This photo is unrelated to the article. [EPA]
This photo is unrelated to the article. [EPA]

Homebuyers in New Jersey are paying tens of thousands of dollars above asking price as a severe shortage of housing inventory squeezes the market.

According to the New York Post on Tuesday (local time), a home in Maplewood, New Jersey sold for 27 percent above its asking price, while a nearby property in South Orange changed hands for 33 percent over asking.

Buyers priced out of more central neighborhoods have been pushed into communities farther from the core — a pattern that mirrors how demand spilling out of Seoul flows into Gyeonggi Province.

The root cause is a supply of homes that falls far short of demand. In Maplewood, a town of 25,000 residents, only dozens of homes were actually on the market. A local real estate agent told the New York Post that the number of homes under contract was nearly double the number of available listings, calling it a "hypermarket." "I've been working in this area since 2009 and I can't remember a year when the market went down," the agent said.

"With limited inventory and the number of buyers far exceeding supply, it's only natural that the current market is rising," the agent said. "Buyers should expect some degree of bidding competition."

The agent added that there was no clear end in sight "unless you build a wall around Manhattan." New Jersey is the most densely populated state in the country, and new housing supply has been limited to subdividing existing sites rather than large-scale development. With interest rates unlikely to fall significantly, buyers have little choice but to keep competing for a dwindling pool of listings.

The same dynamic — supply failing to keep pace with demand and driving up prices — is playing out in South Korea as well.

Seoul apartment prices have been rising at a faster clip since the reinstatement of the capital gains tax surcharge on multi-home owners. As distressed listings have been absorbed, the combined inventory of Seoul apartments and officetels has fallen by more than 4,000 units over the past few days. Jeonse prices have also posted their biggest year-on-year increase in 11 years, stoking demand for outright purchases. The number of new apartment move-ins in Seoul is expected to drop sharply, from about 27,000 units this year to 17,000 next year.


dbsdn1110@heraldcorp.com