Welcome to my Hunterdon County Market Report—a monthly publication where I draw on my local expertise to unpack the latest developments in our real estate market. Rather than focusing on state or national trends, this report zeroes in on Hunterdon County and its surrounding areas. Each edition explores the economic forces and market dynamics influencing local property values. More than just numbers, it delivers hyper-local insights you won’t find elsewhere. By the end, you’ll understand both the what and the why behind recent market shifts—empowering you to make confident, informed real estate decisions throughout 2026.

You can also find a version of the report covering Somerset County here.

“What’s Happening in Hunterdon County’s Real Estate Market?

70  Under Contract Listings      $548K Average List Price       51 Average Days on Market

“Will we see a five % interest rate in 2026?”

Inventory is up about 15% in Hunterson County since the first of last year. Our state has an overall supply of 2.9 months, while Somerset County has 1.5 months and Hunterdon has 2.4 months. We are holding our own. And the recent NYC elections could help here, but it is too early to tell.

The Fed cut interest rates by 0.25% in September, as anticipated. A second rate cut also occurred in October by the same 0.25%. And, a third rate in December by the same amount. Yet interest rates have held at around 6.2%. We are not going to see this rate decline until the 10-year bond dips below 4% as they are being propped up by lingering inflation and unemployment worries.

The last employment report was for November, which showed the creation of 46K new jobs.  And there are many rumors of workforce reductions due to AI automation (which could persist and stretch out over the coming months as employees receive severance packages). Also, the inflation rate is holding at around 2.5%. As I said, lots of conflicting factors.

In a broader context, the real estate market shows signs of returning to a more typical state. This usually starts at higher price points, then moves down, and proceeds from east to west. More inventory results in more competition. This leads to longer time on the market, fewer offers that exceed the asking price, and bids that include contingencies such as mortgage approval, home sale, and inspection. The inventory of newly listed properties has remained steady compared to previous months, contributing to overall stability in total inventory. However, strong demand continues to outpace supply (especially in our lower price points), leading to rising prices in our region. Already in higher price brackets, price pressure exists as those market segments move toward a balanced or even buyer-oriented market.

For those considering buying or selling, the answer lies within this analysis. The market strongly favors sellers due to the fast-moving inventory, which helps maintain price stability in our locality. However, there is a gradual shift toward a buyer’s market at higher price points. Over the past years, prices have experienced significant increases—nearly 12% in 2020, 18% in 2021, 9% in 2022, 11% in 2023, and 7% in 2024. While a more modest 5% growth was anticipated for 2025, homes priced at $800K and above are seeing increased inventory, which is impacting their supply-and-demand dynamics.

Conversely, prices below this threshold continue to rise, although the rate of increase has decelerated. Increases will likely be more moderate in future years but still show positive growth. The fifty-year average price increase remains below 5 percent.

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Market Statistics for Hunterdon County:

• Last month, the market saw a 70% decrease in new inventory, with 35 new listings, down from 120 the previous month (seasonal). This was higher than 40 new listings in the same month in 2024.
• As of the beginning of this month, the available inventory has decreased to 169 units, down from 235 units last month (seasonal). This is higher than the 148 units available in the same month of the previous year.  A lot of this new inventory is in our higher price points.
• The number of units that went “under contract” last month was 70, lower than 126 the previous month (seasonal) but down from 80 in the same month last year.
• Over the past month, the average number of days on the market has risen to 51.
• All of these first three points are primarily seasonal in nature (December being a holiday month).
• Currently, the month’s supply of inventory is just under 2.4, indicating we are still in a strong seller’s market. This trend holds for properties priced under $700K
• The current month’s supply still indicates a strong seller’s market, with prices rising.

Given current market conditions, where supply and demand favor sellers, postponing your sale until later in 2026 may not be the best option. The market is likely nearing (or at) its peak, and it’s unlikely that prices will remain elevated for much longer. Therefore, it would be wise to capitalize on the current situation and list your property for sale now.

In summary, acting promptly in the current market could benefit sellers.

New Jersey Residential Real Estate Market Forecast

The fall of 2025 saw solid activity in both listings and sales.

Although inventory levels have increased, new listings continue to sell quickly, leading to strong sales and favorable prices for sellers. However, the biggest challenge in 2026 remains finding a more suitable home and securing an affordable mortgage.

For buyers, recent declines in interest rates (and speculation that they could drop further) have brought renewed optimism compared to a few months ago. This has also affected trade-up buyers similarly.

However, interest rates have still priced many first-time buyers out of the market and made most trade-up buyers hesitant to move. The recent fluctuations in rates provide limited hope in this area. Nevertheless, now is still a good time to buy a home, as stabilized market conditions and reduced competition create favorable terms. Additionally, refinancing remains an option if rates continue to fall.

