The Bergen County housing market showed continued signs of emerging into a strong seller’s market, with declining inventory holding sales back even while driving prices up dramatically.
Sales. Bergen single-family home sales were up about 1% from last year’s first quarter, the tenth straight quarter of year-on-year sales growth. For the rolling year, sales were up a little more robustly, rising 7%. What’s holding sales back right now is not a lack of demand, but a lack of inventory. If we start seeing more homes hit the market, we’ll see sales go up sharply.
Prices. Bergen prices spiked in the first quarter, rising almost 8% on average and 5% at the median. That’s probably not a sustainable level of price appreciation, but Bergen homeowners can certainly start to depend on the 1-2% increases that we are seeing on average and at the median for the last rolling year.
Inventory. Single-family inventory continued to tighten in the first quarter, with the months of inventory falling over 21% and now down to 4.4 months. We measure “months of inventory” by calculating the number of months it would take to sell all the available homes at the current rate of absorption, and generally consider anything below six months to signal a seller’s market that would normally drive prices up. With inventory now well below that six-month mark, and falling into the “seller’s market” territory, we will continue to see upward pressure on pricing.
Negotiability. Homes were selling more quickly and for closer to the asking price, which is what we would expect of an emerging seller’s market. The listing retention rate is now about 96%, and the days-on-market is well under three months. As inventory tightens and the market heats up, we would expect to see sellers continue to gain negotiating leverage.
Condos. Activity in the Bergen condo market was up sharply in the first quarter, with sales up almost 11% from last year. Prices were more mixed, with the average down over 4% but the median up almost 2%. With inventory now down below six months, though, we would expect to see more meaningful price appreciation this year.
Going forward, we expect Bergen County will enjoy a robust Spring market with both rising sales and prices. With inventory tightening, a relatively strong economy, near-historically-low interest rates, and prices still at attractive 2004 levels, we believe that sustained buyer demand will continue to drive meaningful price appreciation through the rest of 2017.