Introduction

Welcome to the Ten Hoeve Realty Group blog! I’m DJ Ten Hoeve, founder of Ten Hoeve Realty Group, specializing in NJ luxury real estate, with a focus on Monmouth County real estate, Rumson real estate, and Colts Neck real estate. With 2025 on the horizon, buyers, sellers, and investors are eager to understand where the real estate market is heading. Redfin recently released 10 key real estate predictions, but not all apply to NJ—and some I outright disagree with. In this blog, I break down each of Redfin’s 2025 real estate predictions, share my expert opinion, and offer actionable advice on how to navigate NJ real estate in the coming year.

1. Home Prices Will Rise by 4%

Redfin’s Prdiction:

Redfin forecasts that home prices will increase by 4% in 2025, aligning with long-term appreciation trends seen in the housing market over the past several decades.

My Opinion:

✔️ I agree, but Monmouth County real estate and NJ luxury real estate markets will likely outperform the national average, with a 5-6% appreciation in towns like Rumson and Colts Neck.

Why?

• Limited Inventory: The housing shortage is not just a national issue—it’s even more pronounced in high-end NJ markets where new construction is limited. Inventory remains extremely tight, and sellers who secured low mortgage rates over the past decade are not eager to list their homes, further restricting supply.

• Strong Demand from NYC Buyers: Monmouth County, specifically Rumson and Colts Neck, has seen a surge in buyers migrating from New York City looking for larger properties, suburban luxury, and proximity to the shore. This demand is not slowing down.

• Affluent Buyers Are Less Rate-Sensitive: In NJ’s high-end real estate market, many buyers pay cash or put down significant down payments, making them less impacted by mortgage rate fluctuations.

• Economic Stability: The overall economy remains strong despite interest rate hikes, which has not discouraged serious buyers from making purchases in the luxury sector.

Advice for Buyers & Sellers:

Buyers:

• Don’t wait for prices to drop—they won’t. While rates may fluctuate, housing appreciation in NJ remains strong, and prices will likely increase more significantly in 2026.

• Look for off-market opportunities. With inventory tight, working with an agent who has access to exclusive listings can give you a competitive edge.

• Be prepared to act quickly. Well-priced homes in Monmouth County will continue to attract multiple offers.

Sellers:

• Capitalize on strong pricing. Listing early in 2025 will allow you to take advantage of current demand.

• Stage and price your home competitively. Even in a seller’s market, presentation matters. The best homes still get the best offers.

• Market strategically to NYC buyers. If your home offers commuter convenience, luxury amenities, or waterfront views, highlight these features prominently.

• Read our Seller's Guide.

2. Mortgage Rates Will Stay Around 7%

Redfin’s Prediction:

Mortgage rates will hover near 7% throughout 2025, maintaining the high rates seen in 2024.

My Opinion:

✔️ Partially agree. While rates will start high, I expect them to gradually decline to around 6-6.5% by year-end, offering some relief to buyers.

Why?

• Inflation Remains a Concern: The Federal Reserve is unlikely to slash rates aggressively, as inflation control remains a top priority.

• Treasury Bond Yields Are Key: Mortgage rates follow Treasury bond yields more than the Fed's rate cuts. If investors shift money into bonds, rates could drop.

• Election Uncertainty is Over: Many buyers and investors sat out in 2024 due to election-year concerns. With clarity, the market may see renewed buyer activity.

Impact on NJ Luxury Real Estate:

• Luxury buyers remain unfazed. High-net-worth individuals in Colts Neck and Rumson often buy in cash or with substantial down payments, making them less rate-sensitive.

• Rate reductions won’t dramatically impact high-end markets. A move from 7% to 6% won’t suddenly create affordability in the luxury home market, but it may encourage more mid-tier homebuyers to enter the market.

Advice for Buyers & Sellers:

Buyers:

• Read our Buyer's Guide.

• Get pre-approved and be ready to act. Even a slight rate drop will bring more buyers into the market.

• Don’t wait for rates to hit 5% (they likely won’t in 2025). Buying now and refinancing later is a smart strategy.

Sellers:

• Price your home competitively. Buyers will be more selective, so pricing strategically is key.

• Be patient with offers. While demand remains high, buyers may take longer to commit due to financing concerns.

3. More Home Sales in 2025

Redfin’s Prediction:

Redfin predicts that home sales will increase in 2025 compared to 2024, as buyers who delayed purchases in previous years re-enter the market.

My Opinion:

✔️ I agree, but the increase in sales will be moderate rather than a massive surge. Monmouth County real estate, especially in luxury markets like Rumson and Colts Neck, will see higher-than-average growth due to pent-up demand.

Why?

• 2024 Was a Slow Year: High mortgage rates, economic uncertainty, and limited inventory suppressed transaction volume. Many buyers who sat out in 2024 will return to the market in 2025.

• Lower Rates Will Attract More Buyers: Even a slight dip in interest rates (to the low 6% range) will create more affordability and encourage hesitant buyers to make a move.

