The New Jersey housing market in January 2025 presents a complex landscape, characterized by a mix of rising prices and fluctuating sales dynamics. The Median Sales Price for homes in the state has reached $538,300, marking a modest year-over-year increase of 0.9%. This indicates a steady appreciation in home values, albeit at a slower pace compared to the previous year.

In contrast, the Median List Price has surged by 7.7% year-over-year, now standing at $537,400. This significant rise suggests that sellers are optimistic about the market's potential, possibly driven by the increased demand and limited inventory. The median Price Per Square Foot has also seen a notable increase of 9.8%, reaching $325, while the Median List Price per square foot has risen by 8.7% to $333. These figures highlight a competitive market where buyers are willing to pay more per square foot.

Sales activity in New Jersey has been robust, with 5,789 Homes Sold in January, reflecting an 8.1% increase from the previous year. Pending Sales have also grown by 3.6%, totaling 6,576. However, New Listings have only seen a slight uptick of 0.7%, reaching 7,009. This limited growth in New Listings, coupled with a 2.1% decline in inventory to 14,062, suggests a tightening market where demand outpaces supply.

The Months of Supply, a critical indicator of market balance, has decreased dramatically by 30.0% year-over-year, now at 2.4 months. This sharp decline underscores the competitive nature of the market, with fewer homes available relative to the pace of sales. Consequently, the Median Days on Market have increased by 5.0%, now averaging 47 days, indicating that while homes are selling, they may take slightly longer to do so compared to last year.

The average sale to list ratio remains strong at 100.9%, though it has experienced a slight decrease of 0.1% year-over-year. This suggests that homes are generally selling close to their asking prices. However, the percentage of Homes Sold above list price has decreased by 1.7%, now at 46.3%, indicating a slight shift in buyer leverage.

Price Drops have become more common, with 15.9% of listings experiencing reductions, up by 2.8% from last year. This trend may reflect sellers adjusting expectations in response to market conditions. Additionally, the percentage of homes going off the market within two weeks has slightly decreased by 0.3%, now at 26.7%, suggesting a marginal slowdown in the speed of transactions.

Overall, the New Jersey housing market in January 2025 is characterized by rising prices and strong sales activity, despite a tightening inventory and longer days on market. Buyers face a competitive environment, while sellers benefit from appreciating home values, albeit with some adjustments in pricing strategies.