Hunterdon County Real Estate Market Inventory Breakdown By Price For Last Month:

• 41% of sales in houses > $500,000
• 46% of sales in the $500,000 to the $1,00,000 range
• 13% of total sales (or 26 in total) in houses >$800,000

Hunterdon County Real Estate Market Inventory Breakdown By Municipality For Last Month

Six areas had no sales last month:

• Alexandria
• Bloomsbury
• Califon
• Clinton Town
• Hampton
• Kinwood

Twelve areas had 1 or 2 sales each last month:

• Bethlehem Two.
• Delaware Twp.
• E. Amwell
• Flemington
• Glen Gardner
• High Bridge
• Lebanon Boro.
• Lebanon Twp.
• Milford
• Stockton
• Tewksbury
• W Amwell

Hotspots:

• Clinton/Clinton  Twp. – 8 Sales
• Raritan – 13 Sales
• Readington – 8 Sales

Approximately 41% of sales were concentrated in the hotspot areas in the past month. Here’s a breakdown of the average prices:

• New Listings Entering the Market: The average list price was $632,309.
• Units Going Under Contract: The average list price for units that went under contract was  $548,175.
• This represents an 7.5% difference between the average prices of new listings and units under contract.”

In summary, understanding these price dynamics can provide valuable insights for buyers and sellers in the real estate market.

Note:

If you want to obtain a competitive price for your property based on its location and uniqueness, you can contact me at (908) 304-4660. By leveraging Coldwell Banker’s big data technology and Artificial Intelligence capabilities, you can gain a unique advantage in the market. I can demonstrate your area’s latest age and earnings breakdown, including where people are moving from and how to market directly to those specific areas and demographics. This approach will maximize the selling price while reducing the time on the market. Accurately priced and marketed homes tend to sell faster with the assistance of a seasoned real estate industry veteran and a local area expert.

“Why” is it happening…

New Jersey’s Economic Drivers:

New Jersey Home Sales and Inventory Levels:

Contrary to what you see on the news, the local Hunterdon and Somerset county markets remain strong.  While the network news is correct for some areas in the country (mainly those with heavy new development sales), my report focuses only on our two counties in NJ, which consist primarily of resales. Our only new construction is mainly from the high end of the market.

• YTD, sales across NJ declined .8% through December, while inventory has increased by 13%.
• Locally, we saw a seasonal decrease in sales in December in both Hunterdon and Somerset counties.
• There are early signs of a pullback in pricing at the higher price tiers, but the lower tiers are still experiencing price increases, albeit not as aggressively as in the past.
• First-time buyers are cooling off considerably due to higher prices (price resistance), inventory shortages, and rising interest rates. Their purchasing power has decreased for these reasons, and many have been priced out of the market for the time being. Our average age of first-time buyers is now 40.
• Potential sellers find it challenging to locate suitable housing in the current market and are hesitant to list until they do. They are also dismayed by the higher interest rates on their homes and, for the most part, are not willing to move unless they have an urgent issue, such as a life event or a job transfer.
• About 40% of all homes are owned outright. Of those with mortgages, nearly 50% of all homes have a mortgage of 4% or less, and 50% have a mortgage of 5% or less.
• The current month’s supply of inventory in Hunterdon County remains just under 2.4 months. In Somerset County, it is around 1.5 months due to the rapid sales of new listings (velocity) as the market remains active.
• Hunterdon and Somerset counties have a considerably higher inventory than they did a year ago. The unsold inventory in New Jersey has steadily decreased since reaching a peak of over 20,000, and it has now risen again to approximately 13,200.
• Inventory increased across all price points as of the end of December, with the under $400K price tier rising 17% and the $600K to $1,000 price tier growing by a lesser 6%.
• The new housing development has not kept pace with population growth and is now focused on the rental market.
• In summary, lower inflation will lead to lower rates and increased sales.

Interest Rates:

• Interest rates are now hovering around 6.2%.
• The Fed cut rates by .25% in September and again in October and December, which was already reflected in the current rates, as it was widely expected.
• A further cut is anticipated in 2026.
• Rates will go down as inflation subsides. They are based on the 10-year bond yield, which will rise as inflation and unemployment rise.
• Many buyers are considering attractive ARM rates and creative other buy-down plans as alternatives.
• Based on the current rates, first-time buyer mortgage applications have dropped, but restructuring debt and paying down high-interest items remain active.
• The Fed’s efforts to slow things down have resulted in the above.

National Job Front:

• The shutdown had affected our ability to get more current numbers.
• Total nonfarm payroll employment increased by 108,000 in September, decreased by 105,000 in October, and then rose by only 64,000 in November. Unemployment rose to 4.6 percent, the U.S. Bureau of Labor Statistics reported. Employment continued growing in government, health care, social assistance, and construction.
• At the same time, job gains for July and September were revised down by 55,000 and 17,000, respectively. This gets little exposure on the network news channels.
• And, there was an annual correction of -818,000 jobs being created vs. previous reports as well.
• A large share of the new jobs were part-time, indicating that people are finding “side hustles” to help offset inflation.
• It’s important to note that this number includes about 175K in natural job growth per month.
• The analysts also state that many new jobs were lost as small businesses failed, and those people reentered the labor force.
• The labor force participation rate held at 62.5 percent. This rate is calculated by dividing the total number of workers employed or actively seeking employment by the working-age population. It also fluctuates because people take a second job to make ends meet.
• Many people were resigning to pursue new career paths due to perceived health risks, the desire for more remote work, and a better work-life balance. New technology-based jobs are affecting this trend.
• For those under $50K, there is even some incentive not to work and collect benefits, contributing to the current unemployment rate.
• The lower end of the job market (which typically does not own houses) has benefited the most from this trend, with higher starting pay rates competing for a shortage of workers. Jobs starting in the mid- to upper $20 per hour are already being offered.