• Sellers Are More Willing to List: Many homeowners held off selling in 2024 due to high interest rates. As they adjust to market conditions and buyer activity increases, more inventory will hit the market.

• Luxury Buyers Are Back: Many high-net-worth buyers who paused purchases in 2024 due to stock market fluctuations and political uncertainty will return in 2025.

Advice for Buyers & Sellers:

Buyers:

• Be ready to act quickly. More buyers entering the market means more competition, especially in desirable locations like Colts Neck and Rumson.

• Look for early 2025 deals. If rates are still high at the beginning of the year, motivated sellers may be more open to negotiation.

• Work with an experienced agent. Inventory will remain tight, so having an agent with local connections can help you find off-market properties.

Sellers:

• List sooner rather than later. Early 2025 could present a great opportunity before competition among sellers increases.

• Stage and price competitively. Even in a strong market, homes that show well and are priced right sell faster and for more money.

• Prepare for multiple offers in certain price ranges. Properties under $1 million in Monmouth County will continue to see high demand.

4. 2025 Will Be a Renters’ Market

Redfin’s Prediction:

Redfin predicts that rental inventory will increase in 2025, making it more favorable for renters and shifting power away from landlords.

My Opinion:

✔️ I agree with this prediction on a national level, but in Monmouth County, it will be a mixed bag. While some rental markets will see increased inventory, desirable areas like Colts Neck and Rumson will remain competitive.

Why?

• New Rental Construction: Many rental developments started in 2020-2022 are now coming online, increasing supply and providing more options for tenants.

• Economic Uncertainty: Some potential buyers will continue renting, keeping demand steady in high-end rental markets.

• Luxury Rental Market Remains Tight: In areas like Rumson and Colts Neck, rental supply is limited, and demand remains high for well-located, high-end properties.

Advice for Renters & Investors:

Renters:

• Negotiate lease terms. With more rental options available, landlords may be more flexible on price and concessions.

• Consider a long-term lease. If you’re planning to stay for a while, lock in a favorable rate before the market shifts again.

Investors:

• Luxury rentals will remain in demand. If you own high-end rental properties, pricing should remain strong in prime NJ markets.

• Expand your portfolio. If rental prices dip temporarily, consider acquiring additional properties at a discount.

5. Fewer Construction Regulations Will Boost Home Building

Redfin’s Prediction:

Redfin predicts that fewer regulations will lead to an increase in new home construction, helping to alleviate the housing shortage.

My Opinion:

❌ I disagree. While deregulation may help in some states, New Jersey’s housing market is constrained by factors beyond just regulations, such as land availability and high construction costs.

Why?

• Limited Land in Monmouth County: There simply isn’t much open land left for large-scale new developments in high-demand areas like Rumson and Colts Neck.

• High Construction Costs: Labor and material costs remain elevated, making new construction less affordable.

• Developers Focus on Luxury: When new homes are built, they’re often high-end properties that don’t alleviate overall housing supply shortages.

Advice for Buyers & Sellers:

Buyers:

• Don’t rely on new construction. If you’re waiting for a wave of new homes, it’s unlikely to happen in Monmouth County.

• Consider renovated older homes. Well-updated properties often offer better value than new builds.

Sellers:

• New construction isn’t a major threat. Your home won’t be competing with a flood of new builds, so demand should remain strong.

6. Wealthy Buyers Will Pay Less Due to Lower Commissions

Redfin’s Prediction:

Redfin suggests that recent changes in commission structures will lower transaction costs for luxury buyers.

My Opinion:

❌ I disagree. While commission structures may change, wealthy buyers in NJ’s luxury market are unlikely to see significant savings.

Why?

• Sellers Still Need Strong Marketing. To attract high-end buyers, sellers will continue offering competitive commission splits to agents who bring buyers.

• Luxury Buyers Rely on Expertise. Wealthy clients value expert guidance and will continue working with top-tier agents.

• Negotiation Will Vary by Property. Some high-end buyers may negotiate commissions, but this won’t become a widespread trend.

Advice for Luxury Buyers & Sellers:

Buyers:

• Expect to pay for premium service. The best properties are still being handled by top agents who provide expert-level negotiation and marketing.

• Factor commission costs into your overall budget.

Sellers:

• Don’t cut commissions if you want top dollar. Offering an attractive commission to buyers’ agents ensures your property gets maximum exposure.

7. Real Estate Market Will Consolidate

Redfin’s Prediction:

Redfin predicts that the real estate industry will consolidate further, with smaller brokerages and independent agents struggling to compete against large teams and technology-driven firms.

My Opinion:

✔️ I agree. The traditional real estate brokerage model is changing, and we’re seeing a clear shift toward large, well-organized teams providing specialized services and better marketing.

Why?

• Teams Offer More Value: Clients now expect full-service experiences, including digital marketing, staging, and data-driven pricing strategies. Individual agents who can’t compete with this level of service are at a disadvantage.

• Technology Disrupts the Industry: Advanced CRM tools, AI-powered market analysis, and digital platforms are making it harder for smaller brokerages to keep up with well-funded real estate teams.

