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First Quarter 2016 Real Estate Market Report: Sussex Market Overview
The Sussex County housing market surged again in the first quarter of 2016, with a dramatic spike in sales that continued a long.term trend of markedly higher transaction rates. Nevertheless, we are still not seeing these sustained levels of buyer demand have their expected impact on pricing, which was down yet again.
Sales. Sussex sales were up sharply in the first quarter, rising over 32% from last year and finishing the year up almost 23%. This continued a trend that we’ve been watching for the past four years, with year-on-year sales up almost every quarter since 2012. Indeed, Essex closings are now reaching levels that we have not seen since the tail end of the last seller’s market, with sales now up almost 80% from their 2011 bottom. So the market is in much stronger shape than it has been at any time since the 2008-09 market correction, with sustained levels of buyer demand.
Prices. This spike in sales, though, has not yet had an impact on pricing, which has deteriorated even while buyer demand increased. Average and median sales prices were down again in the first quarter, falling almost 9% on average and almost 2% at the median. Moreover, prices have been trending downward now for several years, in defiance of what we would expect from normal economic behavior. Generally, it takes time for increases in demand to drive pricing changes, so we believe this will turn around if buyer demand remains at its current levels.
Inventory. The “months of inventory” indicator measures how long it would take to sell out the existing inventory of homes at the current rate of home sales. In the industry, we generally consider anything below six months as a signal for a seller’s market, where tight inventory leads to multiple-offer situations, bidding wars, and ultimately appreciating prices. Sussex inventory remains well above that threshold, at 9.6 months, but that’s down almost 17% from last year, so it’s generally tightening.
Negotiability. The negotiability indicators – the amount of time sold homes were on the market, and the rate at which sellers were able to retain their full asking price – suggested the sellers might be gaining a little bit of negotiating leverage. The days on market fell over 5%, indicating that homes were selling more quickly. And the listing price retention rate was up over a full point, indicating that homes are selling for closer to the asking price.
Going forward, we do expect better things for the Sussex market. We believe that buyer demand will stay strong through 2016, especially with a relatively strong economy, homes priced at attractive levels, and near historically low interest rates. And if buyer demand stays at its current levels, we expect that Sussex will at least see prices stabilize during the year, with a chance at meaningful price appreciation by 2017.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Essex Market Overview
The Essex County housing market started the year strong, with a surge of sales activity. But even with demand up, prices went down sharply, indicating that the county has not yet developed into a “seller’s market.”
Sales. Essex County sales were up sharply in the first quarter, rising over 13% for the quarter, marking the fifth straight quarter of year on year sales growth. The long.term trend is also encouraging, with sales up over 10% for the rolling.year and now regularly clearing almost 5,000 yearlong sales, which is comparable to what we saw at the tail end of the last seller’s market.
Prices. This spike in sales activity did not, though, have its expected impact on pricing. Prices were down sharply, dropping over 8% in the average and 4% at the median. And after some modest price appreciation in 2015, the long.term trend turned downward, with the weak first quarter driving the rolling year average and median both down almost 1%. Why would prices go down as sales go up? One explanation could be that the market was relatively stronger in the lower priced entry level markets, which would change the mix of the properties sold and drive down the overall pricing. We will keep our eye on this dynamic for the next Report.
Inventory. The “months of inventory” indicator measures how long it would take to sell out the existing inventory of homes at the current rate of home sales. In the industry, we generally consider anything below six months as a signal for a seller’s market, where tight inventory leads to multiple-offer situations, bidding wars, and ultimately appreciating prices. Essex has already crossed that threshold, which is what makes the decline in pricing so surprising. Given how tight inventory is, we do expect to see some meaningful appreciation in the spring market.
Negotiability. The negotiability indicators – the amount of time sold homes were on the market, and the rate at which sellers were able to retain their full asking price – suggested the sellers might be gaining a little bit of negotiating leverage. The days on market fell almost 5%, indicating that homes were selling more quickly. And the listing price retention rate was up sharply, cresting 98%, indicating that homes are selling for closer to the asking price.
