The basic law of supply and demand is boosting housing prices as the inventory of housing stock continues at historic lows, not just nationally and statewide but also in Rahway.
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“Covid-19 impacted the housing market in 2020, however, even before the shutdown there weren’t enough houses for sale to meet buyer demand,” said Audra Loccisano, a broker associate at RE/MAX Select and vice president of the Rahway Chamber of Commerce. “As of now, there is nothing to indicate that 2021 is going to be much different,” she said.
As the total number of houses sold has declined in the past three years so has the average days on the market while the sales-to-list price ratio has increased, eclipsing 100%. Loccisano provided the following data for Rahway:
| 2018 | 2019 | 2020 | 2021 | |
| Total Houses Sold | 332 | 323 | 228 | 56 |
| Sales Price/List Price Ratio | 99.10% | 99.50% | 101.30% | 101.20% |
| Average Days on Market | 57 | 53 | 30 | 27 |
| Average Sales Price | $266,826 | $289,364 | $335,987 | $349,827 |
In December, there were only 8 homes listed in Rahway. That jumped to 24 in January before dropping to 13 in February. Inventory also hit a three-year low of 8 in April just as the COVID-19 pandemic ramped up.
There were spikes of 37 in both June and July and 38 in September but the average monthly listings has dropped each of the last three years:
- 29.03 in 2018
- 25.67 in 2019
- 23.75 in 2020
“Limited inventory is definitely the reason why the average days on market are dropping and the sales/list price ratio is over 100%,” Loccisano said. “Inventory in Rahway has been relatively low the past four to five years continuing the trend of a ‘seller’s market,'” she said.
In normal years, inventory hits its annual low point around now in February and then starts to trend up.
Housing inventory is “ridiculously low” across New Jersey, according to this nj.com story. There were 23,011 single-family homes, townhomes and condominiums, and adult community properties available for sale in January 2021, almost half as many as January 2020. The median sales price for a single-family home in New Jersey in January was $504,585 — 22% more than the median price a year ago.
Single-family homes are selling for 100.2% of the listing price, up from 97.3% in January 2020. Single-family homes are on the market for 44 days on average, down from 72 last year, according to a report from New Jersey Realtors.
A story in The New York Times last week echoed similar sentiments about housing inventory nationally. “When there aren’t a lot of options out there to buy, would-be sellers get skittish about finding their own next home and back out of the market themselves.
“For more than a decade, less housing has been built relative to historical averages. The housing crash decimated the home building industry and pushed many construction workers into other jobs. Local building restrictions and neighbor objections have slowed new construction. ”
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