• Fewer Transactions, More Competition: With fewer homes changing hands over the past few years, only the strongest and most innovative agents will thrive.

Advice for Buyers & Sellers:

Buyers:

• Work with an established team. A dedicated group of professionals can offer deeper market insights, better negotiation strategies, and access to exclusive listings.

• Leverage tech-driven search tools. Ensure your agent uses advanced tools to help you find and evaluate properties efficiently.

Sellers:

• Choose a team with strong marketing expertise. Exposure matters, and teams with professional staging, photography, and targeted advertising will get your home sold faster.

• Ask about data-driven pricing. Ensure your agent uses advanced market analysis to position your home competitively.

8. Climate Risks Will Impact Home Prices

Redfin’s Prediction:

Redfin expects climate risks, particularly in coastal states, to be factored into home prices, with buyers increasingly considering flood zones and extreme weather risks when making purchasing decisions.

My Opinion:

✔️ I agree. We’re already seeing climate-related concerns impact home values, particularly in coastal areas like Monmouth County, where flood insurance costs are rising.

Why?

• Flood Insurance Costs Are Rising: Many NJ homeowners have seen flood insurance premiums double in recent years, making homeownership more expensive in flood-prone areas.

• Buyers Are More Informed: Websites like FEMA’s flood maps and insurance cost calculators are allowing buyers to factor climate risks into their home-buying decisions.

• Shifts in Market Preferences: Some buyers are opting for homes further inland or on higher ground to avoid flood risk and long-term insurance expenses.

Advice for Buyers & Sellers:

Buyers:

• Check flood zone maps before purchasing. Be aware of potential risks and associated insurance costs.

• Consider elevation and drainage. Properties with strong flood mitigation features (such as raised foundations and proper drainage) may be better long-term investments.

• Download and read our Beach House Buyer Guide.

Sellers:

• Highlight climate-resistant features. If your home is in a flood zone but has protections like sump pumps or elevated construction, emphasize these features in marketing.

• Price competitively. Homes in high-risk areas may need slight price adjustments to remain attractive to buyers who are factoring in additional insurance costs.

9. Blue Cities Will Reverse Urban Flight

Redfin’s Prediction:

Redfin predicts that cities that experienced significant population loss due to remote work and affordability concerns will stabilize as demand returns for urban living.

My Opinion:

✔️ I agree, but suburban demand in Monmouth County, Rumson, and Colts Neck will remain strong, especially among families and luxury buyers.

Why?

• Return-to-Office Policies: Many employers are requiring at least part-time office attendance, driving some workers back into urban centers.

• Infrastructure & Development: Cities like New York are investing in public transportation, entertainment, and housing projects to attract residents.

• Affordability Concerns Persist: While cities may regain some population, NJ suburbs remain attractive due to space, lifestyle, and strong school districts.

Advice for Buyers & Sellers:

Buyers:

• Consider long-term work flexibility. If remote work remains an option, suburban properties may still provide better value.

• Look for deals in urban areas. Some city properties are still priced below pre-pandemic levels, offering potential investment opportunities.

Sellers:

• Position homes based on lifestyle benefits. Highlight proximity to transit for those who need occasional city access.

• Luxury buyers will still prefer space. Large homes with home offices and outdoor amenities will remain desirable.

10. Gen Z Will Rewrite the American Dream

Redfin’s Prediction:

Redfin predicts that Gen Z homebuyers will change traditional real estate trends, prioritizing investments over primary residences and embracing alternative ownership models.

My Opinion:

✔️ I agree. Younger buyers are approaching real estate with an investor mindset, seeking rental income and house-hacking opportunities rather than committing to a long-term primary residence.

Why?

• Gen Z Prefers Multifamily Homes: Many younger buyers are purchasing duplexes or triplexes, living in one unit while renting out the others to offset mortgage costs.

• Rise of Fractional Ownership: New home-buying models, including fractional ownership and co-buying, allow young buyers to enter the market with lower upfront costs.

• Focus on ROI Over Forever Homes: Unlike previous generations, Gen Z is less concerned with buying a "forever home" and more focused on building wealth through real estate.

Advice for Buyers & Sellers:

Buyers:

• Consider house-hacking. Buying a multifamily home can help cover mortgage expenses while allowing you to own property.

• Look for alternative financing. FHA loans and down payment assistance programs can help first-time buyers get into the market.

• Think long-term investment. Instead of waiting for the "perfect" home, start small and build equity over time.

Sellers:

• Market to younger buyers with investment potential. If your home includes a rentable unit or guesthouse, highlight this in your listing.

• Consider creative financing options. Seller financing or assumable mortgages may make properties more attractive to Gen Z buyers.

Final Thoughts

The 2025 NJ real estate market is shaping up to be stronger than 2024, particularly in luxury markets like Colts Neck, Rumson, and Monmouth County. With rising home values, shifting mortgage rates, and evolving buyer trends, working with an experienced real estate team will be more important than ever.

📞 Contact the Ten Hoeve Realty Group today to make the most of NJ real estate in 2025!

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