Newlyweds Joseph and Cheryl Petta just wanted to buy their first home in North Jersey.

It was a disheartening year and a half of house-hunting. Rockaway, West Milford, Midland Park, Wharton. They looked everywhere.

"We've looked close to 50, maybe more houses, and we made a couple offers on a couple houses, and we've gotten blown out of the water every time," said Joseph Petta. "Not even considered."

The Pettas budget is in the $400,000 range, and with uncertainty about how a recession could affect housing prices, they're hesitant to go too far beyond that.

They may get shut out. Peruse Zillow, and you’d be hard-pressed to find a starter home listed below $500,000.

$500K is the new $300K

It’s the new trend: $500,000 is the new $300,000 — what was once the typical asking price for a starter home before the COVID-19 pandemic.

“This is definitely happening over the years, and obviously with Covid, back in 2020, when prices just skyrocketed,” said Andrew Gangi, a Woodcliff Lake realtor that serves the Pascack Valley region. “It just raised the prices of everything.”

Added Steven Pescatore, a Wayne realtor, “it’s a lot harder for young people to get a starter home. Even if they’re looking for a condo, there’s not really a lot available. It used to be you get a nice condo for $150,000, $200,000, now it’s $350,000, $400,000.”

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Older people are staying put

One factor squeezing the supply is that older residents are reluctant to part ways with their homes because the cost of rent of 55-plus communities bars them out, said Morris Plains realtor Tanvini Gogri.

“If they go and rent somewhere, they have a monthly obligation of $2,500, $3,000. They don’t want that,” she said.

And inflation and interest rates have worsened the problem, said Pescatore.

“Younger people are holding onto their homes because it’s hard for them to upgrade, because if they sell their house, they’re going to have to put more money into buying a new house,” Pescatore said.

As of January, the median price for a home sold in Bergen County was $540,000, according to Realtor.com, versus $575,000 in Morris County, $510,000 in Essex County, versus $450,000 in Passaic County, and $325,000 in Sussex County.

Thirty-year mortgage rates were up 2.88% from a year ago, according to Freddie Mac. 

The effect?

In many cases, first-time homebuyers “probably have to wait longer, save up money for a longer period of time,” Gangi said.

Young people are leaving

Between 2015 and 2019, the 25 to 44 age group shrunk nearly 1.2% in New Jersey, according to a May 2022 study from Princeton University.

People in this age group are simply leaving the state, said Tim Evans, research director for the progressive think tank New Jersey Future.

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It grew the most in Washington — nearly 11% — during those same four years, followed by Colorado and Texas.

“You have too many people competing for a limited supply, the prices get bid up and price a lot of people out, so people either continue living with their parents or they look elsewhere for housing they can afford,” said Evans, who advised the study.

Long-time Bergen County resident Amanda Carpenter bought her starter home in Rochelle Park for $520,000 — it was listed for $480,000.

"I was putting in offer $50,000, $60,000, $70,000 over asking and I wasn't even in the top 10 — and that's when I started to have to up my budget a little bit," she said.

"I grew up in Paramus. There's some towns like Franklin Lakes, Wyckoff, like those towns have always been more expensive. But towns like Hackensack, Rochelle Park, even Paramus, those used to be starter towns with starter homes," she continued. "I feel like there are no more starter homes."

This article originally appeared on NorthJersey.com: North Jersey real estate: How much is a starter home?