In this Market Update, we review the most recent housing data from February 2025, highlighting key developments across six counties: Bergen, Morris, Passaic, and Sussex in New Jersey, and Orange and Rockland in New York. We then forecast market conditions for March and April 2025, highlighting trends in inventory, prices, and buyer competition. Finally, we look ahead to the broader six-month horizon, offering insights on mortgage rates, supply constraints, and emerging buyer and seller dynamics.

Summary of the Most Recent Market Data & Past Trends

High Mortgage Rates & Consumer Sentiment

Mortgage rates remain elevated, hovering between 6.5%–7% for a 30-year fixed. Although these rates are higher than pre-2022 norms, many buyers have adjusted their expectations—recognizing that a return to ultra-low rates is unlikely in the near future. Meanwhile, owners locked into 3–4% mortgages remain hesitant to sell, a dynamic often referred to as the “lock-in effect.”

Despite affordability challenges, buyer sentiment remains resilient. Fannie Mae’s Home Purchase Sentiment Index suggests that while consumers are cautious about interest costs, a sizable number still believe home prices will keep rising, making them reluctant to wait too long. This psychological shift—accepting that rates could stay high for the foreseeable future—helps sustain demand, especially in moderately priced segments.

The Consequences of Tight Inventory

Limited inventory is the unifying theme across all counties. Even buyers facing rate sticker shock must compete for the relatively few listings on the market. New construction has not ramped up sufficiently to offset this shortage, and potential sellers worry they might not find suitable replacement homes.

In February:

  • Most counties reported inventory levels on par with or lower than the same time last year.
  • Sellers who did list often received offers at or above asking prices.
  • Homes that showed well and were reasonably priced tended to go under contract in under six weeks (and even faster in some counties).

These conditions strongly favor sellers, keeping upward pressure on prices. Even so, rising home values paired with high mortgage rates make affordability a key concern as we head into spring.

A Look at Sales Activity

Transaction volumes in February varied by county:

  • Bergen County recorded roughly 420 closed transactions in February, up about 12% YOY. This surge reflects pent-up demand meeting limited inventory.
  • Morris County saw around 340 closings, a ~14% improvement from the previous year. Buyers there have proven willing to act despite higher borrowing costs.
  • Passaic County, hindered by severely constrained listings (just 293 actives in February), nonetheless managed a 5% YOY sales bump. Multiple-offer scenarios remain commonplace.
  • Sussex County logged around 140 closed deals, roughly 9% above last year’s pace, aided by spillover buyers seeking more affordable options.
  • Orange County posted about 265 sales, a 3% YOY rise. Its days on market are notably higher than some NJ counties, but demand remains steady.
  • Rockland County saw near 185 closings, up ~2% from February 2024, reflecting stable buyer interest.

In summary, while total sales remain below the frenetic levels of 2021–2022, they are notably stronger than many observers expected at rates near 7%. Demand has proven more resilient than predicted.

Pricing Trends: Staying Firm

Though some analysts anticipated a price slowdown once rates crossed 6%–7%, the chronic under-supply of homes has propped up valuations. In fact, February median sale prices in all six counties showed year-over-year gains, often in the mid- to high single digits—or even double digits in a few. Passaic and Sussex, for example, each posted ~8–10% price growth annually.

Prices are unlikely to drop meaningfully this spring unless there’s a major shift in either mortgage rates or inventory availability. For now, sellers who list competitively stand to benefit from continued upward momentum, while buyers compete within a limited pool.

County-Level Market Forecast: March & April 2025

Below are county-specific forecasts for both March and April. These projections draw on recent data, seasonal patterns, and the ongoing effects of high mortgage rates.

Bergen County, NJ

  • Inventory & New Listings: From ~700s in February, active listings may rise to the mid-700s in March and surpass 800 by April. Though spring typically boosts new listings, many homeowners remain locked into low rates, preventing a full rebound in supply.
  • Prices: The median sale price could hover near $820K in March and reach $830K–850K in April, implying high single-digit or low double-digit annual growth. Competition for desirable homes remains fierce.
  • Offers & DOM: Buyers should expect above-list sales in March (around 102–103% of asking) with DOM dipping into the mid-30s. By April, DOM may fall closer to 30 days, and sale-to-list ratios should stay at or just above 102%.

Morris County, NJ

  • Inventory & New Listings: After the high 300s in February, active listings might climb into the 420–450 range in March and roughly 450–500 by April. Even with these gains, overall supply remains short of year-ago levels.
  • Prices: The median price may sit around $655K–665K in March and edge up to $660K–670K in April, reflecting incremental increases as demand persists.
  • Offers & DOM: March sale-to-list ratios of 101–102% keep DOM near 40 days. By April, expect DOM to tighten to 30–35 days, with many homes still selling at or slightly above list.

