The Real Estate Shift Is Happening Now

The real estate market is undergoing a clear shift. It’s not dramatic, but it’s noticeable. While not everyone sees it yet—and not across every price range—the change is here in Bergen County, across New Jersey, and throughout much of the U.S. As always, real estate remains hyper-local.

We’re still in a seller’s market, and that won’t change overnight. However, the signs of a cooling trend are becoming more visible and will continue to unfold over the next two years.

This month marks my 38th year as a full-time Realtor, and in all that time, I’ve never seen inventory levels this low. A balanced Bergen County market typically has at least 3,000 homes for sale. Today, there are only 726 listings. Of those, 463 are priced under $1.5 million, and roughly 10% already have accepted offers. That leaves just about 417 homes truly available. Prices remain high because of one simple principle: supply and demand.

How Did We Get Here?

I’ve been writing about the inventory crisis for 15 years. The mainstream media caught on about a decade ago, but the underlying problem has been building for much longer.

There are two main sources of homes entering the market: aging homeowners and move-up buyers. The first group—the Baby Boomers—are staying in their homes 10–15 years longer than previous generations. Meanwhile, Millennials are at their peak homebuying years and they're a huge population. The result? Too many buyers chasing too few homes.

This imbalance wasn’t catastrophic before the milennials; the market kept moving with just the lack of aging populaton moves. But then came COVID.

The COVID Effect

The pandemic caused an exodus from New York City and other dense urban areas. Families wanted space, safety, and backyards. Bergen County—and suburban New Jersey in general—saw a massive influx of buyers.

At the same time, the federal government intervened heavily to prevent an economic collapse. Stimulus measures were necessary but came with side effects, namely inflation. The Federal Reserve initially lowered rates to near zero to keep the economy moving. Mortgage rates dropped below 3%, compared to a pre-COVID national average of 7.89%.

Demand surged, prices soared, and sales hit record highs. In Bergen County, home prices jumped 15–17% in just two years—far above the normal 4.7–5% annual appreciation rate.

Inflation, Interest Rates, and the Move-Up Freeze

Eventually, inflation skyrocketed. I remember seeing a dozen eggs selling for $8.25 at ShopRite in Englewood—proof that the problem extended far beyond housing. The federal response was delayed, and by the time the Fed started raising rates, it was too late to prevent a sharp correction.

Mortgage rates rose rapidly—from 3% to 8.5%. That increase effectively locked many homeowners in place. Those who bought or refinanced during the pandemic now can’t afford to move up. Their existing low-rate mortgage makes upgrading financially impossible, even if their home has appreciated.

With both main sources of new listings—Boomers and move-up buyers—largely sidelined, inventory has reached extreme lows.

What Happens Next

Today, the Fed is expected to announce a ¼-point rate cut. Over the next two years, we should see gradual reductions, bringing mortgage rates now from their current 6.25–6.5% range closer to 6%.

When rates dip under 6%, move-up buyers will start reentering the market. We’ve already seen early signs: Bergen County began 2024 with just 601 homes for sale althugh that rose 10%; 2025 is again up about 10%. That’s progress, even if it doesn’t feel like much.

As rates continue to decline, inventory will slowly increase. That will attract more buyers, but it will also create a healthier, more balanced market overall.

Right now, homes are still selling, though not quite as frantically. Instead of 20 offers in a weekend, you might wait a week to secure a strong contract. Open houses are still busy—but the lines around the block are gone.

Looking Ahead

I expect 2026 to remain a seller’s market, though less intense than today. Inventory should rise by more than 10%, surprising many agents. Mortgage rates will likely settle between 5.25–5.5%—enough to bring more move-up buyers into play.

Home price appreciation will flatten. Market analyst Jeff Otteau forecasts around 2% growth and I agree. Buyers have become more selective and patient too. 

In my view, the spring and early summer of 2025 marked the peak of this market cycle. From here, we’re entering a period of normalization—a shift toward balance after years of extremes.  It will take 2 years to see a balanced market and it will hang there for another 2-3 years completing this cycle in roughly 5 years.  

Conclusion

Buying or selling a home should always happen when it’s the right time for you. Still, understanding where the market stands helps you make the best decision.

If you’re thinking about selling, keep in mind that each year going forward shifts the balance more toward buyers. Home values will continue to appreciate, but at a slower pace — often not enough to offset the cost of staying in your home another year.

If you’re a buyer, conditions are improving. It’s still a seller’s market, but you’ll have more choices and fewer bidding wars — typically just two to four competing offers instead of many. Mortgage rates are also expected to ease next year, and the extreme conditions of recent years — waiving appraisals, inspections, and contingencies — are largely behind us.


Sources:  NJMLS, NJR, NARRPR, Otteau