I have been looking for a house since 2007 in this area. The areas of first preferences were east brunswick, metuchen and north Edison. I called them Tier1. Tier2 areas were iselin, north brunswick, sayreville, south Brunswick. We were looking for a 3-4 beds 2/2.5 bath home not older than 1980 unless completely renovated. My definition of Tier1 is excellent to outstanding schools with good commuting options to the city. Tier 2 is good to excellent schools with good commuting options.
Here is my personal experience. In tier1 areas, houses that fit the bill ranged from 425 to 800 k. Most houses our realtor showed were close to 450 k. In tier 2 areas, the range was between 370 to 650k. Most houses our realtor showed us were a little short of 400k. I observed that houses that fit our specs, but below the above ranges, got sold so quickly that they were under contract on the day they were posted. At times, it felt as if they were some kind of insider deals. My initial budget was 300k in 2007 but looking at the reality, I raised it to as much as 450k. We got approved for 600k. After searching for years, I got a perfect house in April 10 for 350k. But that was not through a realtor. It was an fsbo and the seller was my friend.
In my opinion, the market is still hot and will remain like that in future for homes priced right in a good school district...at least in central jersey