The objective of this market report is to utilize my local expertise to provide a clear understanding of the real estate market in Hunterdon County. My monthly market update will guide you through the economic conditions and trends that impact our local markets. The update also provides hyper-local statistics that are not readily available elsewhere. By the end of the report, you will not only know what is happening in the Somerset County market but also understand why (the reasons behind it). This will enable you to stay informed and make informed decisions when buying or selling a home in 2023.

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


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

Based on inflation fears and weaker economic indicators, interest rate hikes have increased slightly through April. Additionally, sellers have become more reasonable in their pricing and are willing to negotiate, making it an excellent opportunity for potential home buyers to re-enter the market. We are even starting to see appraisals come in lower than bids in some over-bid situations.

We are witnessing about a 50% reduction in new listings and around a 33% reduction in sales vs. the same time last year.

The market appears to be returning to a more normal state, with fewer offers above the asking price, and bids are now back to containing contingencies such as a mortgage, home sale, and inspection. Newly listed inventory has increased from the previous month, and the total inventory is also up. However, demand still surpasses supply, which has kept prices stable in our area, except for the upper price points, where prices seem to be under pressure as those markets appear headed towards a neutral or even buyer’s market.

You’ll find the answer here if you’re wondering whether to buy or sell. The market still strongly favors sellers due to fast-moving inventory, which has kept prices stable in our area. However, it seems to be gradually transitioning back to a buyer’s market at the higher price points. The prices rose nearly 12% in 2020, 18% in 2021, and 8% in 2022. However, we don’t expect significant growth in early 2023, and the higher-priced homes may experience a pullback in value in the new calendar year.


Market Statistics for Somerset County:

  • Last month, the market saw an increase in new inventory with 220 new listings, compared to 202 in the previous month. However, this decreased from the 493 new listings seen in the same month in 2022.
  • As of the beginning of this month, the available inventory has increased to 373 units, up from 337 units last month. However, this is still higher than the 326 units available in the same month last year.
  • The number of units that went “under contract” last month was 279, which is an increase from the previous month’s 270, but a decrease from the 402 units in the same month last year.
  • Over the past month, the average number of days on the market has decreased from 27 to 28 days, indicating a small rise in buyer demand.
  • Currently, the month’s supply of inventory stands at just under 1.5 months, indicating a strong seller’s market. This trend holds true for properties priced under $1,000K.

The present market conditions exhibit an optimal supply and demand curve that favors our sellers. Therefore, waiting until later in 2023 to sell may not be a wise strategy. The current market is at its peak, and it’s unlikely to witness any significant price increases or sustain the high price points for much longer. It’s advisable to take advantage of the current market situation and list your property for sale now.


New Jersey Residential Real Estate Market Forecast

The fall season of 2022 brought about solid listings and sales, despite not being as strong as the previous year, which was anything but average. This was attributed to the increased move to the West (urban flight), pent-up demand, declining mortgage rates, and sellers entering the market as Covid-19 concerns waned.

Although inventory levels remain low, new listings are selling quickly, resulting in strong sales for sellers. However, the most significant uncertainty in 2023 is finding a more suitable home and an affordable mortgage.

On the buyer side, it is estimated that the median-priced house’s purchase will require a $30-35k increase in annual income compared to just a year ago due to rising mortgage rates as a percentage of their income. This has resulted in many first-time buyers being priced out of the market. Nonetheless, if possible, it is an excellent time to purchase a home as the terms have stabilized due to the lack of competition, and refinancing is always an option as interest rates decrease in the future.

Due to fewer listings and the fast sales pace, there have been fewer open houses and attendees in 2023.


