New Jersey Shore Market Cools as Buyer Competition Drops Sharply

Written by:

Steve Marcinuk

Date:

23 Mar 2026

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The New Jersey Shore real estate market is entering a new phase, with multiple-offer situations now rare after years of intense buyer competition. Steven Kozusko, a realtor with CENTURY 21 Thomson & Co. who serves Monmouth, Ocean, and Middlesex counties, says the difference is striking: “Four years ago, we would see 20 to 30 buyers per house. Now, when properly priced by an experienced agent, it’s more like two or three.” This significant drop in buyer activity has brought major changes to how deals are made and how both buyers and sellers approach the market.

A Less Competitive Market

With fewer buyers competing for each listing, deal strategies have changed. Kozusko recently helped first-time buyers win a property by using an escalation clause, a tactic that gave them an edge when other agents did not. The escalation clause allowed his clients to outbid competitors without revealing their maximum price, ultimately securing the home for $10,000 less than they were willing to pay.

The deal also involved waiving the appraisal contingency after arranging a pre-appraisal, showing that even with less competition, buyers need to act strategically to succeed. “You still need to be creative and proactive, even if you’re not up against dozens of other offers,” Kozusko notes.

Communication Issues

Despite the calmer pace, transactions are not immune to failure. Kozusko describes a recent deal that collapsed due to poor communication between attorneys. He points to dozens of emails exchanged and several incorrect statements made by the buyer’s attorney, which caused confusion and ultimately led to the deal falling apart. “Problems arise when people don’t pick up the phone to resolve issues directly,” he says.

Kozusko emphasizes that real estate transactions require cooperation among all parties. “Agents, buyers, and sellers need to function as a team,” he explains. When communication breaks down, deals are more likely to fail, regardless of market conditions.

Inventory Shortages

While buyer competition has waned, inventory remains tight. Mortgage rates recently dipped below 6% for the first time in months, drawing more buyers back into the market, but the number of available homes remains low. Kozusko points out that many homeowners with 3% mortgages are not selling. “People with low mortgage rates are either passing homes to their children, renting them out, or keeping them as second properties,” he says. This has kept inventory levels low, making it difficult for buyers to find options even as competition has eased.

New construction has not kept pace with demand, further limiting supply. Most new projects are over-55 communities or apartment complexes, offering little relief for younger buyers or families looking for traditional homes. “The majority of new builds are senior communities or rentals, not single-family homes,” Kozusko notes.

Unique Challenges

The Jersey Shore market faces its own set of challenges, especially for waterfront properties. Many buyers from New York and North Jersey are surprised by the high costs of shore homes. “People come down expecting reasonable prices on the water, but they’re often shocked at what homes actually cost,” Kozusko says.

Flood insurance is another key factor. Rising costs for both flood and homeowners’ insurance have made some buyers hesitant. Kozusko notes that many buyers in flood zones choose to pay cash so they can opt out of flood insurance, but this strategy is not feasible for everyone. “Insurance costs have increased significantly, and that’s changing how people approach waterfront purchases,” he explains.

Sellers Slow

Even as buyer competition has diminished, many sellers are still holding out for the kind of offers they saw during the market’s peak. Kozusko observes that sellers are slow to adapt, often expecting multiple strong offers even when those days have passed. “Sellers still feel they have all the power,” he says. “It’s been that way for five years, so it’s taking time for expectations to adjust.”

This lag creates opportunities for buyers who are ready to act. Kozusko encourages sellers to work with serious buyers rather than waiting for bidding wars that may not materialize. “If you get a good offer, take it seriously instead of holding out for more,” he advises.

Opportunities for Investors

For investors, the current market presents opportunities in renovation. With so many buyers stretched thin by down payments and closing costs, move-in-ready homes are in high demand. Investors with capital can buy properties in need of work, renovate them, and resell to buyers who cannot afford to do the work themselves. “Renovation is the biggest opportunity right now,” Kozusko says. “Most buyers don’t have the money to buy and fix up a home, so there’s a real gap in the market.”

Activity by Price Point

The most active part of the market is in lower-priced communities, where starter homes have seen significant price increases. Kozusko reports that in some areas, prices have jumped 20 to 40% over the past year as entry-level buyers compete for limited inventory.

At the higher end, properties in the $1 million to $2 million range are seeing more negotiation and longer times on market. Fewer buyers are competing for these homes, giving those in the market greater leverage. “There’s more room to negotiate on higher-priced homes because there just aren’t as many buyers at that level,” Kozusko explains.

Looking Ahead

Despite ongoing challenges, Kozusko is optimistic about the market’s future. He expects more movement as interest rates improve and as new senior housing projects give long-term homeowners an option to downsize, freeing up single-family homes. “I’m working with clients who have lived in their homes for 30 years and are now looking for senior housing,” he says. This trend could ease inventory constraints if enough older homeowners make the transition.

For renters, Kozusko urges a long-term view. He points out that paying $3,000 a month in rent adds up to $36,000 a year, or $360,000 over a decade, with no equity to show for it. “Buying a home builds equity over time, while renting just pays someone else’s mortgage,” he says.

Looking forward, the market’s next phase will depend on interest rates, new construction trends, and whether aging homeowners decide to sell. For now, the Jersey Shore reflects a national pattern: less frenzy, more negotiation, and a renewed focus on smart, strategic decision-making.