Going forward, we expect that Essex County’s sales activity will eventually have a meaningful impact on pricing. With homes still at historically affordable prices, interest rates low, and a generally improving economy, we believe that buyer demand will strengthen and drive more meaningful price appreciation in a robust spring market and throughout 2016.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Morris Market Overview
The Morris County housing market recovered from some late 2015 doldrums to post a robust start to 2016, with a spike in sales. Even with this surge in activity, though, pricing was disappointing.
Sales. Morris County sales were up sharply in the first quarter, rising almost 17% for the quarter, marking the sixth straight quarter of year-on-year sales growth. The long-term trend is also encouraging, with sales up over 9% for the rolling year and now regularly clearing over 5,500 yearlong sales, which is comparable to what we saw at the tail end of the last seller’s market.
Prices. This spike in sales activity did not, though, have its expected impact on pricing. Prices were down sharply, dropping over 5% in both the average and the median. And after some meaningful price appreciation in 2015, the long-term trend turned downward, with the weak first quarter driving the rolling year average and median price into negative territory. Why would prices go down as sales go up? One explanation could be that the market was relatively stronger in the lower priced entry-level markets, which would change the mix of the properties sold and drive down the overall pricing. We will keep our eye on this dynamic for the next Report.
Inventory. The “months of inventory” indicator measures how long it would take to sell out the existing inventory of homes at the current rate of home sales. In the industry, we generally consider anything below six months as a signal for a seller’s market, where tight inventory leads to multiple offer situations, bidding wars, and ultimately appreciating prices. Morris has already crossed that threshold, which is what makes the decline in pricing so surprising. Given how tight inventory is, we do expect to see some meaningful appreciation in the spring market.
Negotiability. The negotiability indicators–the amount of time sold homes were on the market, and the rate at which sellers were able to retain their full asking price–tracked the decline in the pricing. Neither indicator showed the expected result: the days on market went up a tick, and the listing retention rate went down. In other words, sellers lost a little bit of negotiating leverage, a dynamic that doesn’t make any sense in a quarter where sales were up 17%. We think this is a short-term blip, and expect homes to sell more quickly and for closer to asking price in the spring market.
Going forward, we expect that Morris County’s sales activity will eventually have a meaningful impact on pricing. With homes still at historically affordable prices, interest rates low, and a generally improving economy, we believe that buyer demand will strengthen and drive more meaningful price appreciation in a robust spring market and throughout 2016.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Passaic Market Overview
The Passaic County housing market started off 2016 with an increase in sales coupled with mixed results in pricing. Most indicators, though, signal that Passaic continues to develop as a classic “seller’s market” that will likely drive sales and prices up through the rest of the year.
Sales. Passaic sales were up again in the first quarter of 2016, rising over 8% from last year and finishing the rolling year up almost 11%. Indeed, we’ve now seen sustained increases in buyer demand for almost five years, with quarterly sales up in 18 out of the last 20 quarters. As a result, the almost 3,000 sales over the past rolling year approaches the kinds of sales totals we last saw during the last seller’s market. Demand in Passaic shows no signs of abating.
Prices. Prices were mixed, with the average price falling while the median price was up a tick. We would normally expect sustained increases in buyer demand to have a stronger impact on driving prices up, but Passaic pricing has been bouncing around a bit over the past few years. Looking at the longer term trend, the rolling year prices are up more convincingly, with the average rising almost 2% and the median up over 3%. Those are sustainable levels of price appreciation, so we expect that to continue through 2016.
Inventory. The “months of inventory” indicator measures how long it would take to sell out the existing inventory of homes at the current rate of home sales. In the industry, we generally consider anything below six months as a signal for a seller’s market, where tight inventory leads to multiple-offer situations, bidding wars, and ultimately appreciating prices. Passaic County is approaching that level, and inventory is clearly tightening quarter by quarter.
Negotiability. The negotiability indicators both showed that sellers are gaining leverage with buyers. The days on market were down slightly for the quarter, signaling that homes were selling a little more quickly. And the listing retention rate was also up, indicating that sellers were getting closer to their asking price. Together, they show that sellers are slowly gaining some bargaining power with buyers.