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

May May Total
Somerset County New Under Active Months’
Listings Contract Listings Supply
Condos/Town Houses * 73 102 104 1
Over 55 Communities* 12 17 26 2
$000K to $199K 7 2 10 5
$200K to $299K 15 18 19 1
$300K to $399K 38 55 45 1
$400K to $499K 34 55 58 1
$500K to $599K 13 26 26 1
$600K to $699K 16 25 19 1
$700K to $799K 24 26 35 1
$800K to $899K 11 20 17 1
$900K to $999K 11 13 20 2
$1,000K and Up 51 39 124 3
Totals for May 220 279 373 1
Average Price $903,919 $650,576 -28.0%
Average Days on Market 27
* Included in $ breakdowns
  • 47% of sales in houses > $500,000
  • 39% of sales in $500,000 to the $800,000 range
  • 14% percent of total sales (or 10 in total) in houses >$800,000

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

Active Listings Under Contract Month’s Supply
Bedminster Twp 13 14 1
Bernards Twp 36 23 2
Bernardsville 17 14 1
Bound Brook 10 4 3
Branchburg Twp 14 11 1
Bridgewater Twp 40 38 1
Far Hills Boro 6 0
Franklin Twp 60 44 1
Green Brook 10 10 1
Hillsborough 36 30 1
Manville Boro 12 12 1
Millstone Boro 1 0
Montgomery Twp 26 17 2
North Plainfield 14 16 1
Peapack Gladstone 5 1 5
Raritan Boro 5 6 1
Rocky Hill Boro 1 1 1
Somerville Boro 12 8 2
South Bound Brook 3 3 1
Warren Twp 39 21 2
Watchung Boro 13 6 2
Totals 373 279 1

Two areas had no sales last month:

  • Far Hills
  • Millstone

Two areas had sales or less each last month:

  • Peapack/Gladstone
  • Rocky Hills


  • Bernards/Bernards Twp. – 37 Sales
  • Bridgewater – 38 Sales
  • Franklin Twp. – 44 Sales
  • Hillsborough – 30 Sales
  • Warren/Watchung – 27 Sales

These hotspot areas equaled 63% of the sales last month. The average new listing coming on the market last month neared $903,919. The average unit price going “under contract” was $650,576 (28% less).



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 the latest age and earnings breakdown for your area, 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:

  • The market rebound that started in June 2020 has persisted through the fall of 2022 and is now slowing to a more normal to declining pace in early 2023.
  • There are early signs of some pullback in pricing at the higher price tiers.
  • First-time buyers are cooling down due to higher pricing, inventory shortages, and rising interest rates.
  • Potential sellers find it challenging to locate suitable housing and are hesitant to list until they do. They are also dismayed by interest rates that are higher than they currently have in place on their current homes.
  • The current month’s supply of inventory in Hunterdon and Somerset County remains well under two months due to the rapid sales of new listings, which is called velocity. However, the market remains active.
  • Hunterdon and Somerset County have slightly more inventory than a year ago. The unsold inventory in New Jersey has steadily decreased since reaching a peak in July of over 20,000 to just under 13,000 today.
  • Inventory reductions have occurred in all price ranges, with the under $400,000 market experiencing the most significant impact with 25% fewer homes and the $400K to $600K price tier seeing a decrease of 16%.
  • New housing development has simply not kept up with population growth.


Interest Rates:

  • Interest rates have improved significantly since their peak in early 2023 but are a bit higher than last month’s numbers.
  • The economy is adjusting, and the average interest rates for a 30-year conventional mortgage have climbed slightly to just under 6.4%, while a fifteen-year conventional mortgage is around the 5.7% mark.
  • Many buyers are considering attractive ARM rates and other buy-down plans as alternatives.
  • Additional activity to ease or temper the amount of mortgage-backed securities that the Fed buys each month is now being seen, negatively affecting rates in the future.
  • 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. If inflation continues to rise, so will interest rates.
  • The Fed is expected to raise the rate another 1/4 point in early May.


