Jersey Shore's Housing Shortage Holds Prices Firm and Deals Take Longer

Written by:

Alejandra Rodriguez

Date:

17 Jun 2026

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The Jersey Shore real estate market has changed considerably since the pandemic years, but not in the ways many buyers were hoping for. Inventory remains historically tight, prices have held firm despite rising interest rates, and the path from listing to closing has grown longer and more complicated. For agents working this market every day, the numbers tell only part of the story.

Donna Wilson, Broker Sales Associate and Property Manager at The Forever Home Real Estate Group, has been working in the Little Egg Harbor area since 1992. That longevity gives her a useful baseline for understanding just how unusual current conditions really are.

A Market That Defies the Usual Rules

In most markets, rising interest rates eventually push prices down as buyer demand softens. Little Egg Harbor has not followed that pattern. The inventory shortage has effectively propped up prices even as borrowing costs have climbed. “Our inventory is so low that it won’t really allow the prices to come down that much,” Wilson says.

The numbers back that up. Before the pandemic, the local market carried over 300 active listings at any given time. During COVID, that figure dropped into the twenties. Today, the market sits at roughly 95 homes for sale, and Wilson says breaking through 100 listings has proven difficult to sustain.

Within that already limited pool, the options narrow quickly depending on what a buyer is looking for. Buyers focused on 55-plus communities have just 13 homes to choose from, with prices ranging from $319,000 to $609,000. Waterfront properties offer 41 options, ranging from a condo at $299,000 to a home priced at $1.8 million. For first-time buyers looking off the water, the least expensive available home is either a teardown at $220,000 or a poorly maintained condo at $264,000. “A decent home today is around $500,000,” Wilson says.

That shift in price floor is striking when set against recent history. Wilson’s average transaction price before COVID was around $140,000. Today, it sits closer to $450,000.

Sellers Are Adjusting, But Slowly

Price reductions are starting to appear, though they tend to be modest and strategic rather than sweeping. Wilson recently listed a property at $574,900 after advising the sellers to come in at $549,900. She gave them two weeks at their preferred price. They called before the deadline, she reduced the price, and had a contract in less than a week.

What has changed more noticeably is buyer behavior. Buyers who feel a property is overpriced are no longer making lowball offers to open negotiations. Instead, they simply wait. “If they think you’re too high, they’re just going to wait for you to continue to reduce it,” Wilson says.

That patience on the buyer side, combined with sellers who are reluctant to drop prices significantly, has extended the time it takes to move certain properties and created friction throughout the transaction process.

The Contingency Problem

One of the more persistent challenges in this market is the contingency sale, where a seller cannot close until they find their next home. With so little inventory available, that search can take far longer than anyone expects.

Wilson recently worked through a transaction that clearly illustrated the issue. She listed a home at $449,900 and received multiple offers above the asking price. The first accepted offer was cash with flexible closing terms, but it fell apart once attorneys got involved, and rigidity replaced flexibility. A second offer met a similar fate. The third offer – from buyers living with their parents and willing to waive the appraisal – finally held. The sellers went under contract in early April and are targeting a late June close.

The catch: the sellers had spent two years searching for their next home before the listing even went live. Inventory constraints were the primary reason. Wilson is now working with another buyer in a comparable situation and is already managing expectations accordingly. “You’re probably not going to find a house that checks every single box,” she tells buyers upfront. “What boxes are the most important? They really need to identify those in advance.”

Investors Are Holding, Not Selling

The inventory shortage is compounded by landlords who see no reason to sell. Most investors in the area are choosing to hold their properties rather than cash out, even with valuations significantly higher than their purchase prices. Wilson uses her own portfolio as an example. She purchased a townhouse in 2018 for $75,000, which she estimates could sell for around $225,000 today. She carries a $40,000 mortgage, pays $145 per month in HOA fees, and collects $1,650 per month in rent.

“If I sell that townhouse, I make my tenants homeless, and I wouldn’t do it,” she says. The financial logic of holding also supports that decision.

She cites the previous owners of that property as a case study in long-term rental returns. They owned it for years, collecting rent ranging from $800 to $950 per month, and ultimately generated an estimated $369,000 in rental income before selling it to Wilson for $75,000.

Rents across the market have roughly doubled since before the pandemic, which reinforces the case for holding. A comparable unit in the same building was recently listed for $2,600 per month.

Wilson is also seeing younger investors enter the market. One client, 22 years old, is already on his second investment property. Her advice to anyone considering the move is straightforward: “If you can afford the property without a tenant, do it because tenants have problems. If they didn’t have problems, they wouldn’t be tenants.”

A Long-Term Perspective on a Tight Market

Wilson’s approach reflects the same long-term thinking she applies to investment advice. Her property management work, which currently covers between 25 and 30 homes, grew out of her earliest days in the industry. She has worked with tenants for a decade or more before they were in a position to buy. One client relationship stretched nearly 20 years before reaching that point.

That continuity shapes how she handles difficult transactions. When a deal is not right, she tells clients to step back, even when it means walking away from a commission. “I didn’t earn it, you didn’t close,” she says.

Looking ahead, the Little Egg Harbor market is unlikely to see meaningful relief on the inventory side anytime soon. Sellers who locked in low mortgage rates have little financial incentive to move. Buyers are growing more patient and selective. And the gap between what people want and what is actually available continues to drive longer timelines and more complicated deals. For agents and investors working this market, the fundamentals that made coastal New Jersey attractive have not changed – but the math of getting into or out of a property requires more patience and planning than it did just a few years ago.

About the Expert: Donna Wilson is a Broker Sales Associate and Property Manager at The Forever Home Real Estate Group, serving the Little Egg Harbor area of the Jersey Shore since 1992. She also manages a portfolio of 25-30 rental properties in the area.

This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.