Passaic County, NJ

  • Inventory & New Listings: From roughly 293 in February, Passaic may see 320–350 listings in March and up to 350–400 in April—still highly constrained relative to demand.
  • Prices: Robust buyer competition could place March’s median in the mid- to upper-$500Ks, pushing toward $600K by April if multiple offers continue.
  • Offers & DOM: In March, sale-to-list ratios around 102–103% keep DOM near 40–45 days. By April, that dynamic should hold, with select listings snapped up even faster.

Sussex County (NJ)

  • Inventory & New Listings: Active listings may move from ~280 in February to 300–340 in March, then 320–380 by April. Rural appeal plus affordability draws buyers, but supply remains limited.
  • Prices: The median may hover in the low $400Ks for March, climbing into $420K–440K by April—around 6–7% higher year-over-year.
  • Offers & DOM: Expect sale-to-list ratios near 102–103% for both months. DOM could run 45 days in March and possibly drop closer to 40 by April if demand intensifies.

Orange County (NY)

  • Inventory & New Listings: February’s ~600 active listings might reach 620–650 in March and 650–700 in April. Though not as severe as some NJ counties, supply still lags behind buyer interest.
  • Prices: March’s median may be around $480K, rising to $490K–500K in April. High borrowing costs temper some buyers, but the overall market remains stable.
  • Offers & DOM: In March, sale-to-list may average 98–99% with DOM near 70 days. By April, if more buyers step in, DOM could improve to 55–65 days, nudging sale-to-list near 100%.

Rockland County (NY)

  • Inventory & New Listings: From ~305 in February, Rockland could reach 330–350 in March and 350–400 by April. Despite seasonal growth, it’s still below balanced-market thresholds.
  • Prices: The median might sit in the high $700Ks for March, climbing to $780K–820K by April—a moderate YOY increase.
  • Offers & DOM: In March, homes may sell near 99–100% of asking, with DOM in the low 50s. By April, DOM could drop to 40–45 days, and sale-to-list could cross 100% for attractively priced properties.

Six-Month Market Outlook (March–August 2025)

  1. Mortgage Rates & Affordability
    Economic forecasts suggest rates may stay in the 6.5–7% corridor until inflation eases more definitively. This “higher for longer” rate scenario will keep monthly payments elevated, limiting how fast prices can climb. Still, many prospective buyers who sat out in 2023–24 are entering the market, accepting that waiting for 4–5% rates may not be realistic near term.
  2. Inventory Prospects
    Expect a seasonal lift in listings through the spring, peaking in early summer. Even so, overall supply is likely to remain well below “balanced market” thresholds. Some homeowners will list to lock in gains, while others remain locked in by their own low-interest mortgages. Net result: modest improvement in inventory, but not enough to change the underlying seller’s advantage.
  3. Sales Volume
    With spring’s listing uptick and stable if elevated rates, closed transactions could outpace 2024 levels. Many would-be buyers who postponed moves may finally commit, fueling a steady flow of sales across counties. Volume will be stronger than the winter lull but below the pandemic boom peaks.
  4. Prices & Market Balance
    Over the next six months, prices should continue a slow ascent or at least remain firm due to supply constraints. Growth rates may moderate if affordability issues intensify, but outright price declines appear unlikely absent a large jump in mortgage rates or a shock to employment. By August, bidding wars might ease somewhat in higher price brackets, while mid-range homes likely see persistent competition.

Final Thoughts

February 2025 confirmed that housing demand has proven more robust than many anticipated under 6.5–7% mortgage rates. With historically lean inventory across these New York–New Jersey counties, home prices continue to climb, and sellers remain in a strong position. Looking ahead, March and April should bring a seasonal lift in both listings and buyer traffic, reinforcing the sellers’ market dynamic—even if prices cannot surge indefinitely amid affordability challenges.

For prospective buyers, preparation is key: seeking mortgage pre-approval, monitoring rate fluctuations, and acting decisively on suitable properties can be critical in a competitive environment. For sellers, the next couple of months may offer ideal conditions to list, with supportive pricing and motivated buyers. By late summer, slight market shifts could emerge as inventories peak and seasonal demand tapers, but any movement toward balance will likely be incremental.

 

Expect an updated report and forecast next month after the release of March data. Until then, happy home buying and selling from the team at Ridge & Valley Real Estate!

 

Disclaimers

  • Not Financial or Legal Advice: The information in this post is based on data trends and forecasting models. It should not be considered personalized financial or legal advice. Always consult a qualified professional before making real estate or investment decisions.
  • Uncertain Future Events: Real estate markets are sensitive to factors such as interest rates, economic policies, and broader economic shifts. Any unexpected change in these elements could alter the forecasts provided here.
  • Local Variations: Even within the counties discussed, there can be significant variations from one neighborhood or price segment to another. Local conditions can fluctuate rapidly, so these summaries may not apply uniformly to every part of each county.

Sources