My goal in this market report is to bring clarity to understanding our Somerset County real estate market through my local expertise.

My monthly market update walks you through the economic conditions and trends that influence our local markets as it offers hyper-local statistics that you will not be able to find elsewhere.

You will come away knowing not only “what” is happening in our Somerset County market specifically but, more importantly, “why” it is happening. As a result, you will keep informed to make home buying and selling decisions in 2023.

There is also a Hunterdon County version that can be found here.


“What’s” Happening in Somerset County’s Real Estate Market?

Interest rate hikes have risen slightly since last month based on inflation fears and more robust economic indicators. Still, home loan rates have improved since their peak in 2022, and inventory has moved down slightly across Hunterston and Somerset counties. Furthermore, sellers have become more realistic in pricing, and many are eager to make deals. As a result, there may be an excellent opportunity for would-be home buyers to re-enter the market.

We are seeing fewer offers above the asking price, facilitating the return of a more normalized market with bids containing terms such as a mortgage, home sale, and inspection contingencies.

Newly listed inventory trended lower from last month’s numbers, and our total inventory is also down. But demand still outpaces supply (at well under two months), resulting in prices in our area still holding their own until you get into the upper price points but no longer rising the way they were earlier this year.

Should I consider buying or selling based on this? You will find the answer here…

Fast-moving inventory is still presenting a strong seller’s market, keeping home prices stable in our area (just not rising as in the recent past). We saw a near rise in prices of 12% in 2020 and 18% in 2021, and 2022 came in at 8%. We don’t expect any significant rate of growth in early 2023. The new calendar year may pull back values in the higher-priced homes.


Market Statistics for Somerset County:

  • New Inventory: One hundred thirty-one new listings came on the market last month, up from 124 in the prior month and down from 209 for the same month in 2022.
  • Total Inventory: Our available inventory is two hundred seventy-seven units and had decreased from 309 this time last month and is down from 338 the same month in 2022.
  • Sales: Two hundred thirty-three units went “under contract” last month, up from 173 in the prior month and down from 287 in the same month in 2022.
  • Days on Market: The average days on the market have decreased from 42 to 33 days over the past month, showing a nice increase in buyer demand.
  • Month’s supply: We are still sitting with 1.2 months’ inventory supply, representing a strong seller’s market.

This represents an optimum supply and demand curve for our sellers. If you will be selling in 2023, waiting is not a good strategy.  The market is at its strongest now as we will most likely not see many further increases in pricing and probably pullback in the higher price points!


New Jersey Residential Real Estate Market Forecast

Because of the increased slowing move to the west (urban flight), pent-up demand, a pull back in mortgage rates, and sellers coming on the market as Covid fears seem to be diminishing, and we saw solid listings and sales thru the 2022 fall season. Just not as strong as in 2021 (which was not an average year).

As previously mentioned, the new listings are selling fast. So, even though we still have lower inventory levels, int the seller side, sales are strong. In 2023, their biggest uncertainty is finding another more suitable house and a mortgage at an affordable price.

On the buyer side, it is estimated that the buyer of a median-priced house will need to earn $30 to 35K more than just a year ago in order to qualify for a mortgage as their mortgage as a percentage of their income has risen. This has priced many first-time buyers out of the market. But, if possible, it is an optimum time to buy as terms have normalized due to lack of competition. You can always refinance as rates drop in the future.

We are actually seeing fewer open houses and attendees in 2022 due to fewer listings and the fast pace of sales.

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

February February Total
Somerset County New Under Active Months’
Listings Contract Listings Supply
Condos/Town Houses * 40 92 67 1
Over 55 Communities* 5 15 20 1
$000K to $199K 1 5 3 1
$200K to $299K 6 18 11 1
$300K to $399K 28 42 43 1
$400K to $499K 25 61 38 1
$500K to $599K 17 36 28 1
$600K to $699K 12 22 21 1
$700K to $799K 16 14 24 2
$800K to $899K 6 7 10 1
$900K to $999K 3 4 7 2
$1,000K and Up 17 24 92 4
Totals for February 131 233 277 1
Average Price $691,169 $598,858 -13.4%
Average Days on Market 33
* Included in $ breakdowns
  • 54% of sales in houses > $500,000
  • 36% of sales in the $500,000 to $1,000,00K range
  • 10% percent of total sales (or 41 in total) in houses >$1,000,000

Somerset County Real Estate Market Inventory Breakdown By Municipality For Last Month:

Active Listings Under Contract Month’s Supply
Bedminster Twp 11 5 2
Bernards Twp 31 20 2
Bernardsville 18 11 2
Bound Brook 1 6 0
Branchburg Twp 8 11 1
Bridgewater Twp 32 45 1
Far Hills Boro 4 2 2
Franklin Twp 36 44 1
Green Brook 7 3 2
Hillsborough 31 28 1
Manville Boro 7 9 1
Millstone Boro 1 0
Montgomery Twp 10 11 1
North Plainfield 11 6 2
Peapack Gladstone 2 1 2
Raritan Boro 5 5 1
Rocky Hill Boro 1 0
Somerville Boro 10 9 1
South Bound Brook 6 3 2
Warren Twp 35 10 4
Watchung Boro 10 4 3
Totals 277 233 1


Two areas had no sales last month:

  • Millstone
  • Rocky Hill

Two sales or less each last month:

  • Peapack/Gladstone


  • Bernards/Bernards Twp. – 25 Sales
  • Bridgewater – 45 Sales
  • Franklin Twp. – 44 Sales
  • Hillsborough – 28 Sales
  • Warren/Watchung – 14 Sales

These hotspot areas equaled 67% of the sales last month. The average new listing coming on the market last month neared $691,169 The average unit price going “under contract” was $598,858 (13% less).


To get a competitive price point on your property based on location and uniqueness, contact me at (908) 304-4660. Coldwell Banker’s big data technology and Artificial Intelligence capabilities will give you a unique advantage. I can show you the latest age and earnings breakdown for your particular area where people move from into that area and how I can directly market to those specific areas and demographics. The result is that you receive the maximum selling price with a shorter time on the market.  Houses priced and marketed accurately sell faster, especially with a real estate industry veteran and local expert helping you navigate the process.


“Why” is it happening…


New Jersey’s Economic Drivers:

New Jersey Home Sales and inventory levels:

  • The rebound that started in June 2020 has continued through the fall of 2022 and is slowing to a more normal to declining pace in early 2023, making it look more like the pre-pandemic market (but when you have been going at 85 MPH, returning to 65 MPH seems like it has slowed down considerably).
  • We have seen signs of first-time buyers cooling down due to higher pricing (price fatigue),  inventory shortages, and the rising interest rate factors pushing many of them out of the market.
  • Many possible sellers are experiencing difficulty in finding other suitable housing themselves and now adjusting to the higher interest levels. They get in their own way in not want to list until they can find and justify it.
  • The current month’s supply of inventory in Hunterdon and Somerset County is still way under two months, and this is due to the rapid sales of the fewer new listings as they come on the market, which is called velocity. The market does still remain active.
  • Hunterdon and Somerset County have slightly less inventory than they had a year ago.
  • Unsold inventory in N.J. has slowly but steadily decreased state-wide since peaking in July at over 20,000 to just under 13,000 today.
  • Decreases in inventory have occurred in many price points, with the under $400,000 market seeing the most considerable impact with 10% fewer homes and the $400K to $600K price tier seeing a decrease of 1%.
  • New housing has not kept up with our population growth.


Interest Rates:

  • Interest rates have improved nicely from their peak in 2022.
  • The economy is adjusting, and average Interest rates have climbed a bit for now to just under 6.5% for a 30-year conventional mortgage. A fifteen-year conventional mortgage rests around the 5.75%  mark. Many buyers are considering attractive ARM rates as well as other buy-down plans as alternatives.
  • Also, we are now seeing additional activity to ease (or temper) the amount of mortgage-backed securities that the Fed buys each month, which will negatively affect rates going forward. In effect, the rates have also moved up due to this.
  • Based on the current rates, we are still seeing a drop in first-time buyer mortgage apps but are still active in restructuring debt and paying down high-interest items.
  • The fed’s efforts to slow things down have resulted in the above. If inflation continues to rise, so will interest rates.


National Job Front:

  • Total nonfarm payroll employment increased by 311,000 in February, and the unemployment rate rose to 3.6%. The number of unemployed persons rose slightly to 5.9 million in February.
  • We have to keep in mind that we have natural job growth of about 175K per month, which this number includes.
  • The labor force participation rate increased by 0.1 percentage points over the month to 62.5 percent. Note: This number is calculated by dividing the sum of all workers who are employed or actively looking for a job by the working-age population.
  • Also, we are seeing many resignations as the workforce repurposes itself. These are due to people switching careers due to the desire to pursue new career paths, perceived health risks in their current jobs, the desire for more remote work, and better work-life balance. New technology-based jobs are now affecting this trend.
  • In the under $50K earners, there is even some incentive not to work and collect benefits for an advantage over wages.
  • And as a result, we currently have about 5.9 million unemployed, while there are an estimated 12 million job openings at this point. That is two jobs available for every job seeker driving wages up.
  • The lower end of the job market has benefited the most from this phenomenon as we see higher starting pay rates competing for the lack of workforce. We are already seeing jobs starting in the mid to upper $20 per hour ranges being offered.