Going forward, we believe that Passaic’s fundamentals are sound, with homes priced at relatively attractive levels, rates near historic lows, and a stable economy. Accordingly, we expect that Passaic County will continue to flower into a fully realized seller’s market in 2016, marked by sustainable increases in both sales and prices.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Bergen Market Overview
The Bergen County housing market started 2016 off strong, with sales way up and clear indications of increasing buyer demand.
Sales. Bergen single-family home sales started the year with a flourish, rising over 19% for the quarter and marking the sixth straight quarter of year-on-year sales increases. Indeed, we are starting to see transactions at “seller market” levels, with over 6,000 sales over the rolling year, which is comparable to the sales totals during the last seller’s market.
Prices. Although prices were basically flat for the quarter, we are continuing to see consistent, if modest, long-term price appreciation. Over the past rolling year, prices have been up almost 2% on average and over 4% at the median, which is the type of long term appreciation that is generally sustainable. We’re still seeing pricing at non-inflation adjusted 2004 levels, about 15% below the height of the market in 2006, but we’re moving in the right direction.
Inventory. The “months of inventory” indicator measures how long it would take to sell out the existing inventory of homes at the current rate of home sales. In the industry, we generally consider anything below six months as a signal for a seller’s market, where tight inventory leads to multiple-offer situations, bidding wars, and ultimately appreciating prices. So the fact that Bergen single-family homes crossed over that threshold in this quarter is a clear indication that we’re looking at a burgeoning seller’s market in the county.
Negotiability. The negotiability indicators showed that sellers might be gaining a bit of leverage with buyers. In the quarter, the average days on market were flat, but they’re now down 6.5% for the rolling year. So homes are getting into contract more quickly. Similarly, sellers were becoming slightly more demanding on pricing, with the listing retention rate closing on 96%.
Condos & Coops. The Bergen condo market was up sharply, with both sales and prices surging. Condo sales were up almost 26% for the quarter, finishing the rolling year up over 11%. But the real story was prices, with both the average and median price spiking over 7% for the quarter and now in positive territory for the year. Those types of price increases are probably not sustainable, but we do believe that Bergen condos will experience meaningful price appreciation through the end of the year.
Going forward, we remain confident that Bergen County is slowly moving into a strong seller’s market. Buyer demand is strong, which is driving up sales and starting to have a long-term impact on pricing. With pricing close to 2004 levels, rates near historic lows, and the economy relatively stable, we expect demand to stay strong through a robust spring market and throughout 2016.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Northern New Jersey Market Overview
The Northern New Jersey housing market got off to a strong start in 2016, with sales up again throughout the region. But this sustained surge in buyer demand is not yet having any real impact on pricing, which was flat or down in each of the counties.
Sales were up over 10% for the region, rising in every county in the Report. Closings have now been trending up for about five years, ever since the market stabilized after the correction precipitated by the financial crisis of 2008-09. Although we are not yet at transactional levels that we saw during the last seller’s market of the mid 2000’s, sales are up about 40% from the bottom of the market and are moving in a positive direction.
We are also seeing inventory continue to tighten. The industry measures the impact of inventory by calculating the “months of inventory” remaining on the market: i.e., the number of homes for sale divided by the average monthly transactions. So, for example, if we have 1,000 homes for sale and we close about 100 sales a month, we say that’s about 10 months of inventory. According to industry standards, six months worth of inventory signals a balanced market: any less, and we are likely to see too many buyers chasing too few homes, which will tend to lead to multiple-offer situations, then bidding wars, and ultimately higher prices. Well, right now, we’re starting to see inventory tighten across the region. Bergen, Morris, and Essex are all below the 6-month threshold, and Passaic is right on the cusp. Only Sussex is trailing, but even inventory there is tightening and has dropped from 11.5 months to 9.6 months in the past year.
Even with sales up and inventory down, though, average prices dropped throughout the region. In our last Report, we said that we were seeing the first signs of “green shoots” of price appreciation. Well, in the first quarter, those green shoots withered away. Prices were down throughout the region, in some cases sharply. This was surprising, given that all the other indicators suggest that we should be seeing meaningful price appreciation at this point. It might be that the market is simply stronger in the lower end than the middle or higher end, which is changing the mix of properties sold and skewing the average. Or it could just be a short term blip in the data during the slowest time of the year. Either way, we will keep our eye on it for the next Report, which will cover the spring market and give us a better read on things.
