The Northern New Jersey housing market surged ahead in the first quarter of 2017, starting the year with a dramatic increase in home sales coupled with modest-but-meaningful signs of price appreciation. With inventory levels continuing to fall throughout the region, we expect that sustained buyer demand will drive a robust seller’s market through the Spring and the rest of 2017.
Sales surged throughout the region. All the Northern New Jersey markets got off to a strong start to the year, with regional sales up almost 12% and transactions rising in every market in the region: up 1% in Bergen, 30% in Passaic, 8% in Morris, 12% in Essex, and 32% in Sussex. For the rolling year, sales were up over 9%, reaching sales levels we have not seen since the height of the last seller’s market. Indeed, regional sales are now up over 65% from the bottom of the market in 2011.
The number of available homes for sale continues to go down. We measure the “months of inventory” in a market by looking at the number of homes for sale, and then calculating how long it would take to sell them all given the current absorption rate. The industry considers anything fewer than six months to be a “tight” inventory that signals the potential of a seller’s market that would drive prices up — and we’ve now seen this market cross below that line for the second quarter in a row. Indeed, inventory was down from last year in every individual county in the Report: Bergen single-family homes down 21%, and condos down 34%; Passaic down 38%; Morris down 34%; Essex down 39%; and Sussex down 36%. If inventory continues to tighten, and demand stays strong, we are likely to see more upward pressure on pricing. With sales up and inventory down, prices are starting to show some “green shoots” of modest price appreciation. Basic economics of supply and demand would tell us that after five years of steadily increasing buyer demand, we would expect to see some meaningful price increases. And we’re beginning to see some promising signs: the regional average sales price was up almost 1% from last year’s first quarter, and the average price was up in almost every county in the report.
Going forward, we remain confident that rising demand and falling inventory will continue to drive price appreciation through the rest of 2017. Sales have now been increasing for five years, which has brought inventory to the seller’s market threshold in much of the region. 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 continue to believe the region is poised for a robust Spring market and a strong 2017.
The Dutchess County housing market struggled through the first quarter of 2017, with sales and prices down after a strong 2016. We believe that this is just a short-term retreat in what will be a strong year for the market.
Sales. Dutchess sales were surprisingly down in the first quarter. Transactions fell over 7%, the first time we have seen year-on-year sales go down in almost three years. For the year, sales are still up over 6%, but the current trend is a little perplexing given that most of the Hudson Valley has been up significantly.
Prices. Home prices were also down, falling about 2% on average and the median, and down almost 3% in the price-per-square foot. For the year, though, prices are still up, so the first quarter results might just be an anomalous blip in the data.
Negotiability. Dutchess inventory continues to decline, down almost 19% and now down to under 12 months of inventory. Although we are nowhere near the six-month level of inventory that usually signals a “seller’s market,” we are certainly seeing some tightening that could support future price appreciation. The other negotiability indicators suggest that homes were selling just a little more quickly and for closer to the asking price — which is what we would normally expect with a tightening market.
Condominiums. The condo market was also down, with sales falling almost 23% and average prices down. For the year, sales and prices are still up, so, again, we might be seeing a short-term blip in the data.
Going forward, we still believe that the Dutchess market will improve in 2017, and that these first quarter results are just a short-term stall. With tightening inventory, a stable economy, near-historically-low interest rates, and homes still priced at appealing 2003-04 levels, Dutchess is likely to see rising sales and prices in the traditionally robust Spring market.
The Putnam County housing market surprisingly struggled through the first quarter of 2017, with sales and prices both down, even while the rest of the Hudson Valley was up. We believe this is a short-term blip in the data, and that Putnam is poised for better results in 2017.
Sales. Putnam single-family home sales were down over 6% for the quarter, only the second time quarterly sales have fallen in five years. For the year, sales were up over 12%, so the first quarter numbers might just be a quirk in the data.
Prices. Pricing was also down across the board, falling almost 7% on average and about 1% at the median and in the price-per-square-foot. Again, for the year, the pricing results are more mixed. We have been expecting meaningful appreciation in Putnam for some time now, and still believe that low levels of inventory and stable demand will drive prices up this year.
Inventory. Inventory continued to tighten, falling almost 30% and now down to under the six-month level that usually denotes a tightening seller’s market. With inventory this low, we would expect to see some upward pressure on pricing.
Negotiability. The days-on-market were down and the listing retention rate was up, exactly what we would expect in a strengthening seller’s market — homes selling more quickly and for closer to the asking price.
Condos. The condo market was also a little weak, with sales and prices both down for both the quarter and the year. Inventory was ridiculously low, though, down to just over three months, so we do believe that the market is poised to come back in the Spring.
Going forward, we believe that these lackluster first quarter results are anomalous, and that Putnam is poised for a stronger 2017. The fundamentals of the market are tremendous: inventory is ludicrously low, rates are near historic lows, and prices are still at attractive 2004-05 levels. So we are hopeful that we will see rising sales and prices in a robust Spring market.