New Jersey Job Front:

  • The NJ unemployment numbers are the same as the U.S. at 3.4% for the last month reported, which was December.  NJ has now fully recovered all of the jobs lost in the initial months of the pandemic.
  • Construction, food services, and accommodations are again the leaders in job losses, though more states are now citing pain in retail and wholesale trade. Health care, social assistance, and manufacturing are shedding workers, too.
  • N.J. was hit early and hard by the pandemic, with almost twice the national rate of job losses.  So, where it is currently is quite remarkable.
  • But, the job losses will undoubtedly impact the lower end of the buyer’s market in 2022.

Rental Market Trends:

  • Rental prices in New Jersey rose again through 2022, averaging 4+% higher year-over-year, and are averaging just over $2,100 per unit (showing recent decreases).
  • The central N.J. vacancy rate now stands at 3.3%, resulting which is a minimal rental supply and driving up rental prices.
  • The rental market sector usually reflects some low-end buyers now renting due to inventory constraints. This sector has now risen due to mortgage constraints as well.

New Jersey Foreclosures:

  • This is a bright spot for NJ.
  • The delinquency rate in NJ has decreased again.
  • Current foreclosures in NJ are at 1.5%, which is good news.
  • On a national basis, there is sufficient equity ($11 Trillion) to protect most homeowners should we encounter a recession (which seems inevitable).
  • And we have an average FICO score of mortgage holders of over 750 vs. the under 700 number we saw with the last bust in 2008.
  • Yet, a slowdown and recession could cost jobs and put more mortgages at risk in the future.
  • Only 18% of mortgages in forbearance are at risk nationwide due to forbearance issues not being resolved.  So, a housing bust is not predicted to be anywhere on the horizon.
  • However, this effect will be nowhere near the last housing crisis since the is a lot of positive equity in houses today as many homeowners have more equity due to the past several year’s appreciations.

Real Estate Market Recap



  • The effect of the COVID-19 pandemic now seems to be almost under control (let’s hope).
  • The economy is not facing a slowdown, with the GDP trending down for the last two quarters.
  • Supply chain shortages have been affecting inflation. Even now, there are some concerns that we may be oversupplied, which could suddenly reverse, causing massive price reductions and possible lay-offs.
  • Inflation (recently rising) is continuing to cause havoc on auto, finished goods, and energy pricing. And, as said, it is the enemy of long-term interest rates.
  • The continued invasion of Europe has shed some doubt on market predictability.  In effect, we have never seen a pandemic followed by a war. The near future is somewhat unpredictable.
  • Mortgages have ceased to drop and are now back up to 6.5% as the fed is tapering its current level of investment in mortgage-backed securities.
  • Inventory supply has now started to pull back as a result of strong sales as we move further into 2023.
  • The housing affordability index is rising, with mortgage payments nearing 30% of gross.
  • Due to COVID-19 and recent unrest in NYC, we have started to see more interest in living in more suburban counties such as Hunterdon and Somerset. That has all but disappeared.
  • Also, many people have found that working from home (either in total or part) is a reality, and we will see less commuting and traveling in general as things start to open up once again.
  • What were once “bedroom” communities are changing to” live, work, play & learn” communities bringing lots of change to our local economies.
  • It is only a matter of time before we see more jobs (or remote capabilities) following workers into our suburban areas.
  • Job opportunities will surely follow the workforce and housing, then follow jobs.  It seems out of logical sequence but will sort itself out as we progress.
  • Retailing and using vacant industrial space will transform to meet the new altered demands and lifestyles.
  • More attention is now given to houses with pools and backyard spas and less open areas, which lend themselves to working and studying at home.
  • And the local market will have to adapt to the new suburban renaissance of where people will be working and what they will need to adapt to this.
  • The lingering question has been, “Can we keep this momentum up with low to falling inventory?”. This seems to have waned as predictions for slower sales and price increases in the balance of 2023.
  • Also, what will be the continued effect of inflation on the economy? It is already affecting mortgage rates. And retail sales are not advancing faster than inflation. This is very concerning.
  • Depending on their location and price points, local property values saw at least 18%+ appreciation in 2021 and another 12% in 2020. The 2022 appreciation forecast came in at 9%, and 2023 could face some possible pullback in the higher price points and little growth in the lower ones.
  • Days on the market in our area pulled back, showing buyers are becoming more active.
  • But change is resulting in a back towards a more normalized environment if inventory continues coming onto the market and the first-time buyer fatigue that we have seen continues.
  • We still have many younger (millennial) buyers coming of age in the pipeline for at least the next four to five years, which will continue to put more demand on the first-time buyer market, usually under $400K.


Wow.  That is a lot to digest.  And it is changing daily but seems to be heading in the right direction for now.  For clarity and understanding, I am always available if you want to talk and better understand how this might affect your particular situation. You can contact me at (908) 304-4660.

Note:  Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. I took reasonable precautions in presenting this information. Please consult with a professional sales agent and take no action based on my opinions, gathered trends, and statistics.  I assume no liability.

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