Bidding Wars, Thin Inventory, and a Tax Surprise: What's Really Happening in the Jersey Shore Housing Market

Written by:

Alejandra Rodriguez

Date:

09 Jun 2026

Share

Share via Facebook

Share via Linkedin

Share via X

Copy to clipboard

Walk into an open house on the Jersey Shore barrier island right now, and you might be surprised by what you find: other buyers, eager offers, and homes that go under contract before you’ve had a chance to schedule a second showing. This is not a slow market. But it is a complicated one, and knowing what’s moving, what’s not, and why matters.

The inventory picture here is stark. There simply are not enough homes for sale to meet demand, and several forces are keeping it that way.

What’s on the Market

Michelle Volpe, a real estate agent with Keller Williams Shore Properties who has spent over a decade working on the barrier island, describes a market sharply split by price.

Homes under one million dollars are the hottest segment by far. These properties routinely attract multiple offers, and buyers are going hundreds of thousands of dollars over asking price, particularly for waterfront homes. “Anything under a million sells very quickly,” Volpe says. If you are shopping in this range, expect competition and expect to move fast.

The mid-range – roughly one and a half to two and a half million dollars – is a different story. There isn’t much available, and buyers in that range are specific about what they want and unwilling to settle. Many are willing to wait for the right property rather than settle. “I have a buyer list that could be 100 people, and maybe 10 of them are going to find houses here,” Volpe says.

At the top of the market, luxury waterfront properties still command serious money. Still, sellers in that bracket are facing a new financial reality that is keeping some from listing at all.

The Tax Shift

New Jersey recently changed who pays the so-called millionaire’s tax on home sales over $1 million. It used to fall on the buyer. Now it’s the seller’s responsibility. Sellers are now absorbing the millionaire’s tax, real estate transfer tax, and, in many cases, the buyer’s agent commission. This combined closing-side burden has made some owners of higher-priced homes reluctant to list.

Some owners who might otherwise sell are choosing to stay put. That decision is squeezing an already tight inventory market even further and keeping options limited for buyers in the upper price tiers.

Why Inventory Stays Low

The tax shift is only part of the picture. For owners locked into rates of 1.5% to 3%, selling means financing their next purchase at 6% or 7% – a trade many are unwilling to make.

The physical reality of the barrier island compounds the problem: ocean on one side, bay on the other, no room to build outward. New construction is concentrated in specific areas – luxury condos and townhomes in Seaside Heights, larger homes replacing Sandy-era bungalows in Ortley Beach – but the overall supply of land remains fixed. The supply of land is finite, and that is not changing.

What’s Hot Right Now

Updated, move-in-ready homes are the fastest movers in any price range. Buyers here are not looking for projects. They want to show up and enjoy the shore, not spend their first summer managing contractors.

Waterfront properties – whether oceanfront or bayfront – are in a category of their own. Demand consistently outpaces supply, and bidding wars on these homes are common. “People are willing to pay hundreds of thousands of dollars over asking to get a waterfront property,” Volpe says.

Rental demand is strong and arriving earlier in the season than usual, rewarding owners who list before the new year. Volpe’s office booked the bulk of this year’s summer rentals between September and January – among the busiest rental seasons her office has recorded.

Very little stays on the market for long, and when it does, the reason is almost always the same. “The only reason a property would be sitting is it’s grossly overpriced,” Volpe says. In a market this tight, condition and location are rarely the issue. Pricing is.

Practical Takeaways

For buyers under one million: Get pre-approved before you start touring. Have your paperwork ready and be prepared to make a decision quickly. Waiting to think it over often means losing the house.

For buyers in the one- to two-and-a-half-million range: Work with someone who knows the inventory well and can alert you immediately when something new hits the market. In this segment, the right home may only come up once.

For sellers: The new tax obligations are real and worth calculating before you set your list price. Price correctly from day one. Overpricing in a market this competitive does not lead to negotiation – it leads to sitting.

For investors focused on rentals: Rental demand is strong and arriving earlier in the season than in prior years. If you are buying with rental income in mind, list before the new year to capture the earliest and most motivated renters.

About the Expert: Michelle Volpe is a sales associate with Keller Williams Shore Properties and has 25 years of real estate experience, including roughly 12 years focused on the New Jersey barrier island market. She and her husband also founded a construction company more than 40 years ago.

This article is intended for informational purposes only and does not constitute legal, financial, or investment advice. The views and opinions expressed herein reflect those of the individuals quoted and do not represent an endorsement of any company, product, or service mentioned. Readers should conduct their own due diligence and consult qualified professionals before making any investment decisions.