Going forward, we still believe that we are heading for a seller’s market. Sales have now been increasing for almost five years, which has brought inventory to the seller’s market threshold. Basic economics tells us that high demand and declining supply is bound to drive up pricing at some point. The economic fundamentals are all good: homes are priced at 2004 levels (without even adjusting for inflation), interest rates are still near historic lows, and the regional economy is stable. Accordingly, we expect that the price declines in the first quarter were an anomaly, and that the region will experience rising sales and prices through a robust spring market and throughout 2016.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016: Real Estate Market Report: Dutchess Market Overview
The Dutchess County housing market started the year with a massive spike in sales activity, which had only a modest impact on pricing.
Sales. Dutchess County single.family home sales surged again in the first quarter, with transactions up a whopping 43% from last year. This marked the sixth quarter in a row with year on year sales increases, leading to a rolling year where sales were up almost 30%. With 2,300 sales over the rolling year, Dutchess is now closing homes at a rate that rivals what we saw during the last seller’s market.
Prices. In our last Report, we noted that we were starting to see the first “green shoots” of price appreciation in Dutchess. That continued in the first quarter, with the average and median price both up a tick. The rolling year numbers are still not positive, but we think it’s only a matter of time. With these types of sustained increases in sales activity, we are bound to see an impact on pricing this year.
Inventory. We measure inventory by looking at the “months of inventory” that are available, given the current absorption rate of properties on the market. Generally, the industry regards six months of inventory as a demarcation for a seller’s market. In Dutchess, we are nowhere near that, with inventory still above 14 months. But the market is definitely tightening, with the months of inventory falling over 25% in the past year. As inventory tightens, we would expect prices to start going up.
Negotiability. The negotiability indicators show that Dutchess sellers might be starting to get some leverage. Homes were selling for a little closer to the asking price, with the listing retention rate up above 95% for the first time since the last seller’s market. And the days on market fell again, now down below six months, indicating that homes are selling a little more quickly. If homes are selling more quickly, and for closer to the asking price, that means sellers are gaining a bargaining position with buyers.
Condominiums. The condo market was also robust, with sales up over 28% compared to the fourth quarter of last year, and up over 22% for the year. Pricing was disappointing, though, with the average and median down for both the quarter and the year. Inventory continues to tighten, though, which could stabilize pricing in 2016.
Going forward, we believe that if Dutchess continues to see sustained increases in sale activity, we are bound to see meaningful price appreciation by the end of the year. With a stable economy, low-interest rates, and homes still priced at appealing 2004 levels (without even controlling for inflation), we believe that Dutchess is poised for a strong 2016.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Putnam Market Overview
Putnam County sales and prices both spiked in the first quarter of 2016, with transactions again reaching levels we have not seen in over 10 years.
Sales. Putnam sales surged again in the first quarter, with single.family home sales spiking over 35% compared to last year and now up over 21% for the rolling year. Sales have now been going up for over four years, with transactions up in seven straight quarters and 15 out of the last 16. With 976 sales for the rolling year, we’re approaching the 1,000-sale mark that we have not hit since early 2006 at the tail end of the last seller’s market. We saw the same results with condos, with sales up over 35% for the quarter and the year.
Prices. After a disappointing 2015, single.family prices started the new year with a bang, spiking over 12% on average, 10% at the median, and up just a tick in the price-per-square foot. For the rolling year, prices were up at a similarly torrid pace, rising almost 4% on average and 8% at the median. Even though these types of increases are not sustainable, we do believe that Putnam’s pricing will continue to appreciate this year, particularly as inventory continues to tighten.
Inventory. Indeed, the “months of inventory” indicator fell 24% from last year’s first quarter and is now down to under 8.0 months for single.family homes. Obviously, we’re already seeing the impact of the declining inventory on pricing, and we expect that to continue through the spring market.
Negotiability. The negotiability indicators were flat, with both the listing retention rate and the days on market relatively stable. We would expect homes to start selling more quickly and for closer to the asking price as the market heats up.
Condos. The story was different for condos prices, which were down sharply for the quarter, even while the rolling year prices were relatively flat or up slightly. The condo market is very small, though, so it’s prone to skewing by a few outliers.
