrealtor.com/data.

New Jersey Realtors is the voice of real estate for New Jersey. It is a non-profit organization serving the professional needs of nearly 50,000 Realtor and Realtor-Associate members engaged in all facets of the real estate business. In addition to serving the professional needs of its members, NJ Realtors is dedicated to enhancing the ability of its members to conduct their business successfully while maintaining the preservation of private property rights. Realtor is a registered collective membership mark, which may be used only by real estate professionals who subscribe to the Realtor organization’s strict Code of Ethics and are members of the national, state and local Realtor organizations. For more information, visit njrealtor.com.

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This is sponsored content from NJ Realtors.