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The housing market in New Jersey saw a dynamic year in 2019. As temperatures dropped, inventory and offers increased. Thanks to the high demand for starter homes, those looking to buy in the luxury market will find themselves at an advantage. Less competition coupled with notable increase in luxury homes spending can make upgrading your current home more attainable than ever.
The Cost of Homes Will Remain Steady
Existing homes have seen both a decline and rebound in sales in recent years. While the third quarter of 2019 saw declining mortgage rates, the pace for 2020 is projected to remain steady. The flattening of overall price growth projects a forecasted increase of 0.8% for 2020.
Mortgage Rates are Projected to Stay Below 4%
Until there is a sustained increase in inflation, Central Bank will not be hiking up their rates. Currently, it’s projected that mortgage rates should stay below 4% but won't decrease much beyond that.
Lower mortgage rates are proving to be a big factor in increased construction with builder confidence being reported at an all-time high since 1999.
Increased Demand for Entry-Level Homes Can Lead to an Increase in Existing Luxury Inventory
Those belonging to the Baby Boomer generation have played a major role in shaping the current housing market, as many of them are retiring and looking to downsize their current homes. While entry-level homes are in greater demand with a low level of inventory, many builders have shifted their focus to affordability rather than luxury.
This trend will lead to a decrease in new construction in the luxury market. However, those currently inhabiting luxury homes are looking to downsize into the mid-size market which leads to an increase in inventory for existing luxury homes. While the luxury market is projected to remain consistent throughout 2020, supply won’t necessarily be a non-issue. Some of those looking to retire are choosing to ‘age in place’ and stay in their existing homes.
More Buyer Opportunity Leads to More Activity
2020 is set to provide buyers the opportunity to negotiate on price because there are more choices. Buyers can expect to have greater purchasing power due to low interest rates. Those that are specifically upgrading from entry and mid-level homes are at an advantage. Inventory shortages on the lower end of the market drives up higher sale prices for their current homes making upgrading to luxury housing more attainable than ever.
If you’re considering entering the luxury market, 2020 is shaping up to be a great year to make the move.