New Jersey Job Front:

• Our state has had negative job creation in 4 of the last 9 months; however, most recently,
  There is a positive note: YTD through August 2025, the state has now lost about 9,000 jobs, compared to adding 21,400 jobs in the same period in 2024. The state’s unemployment rate remains above the national level and increased 20 basis points month-on-month to 5.2%.
• Job losses remain prevalent across industries such as construction, food services, and accommodations. Retail and wholesale trade are also experiencing a downturn in some states. Even health care, social assistance, and manufacturing are shedding workers.
• It should be noted that the number of jobs in New Jersey lags the national figure by a month.

Rental Market Trends:

• Rental prices in New Jersey continued to increase in 2024, with a year-over-year average of just under 3%. They are currently averaging just over $2,400 per unit. However, recent data shows a slight decrease in these prices.
• The vacancy rate in central New Jersey is currently 6%, indicating a limited rental supply and driving up rents. It should be noted that the return of over 2 million illegal immigrants has greatly affected these figures.
• The rental market typically includes low-end buyers who rent due to a shortage of available housing. However, the recent constraints in the mortgage market have also contributed to the increase in this sector.

New Jersey Foreclosures:

• NJ’s delinquency rate (more than 90 days past due) has decreased, which is a positive development.
• NJ’s current foreclosure rate has risen considerably to 1.5%.
• Nationally, $11 trillion in equity is needed to protect homeowners during a potential recession.
• The average FICO score of mortgage holders is over 750, higher than during the 2008 financial crisis.
• A slowdown and recession could still cause job losses and put mortgages at risk.
• A housing bust is not expected, as home equity is significant thanks to recent appreciation.

Real Estate Market Recap

Forecast:

• The consumer price index, which rose by 2.7% Y-O-Y in November (the last month reported), continues to cause havoc with auto, finished goods, and energy pricing and is the enemy of long-term interest rates.
• Mortgage rates had pulled back nicely, and are now back to the 6.2% range.
• The local inventory accumulates primarily in the more expensive price ranges, and the housing affordability index has increased slightly (based on wages, rates, and home prices). As a result, mortgage payments now have an all-time high share of gross income (which slows spending in other sectors).
• Due to COVID-19 and recent unrest in NYC, interest in living in more suburban counties such as Hunterdon and Somerset has disappeared. In fact, many companies are now requiring more on-site presence, reversing the move westward. This may very well reverse again with the results of the past election.
• Retailing and the use of vacant industrial space will transform to meet new, altered demands and lifestyles.
• The local market will have to adapt to the new suburban renaissance, taking into account where people will work and what they need to accommodate.
• The lingering question has been, “Can we keep this momentum up with low to moderately rising inventory?” as predictions for slower sales and price increases in 2026 have already been made.  In 2025, we saw more normalized increases (based on your price points) of 5% or more (which is what we also said last year).
• Days on the market in our area have risen (seasonally). Still, they are growing, indicating that buyers are becoming less active seasonally and that they have more inventory to choose from.
• However, change will result in a trend towards a more normalized environment if inventory continues to come onto the market and the first-time buyer fatigue that we have seen continues.
• Younger (millennial) buyers are coming of age in the pipeline for the next 4 to 5 years, which will continue to put more demand on the first-time buyer market, usually under $400K.
• Housing markets are adding much of the new inventory at higher price points, which is normalizing those results. Change usually happens from the top down and from east to west.
• In a nutshell, 2025 looked a lot like 2024, with more inventory and slightly better rates.
• More inventory means more options for buyers and a longer time on the market for sellers. Also, this is leading to fewer competitive offers.
• The Fed recently indicated it is close to ending its balance sheet runoff (quantitative tightening) and will become a net buyer of short-term Treasury bills starting in 2026 to offset maturing mortgage-backed securities. This move is aimed at addressing stress in overnight funding markets and can be considered a form of easing, which could also indirectly affect longer-term yields. This, in turn, will hopefully lower interest rates.

This is substantial information, and the situation is evolving daily. Nevertheless, it appears to be moving in a positive direction for now. If you require further clarification or have any concerns about how this could impact your circumstances, please don’t hesitate to contact me at (908) 304-4660. I’m always available to chat and help you gain a better understanding.

Note: This information is presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. Although reasonable care has been taken to provide this information, it is advised that you seek guidance from a professional sales agent and avoid making any decisions solely based on my views, trends, and statistics. I am not responsible for any consequences arising from the use of this data.

If you have any questions or would like to talk out your situation, please call 908-304-4660

You can ask me a question or request a monthly newsletter copy here.