A deep dive into buyer pool exhaustion and what it means for your next real estate move
If you’ve been following the New Jersey housing market lately, you’ve probably noticed something interesting: despite high mortgage rates and expensive home prices, houses are still selling quickly and often above asking price. But here’s the big question everyone’s asking: How long can this last?
We recently analyzed what’s happening with New Jersey’s “buyer pool” – essentially, how many qualified buyers are still out there looking for homes. What we found might surprise you, especially if you’re thinking about buying or selling in the next year.
The Big Picture: New Jersey’s Buyer Challenge
Let’s start with some context. New Jersey home prices have been climbing steadily, with the median home now costing around $538,000 to $560,000 depending on where you look. That’s about $120,000 more than the national average. At the same time, mortgage rates are sitting around 7%, making monthly payments much higher than they were just a few years ago.
So who can still afford to buy?
We broke down New Jersey buyers into four groups:
The Ultra-Wealthy (Top 5%): These buyers earn over $200,000 per year and can handle pretty much any price range. They’re still actively buying, especially in premium areas like Bergen and Hudson counties.
High-Income Buyers (15-20%): Earning $100,000-$200,000 annually, these buyers are active but getting pickier about what they’ll pay for.
Middle-Income Buyers (20-25%): Making $60,000-$100,000 per year, this group is increasingly priced out of much of the market, especially in North Jersey.
Everyone Else (50-55%): Unfortunately, most New Jersey residents earning under $60,000 are functionally locked out of homeownership in today’s market.
What This Means for Sellers
The Good News: If you’re selling in the next 6-12 months, you’re still in a strong position. There are enough qualified buyers to keep competition alive, especially for well-priced homes.
The Reality Check: The pool of buyers who can afford your home is getting smaller. This means:
- Price it right from the start. Overpriced homes will sit longer as buyers become more selective.
- Expect more negotiation. Buyers are asking for repairs, credits, and concessions more often.
- Consider timing. The seller’s market advantage is strongest now but may weaken through 2025.
Location Matters: If you’re selling in expensive North Jersey counties, you might see this shift sooner than sellers in more affordable South Jersey markets.
What This Means for Buyers
The Challenge: Competition is still fierce, but it’s changing. While 46% of homes still sell above asking price, that’s down from recent highs.
The Opportunity: More inventory is coming to market, giving you more choices and negotiating power than you’ve had in years.
Strategy Tips:
- Get pre-approved and be ready to act on well-priced homes in good locations
- Consider expanding your search area – you might find better value in Central or South Jersey
- Look into assistance programs – New Jersey offers up to $22,000 in down payment help for qualified first-time buyers
The Hunterdon County Exception
We took a special look at Hunterdon County because it’s fascinating. Despite being one of the wealthiest counties in America (median income of $139,453), the housing market there is showing signs of buyer fatigue.
Even wealthy buyers have limits. With median home prices around $590,000 and some townships seeing homes over $900,000, even high-income families are starting to look at neighboring counties for better value.
For Hunterdon County Sellers: The ultra-premium market (homes over $800,000) is softening first. Price competitively and consider listing sooner rather than later.
For Hunterdon County Buyers: You have more options now than you’ve had in years, especially in townships like Flemington and Tewksbury.
When Will Things Change?
Based on our analysis, we expect the New Jersey market to shift toward more balance between late 2025 and early 2026. Here’s why:
- Buyer Pool Math: The rate at which qualified buyers are “consumed” by the market is approaching the rate at which new qualified buyers enter the market.
- Affordability Limits: Even in wealthy areas, buyers are reaching their financial limits.
- Geographic Shifting: We’re seeing buyers migrate from expensive North Jersey to more affordable Central and South Jersey markets.
Three Possible Scenarios
Scenario 1: Gradual Cooldown (Most Likely) Inventory slowly increases, competition moderates, and price growth slows to 2-4% annually. This gives both buyers and sellers a more balanced market.
Scenario 2: Affordability Crisis If rates stay high and prices keep climbing, we could see a sharper correction as more buyers get priced out entirely.
Scenario 3: External Shock Economic changes, policy shifts, or employment disruptions could accelerate market changes in either direction.
What to Watch For
Keep an eye on these key indicators:
- Homes selling above asking price: Currently 46% statewide, down from recent highs
- Days on market: Still low at 32-47 days, but increasing
- New listings: Growing in most areas, giving buyers more choices
- Price cuts: Increasing from 16% to nearly 20% of listings
Bottom Line: Timing and Strategy Matter More Than Ever
Whether you’re buying or selling, the key is understanding that this market is in transition. The days of bidding wars on every property are fading, but we’re not heading for a crash either.
For Sellers: Price realistically, prepare your home well, and don’t wait for “the perfect moment” – it may have already passed.
For Buyers: Stay patient but ready to act. Your negotiating power is increasing, but good homes in good locations still move quickly.
For Everyone: Work with an agent who understands these market dynamics and can help you navigate the changing landscape.
The New Jersey housing market isn’t running out of buyers entirely, but it is running low on buyers who can afford today’s prices. That shift creates both challenges and opportunities, depending on which side of the transaction you’re on.
The smart money is on understanding these trends and positioning yourself accordingly. Whether that means pricing your home to sell quickly or being ready to move fast on the right property, success in this market comes down to strategy, not just waiting for perfect conditions.
Want to know how these trends specifically affect your situation? Talk to a local real estate professional who can help you navigate your particular market and price range.