National Job Front:

  • In March, total nonfarm payroll employment slowed to 236,000, and the unemployment rate fell to 3.5%. The number of unemployed persons dipped slightly to 5.8 million.
  • It’s important to note that natural job growth of about 175K per month is included in this number.
  • The labor force participation rate decreased by 0.1 percentage points over the month to 62.5 percent. This rate is calculated by dividing the sum of all workers employed or actively looking for a job by the working-age population.
  • Many people are 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.
  • In the under $50K earners, there is even some incentive not to work and collect benefits, contributing to the current unemployment rate.
  • There are an estimated 9.6 million job openings, while about 5.8 million people remain unemployed. This means two jobs are available for every job seeker, increasing wages.
  • The lower end of the job market has benefited the most from this trend, with higher starting pay rates competing for the lack of workforce. Jobs starting in the mid to upper $20 per hour are already being offered.


New Jersey Job Front:

  • The unemployment rate in NJ for February is 3.5%, the same as the national rate.
  • NJ has recovered all the jobs lost during the early months of the pandemic.
  • Job losses are still prevalent in industries such as construction, food services, and accommodations, with retail and wholesale trade also experiencing a downturn in some states. Even health care, social assistance, and manufacturing are shedding workers.
  • NJ was hit harder than most states in the early months of the pandemic, but it has made a remarkable recovery since then.
  • However, the job losses may still impact the lower end of the buyer’s market in 2022.

Rental Market Trends:

  • Rental prices in New Jersey have continued to increase in 2022, with a year-over-year average of over 4%, and are currently averaging just over $2,100 per unit. However, recent data shows a slight decrease in these prices.
  • The vacancy rate in central New Jersey is currently at 3.5%, indicating a limited rental supply and leading to a rise in rental prices.
  • The rental market typically includes some low-end buyers who opt to rent due to a shortage of available inventory. However, the recent constraints in the mortgage market have also contributed to the increase in this sector.

New Jersey Foreclosures:

  • The delinquency rate in NJ has decreased, which is a positive development.
  • NJ’s current foreclosure rate remains low at 1.5%.
  • Nationally, there is $11 trillion in equity 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.
  • Only 18% of mortgages in forbearance are at risk due to unresolved forbearance issues.
  • A housing bust is not predicted to occur since there is a lot of positive equity in houses, thanks to recent appreciations.

Real Estate Market Recap


  • The COVID-19 pandemic seems to be almost under control, but the economy is not facing a slowdown, with the GDP trending down for the last two quarters.
  • Supply chain shortages have affected inflation, and concerns remain that oversupply could suddenly reverse, causing massive price reductions and possible lay-offs.
  • Inflation is continuing to cause havoc on auto, finished goods, and energy pricing and is the enemy of long-term interest rates.
  • The continued invasion of Europe has shed some doubt on market predictability, and the near future is somewhat unpredictable.
  • Mortgage rates have dropped and are now back up to 6.4% as the Fed is tapering its current level of investment in mortgage-backed securities.
  • The inventory supply has increased slightly, and the housing affordability index has improved slightly, but mortgage payments are still nearing 30% of gross.
  • Due to COVID-19 and recent unrest in NYC, interest in living in more suburban counties such as Hunterdon and Somerset has disappeared.
  • 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.
  • Retailing and using vacant industrial space will transform to meet the new altered demands and lifestyles.
  • 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.
  • The lingering question has been, “Can we keep this momentum up with low to slightly rising inventory?” as predictions for slower sales and price increases in the balance of 2023 have already been made.
  • Depending on their location and price points, local property values saw at least 18%+ appreciation in 2021 and another 12% in 2020, with the 2022 appreciation forecast at 9%.
  • Days on the market in our area pulled back slightly, 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.
  • Younger (millennial) buyers are 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.

This is a substantial amount of 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 individual circumstances, please don’t hesitate to reach out to me at (908) 304-4660. I’m always available to chat and assist you in gaining a better understanding.

Note:  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 the guidance of a professional sales agent and avoid making any decisions solely based on my views, gathered trends, and statistics. I am not responsible for any consequences that may result from the utilization of this data.



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