The Essex County housing market slowed in the second quarter of 2023, but pricing reached an historic high.

 Essex County closings were down dramatically, falling 24.0% for the quarter and 27.5% for the rolling year. Similarly, pending sales, which are a leading indicator to future closings, were down 18.8% for the quarter and 20.2% for the rolling year.  That said, we are comparing against the very tail end of a historic housing bull market, so part of the decline is because we’re measuring off an all-time high baseline. Accordingly, we are likely to see sales start to stabilize compared to last year’s numbers, simply because we will have a lower baseline to clear.

But the decline in sales has not affected prices, which continued to rise. Prices were up a whopping 8.2% on average and 3.3% at the median for the quarter and 7.5% on average and 3.7% at the median for the rolling year. Prices are still going up because Essex simply does not have enough homes for sale, which is still driving buyer competition even with lower levels of demand suppressed by higher interest rates.  Essex had only 2.7 months of inventory available at the end of the quarter, well below the six-month level that marks a “balanced market.”  Essentially, we have too many buyers chasing too few homes for sale. And the situation will not get better anytime soon, with new listings down 29.1% compared to last year’s second quarter.

Going forward, we do believe we will eventually see sales stabilize near last year’s levels, and that low levels of inventory will continue to push prices up through the end of the year.

Sales in the Sussex County market continued to decline in the second quarter of 2023, but prices reached historic highs.

Like the other counties in the region, Sussex County closed sales fell dramatically from last year, dropping 20.2% for the quarter and 27.4% for the rolling year. And pending sales, which are a leading indicator of future closings, were down 21.2% for the quarter and 22.0% for the year. We should note that we are comparing against a quarter and rolling year that were at the very tail end of a historic housing bull market, so part of the decline is because we’re measuring off an all-time high baseline. Accordingly, we are likely to eventually see sales start to stabilize compared to last year’s numbers, simply because we will have a lower baseline to clear.

Even with sales down, though, prices went up, reaching historic heights and recovering from a slight stumble in the first quarter. Prices were up 2.2% on average and 2.9% at the median for the quarter, and are now up 3.7% on average and 3.0% at the median for the rolling year. Prices are still rising because of Sussex’s severe lack of inventory, with the months of inventory leveling off at 3.2 months, well below the 6.0 level that signals a “balanced” market.  We still have too many buyers chasing that minimal inventory. And we don’t see any relief in sight, with new listings down 30.7% from last year’s already-depressed second quarter.

Going forward, we do believe we will see sales stabilize at last year’s levels, and that low levels of inventory will continue to drive some price appreciation through the end of the year.