Suburban New Jersey communities are experiencing a significant housing boom, characterized by aggressive bidding wars and homes selling well above their asking prices. Towns like Maplewood, South Orange, and Montclair are at the forefront of this trend, with limited inventory and a surge in demand from buyers, many of whom are relocating from New York City.
Properties in these areas are frequently going under contract in under two weeks, with average sale prices often exceeding asking prices by double-digit percentages. For instance, a home at 42 Euclid Ave in Maplewood listed at $1,795,000 sold for $2,279,000, a 27% increase. Similarly, a property on 376 Melrose Place in South Orange, initially priced at $998,999, closed at $1,332,200, representing a 33% premium.
According to realtor Mark Slade of Keller Williams Midtown Direct Realty, who has tracked these markets since 2009, this upward trend has been consistent, with recent years showing dramatic acceleration, particularly since the pandemic. Slade attributes the current market frenzy to a "value convergence equilibrium," where buyers from Northern New Jersey are recognizing the affordability of homes compared to those in areas like Westchester and Long Island, while still maintaining manageable commutes to Manhattan. Buyers are typically coming from Manhattan, Brooklyn, Hoboken, and Queens, seeking to upgrade from their current residences.
The supply of homes has not kept pace with demand. Maplewood, for example, has a limited number of active listings at any given time, creating what Slade describes as a "hypermarket" where homes under contract nearly double the number of active listings.
This increased demand and competition are changing the character of these towns, with some longtime residents expressing concerns about rising prices and the influx of affluent, time-pressed buyers. This dynamic has also led to a ripple effect, where buyers priced out of more expensive towns like Montclair are moving to Maplewood, and those priced out of Maplewood are considering West Orange or Union.
Slade expects the trend to continue, citing the state's density which limits new construction and the unlikelihood of significantly lower mortgage rates in the near future. He suggests that buyers should anticipate bidding wars as a standard part of the current market scenario due to the imbalance between buyer numbers and available homes. He notes that some buyers, driven by a strong desire to secure a home, are making offers that significantly outpace others, drawing an analogy to choosing the largest ice cream size at a popular chain.
Homes like 8 Colony Dr in West Orange, which sold for $1,178,000 against an $865,000 list (a 36% jump), and 35 Porter Pl in Montclair, which closed at $1,525,000 on a $1,395,000 ask (a 30% premium per square foot over town average), exemplify the intense bidding activity.