Going forward, we believe that these levels of buyer demand will continue through a robust spring market, although we do not expect that the spike in prices is sustainable over the long term. The fundamentals of the market, though, are good, with prices still at attractive levels, buyer demand high, interest rates low, and the economy generally improving.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Orange Market Overview
The Orange County housing market finally showed the long awaited signs of meaningful price appreciation in the first quarter of 2016, with prices up significantly for the first time in almost 10 years.
Sales. Orange sales were up yet again, rising 31% from last year and now up over 28% for the rolling year. This was nothing new – we have now seen sustained increases in Orange transactions for almost four years, with sales up six quarters in a row and 15 out of the last 16. Indeed, we are now seeing sales at historically high levels, with Orange closing over 3,000 sales for the rolling year for the first time since 2007 at the tail end of the last seller’s market.
Prices. What’s new is that for the first time in years, we saw some meaningful price appreciation in Orange, with prices up 3% on average, almost 4% at the median, and up just a tick in the price per square foot. This was important because prices had fallen every single calendar year since 2007 – that’s eight straight years of year-on-year price depreciation. As a result, home prices today are down almost 30% from the height of the market. But for the first time, Orange homeowners have reason to be hopeful that the trend is moving in a positive direction.
Negotiability. Certainly, the negotiability indicators support the view that Orange is due for continued meaningful price appreciation. The months of inventory in Orange fell again in the first quarter, dropping below 10 months for the first time in over 12 years. Similarly, the days on market fell again and the listing retention rate went up a full point, showing that homes are selling more quickly and for closer to the asking price – all of which tends to drive price appreciation.
Condominiums. The condo market also surged, rising over 43% for the quarter and up almost 45% for the year. So we have a lot of demand. Unfortunately, we’re not yet seeing that demand impact pricing, which was down across the board. As we’ve noted before, the problem with Orange condos is that they’re priced too close to single.family homes. If we continue to see meaningful appreciation in single.family prices, that will arrest the slide in condo prices.
Going forward, we believe that Orange is finally seeing the light at the end of the dark tunnel it entered in 2008. We expect that demand will stay strong through a robust spring market that will continue to drive meaningful price appreciation through 2016 and for several years to come.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Rockland Market Overview
The Rockland County housing market started the year strong, with increases in both sales and prices that are now reaching levels we have not seen in over 10 years at the tail end of the last seller’s market.
Sales. Rockland sales were up again, rising over 16% from last year’s first quarter and now up over 20% for the rolling year. We’ve now seen sustained rates of growth for almost four years, with transactions up for the last six quarters and 14 out of the last 15. Indeed, sales totals are now approaching “seller market levels,” with the 1,880 rolling year sales the highest total in over 10 years.
Prices. This sustained increase in buyer demand is having its expected impact on pricing, with prices up almost 3% on average and almost 2% in the price.per.square foot, but falling a tick at the median. For the year, the results are more uniform, with prices up about 3% across the board. After the sharp decline following the financial crisis in 2008, and then a few years of bouncing around the bottom, Rockland prices are now starting their fourth year of modest but meaningful appreciation. They still have a way to go before they gain back the losses suffered after the financial crisis of 2008, but they’re trending in a positive direction.
Negotiability. The negotiability indicators showed that sellers are gaining a bit more leverage with buyers. We saw another dramatic decline in the number of homes for sale, for example, with the months of inventory falling over 21% and now reaching the six-month level that usually delineates a “seller’s market.” Similarly, the listing retention rate rose above 96% for the first time since 2006, and the days on market continued to fall. All together, a declining inventory, with homes selling more quickly and for closer to the asking price, tells us that we’re moving into a strong seller’s market.
Condos. The condo market in Rockland continues to struggle. Sales were up, but not as sharply as with single.family homes. And prices were down slightly, indicating that buyer demand in the market is not pushing appreciation. With condo inventory actually rising a bit, we’re not likely to see any meaningful price appreciation in this entry level market anytime soon.
Going forward, we expect a robust spring market that will continue to drive prices and sales upward. With prices still at attractive levels, interest rates low, and the economy generally strengthening, we believe that Rockland will have its best year since the height of the seller’s market.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