The Orange County housing market started off 2017 with a bang, showing clear signs of an emerging seller’s market. Not only were sales up yet again, but prices showed the first meaningful signs of appreciation in over 10 years.
Sales. Orange sales surged again, rising over 8% from last year’s first quarter. This continued a trend we’ve been watching for over five years, with quarterly sales now up in 10 straight quarters and in 19 out of the last 20. Indeed, for the rolling year, sales were up almost 20%, and the 3,600 single-family sales were the highest total we have seen since the second quarter of 2006 — at the height of the last seller’s market.
Prices. Orange sales going up is an old story, but prices going up is something new. Home prices spiked in the first quarter, rising over 7% on average and at the median, and rising 5% in the price-per-square foot. Indeed, the increase in the average and median sales price marked the highest quarterly increase since the fourth quarter of 2005. And over the longer term, while the 1.7% increase in the rolling year average sales price doesn’t seem like much, it was the largest yearly price jump since 2007.
Negotiability. The available inventory continues to tighten in the single-family market, with the months of inventory falling almost 34% and now down to the six-month level that usually indicates the border of a seller’s market. Meanwhile, homes are selling more quickly and for closer to the asking price, with the days-on-market falling and the listing retention rate rising.
Condominiums. Even the long-moribund Orange condo market showed signs of life, with sales up over 12% and prices up across the board. We’ve said for years that what the condo market needs is an increase in single-family pricing, to create a gap between houses and condo prices. That might finally be happening.
Going forward, we believe that the Orange County housing market is poised for a big year. The fundamentals are strong: demand is high, prices are still at attractive 2003-04 levels, interest rates are at historic lows, and the economy is generally strong. With inventory continuing to decline, we expect to see more meaningful price appreciation through the rest of 2017.
The Rockland County housing market simply exploded in the first quarter of 2017, with a surge in sales and prices that drove the market to levels we have not seen since the height of the last seller’s market.
Sales. Single-family home sales spiked in the first quarter, rising almost 24% from last year, marking the ninth time out of the last 10 quarters with sales increasing from the prior year quarter. Indeed, the 2,132 sales over the past rolling year marked the highest 12-month total since the third quarter of 2004, and represented a 95% increase off the bottom of the market in 2011.
Prices. These sustained increases in buyer demand are starting to have a dramatic impact on pricing. Home prices were up for the quarter across the board, rising almost 5% on average, almost 7% at the median, and over 6% in the price-per-square foot. And we are seeing meaningful and sustainable price appreciation over the longer term, with the rolling year pricing up between 2% and 3% across the board.
Inventory. The story in Rockland County continues to be declining inventory. The months of inventory on the market declined again in the first quarter, dropping over 27% and now down to 4.8 months. Anything shorter than six months is considered a “tight” market, and Rockland is now well below that line.
Negotiability. Single-family homes again sold more quickly and for closer to the asking price in the first quarter, which is generally a sign that sellers are gaining negotiating leverage with buyers.
Condos. For the first time in years, we started to see some dramatic changes in the condo market. Sales simply surged, rising almost 39% from the first quarter of last year and now up almost 26% for the rolling year. And although pricing has been down the last several years, the combination of rising demand and falling inventory caused prices to spike across the board: up almost 13% on average, 12% at the median, and 2% in the price-per-square foot. With inventory down 40% and now below six months, we believe that this market will stay hot through 2017.
Going forward, we expect that Rockland will continue to sizzle through the traditionally robust Spring market. With prices still at attractive 2004 levels, interest rates near historic lows, inventory falling, and the economy generally strengthening, we believe that sustained buyer demand will continue to drive meaningful price appreciation through the rest of 2017.
The Westchester housing market started off 2017 with a flourish, with sales up and prices showing meaningful signs of appreciation after a slow 2016.
Sales. Home sales were strong through the first quarter. Single-family home sales were up over 6%, the tenth straight quarter of year-on-year sales increases. And the 6,266 transactions over the rolling year was the highest 12-month total since the second quarter of 2005, and marks an 87% increase off the bottom of the market at the end of 2009.
Prices. After a lackluster 2016, we finally saw some signs of life in pricing. Home prices were up across the board: almost 7% on average, over 5% at the median, and 3% in the price-per-square foot. Some of this might be the potential return of the high-luxury market, with sales of $3M-plus properties almost double the total from last year’s first quarter. Over the longer-term, prices are basically flat, but we expect that to change as inventory drives a tighter market through the Spring.
Negotiability. The negotiability indicators continue to signal the coming of a strong seller’s market. Inventory declined again, falling over 23% and now down to five months of inventory for single-family homes. This is the lowest level of inventory we have had in Westchester in over 12 years, since the height of the last seller’s market. Also, the listing retention rate was up, and the days-on-market were down, exactly what we would expect from a strengthening seller’s market.
Condos and Coops. The condo and coop markets were mixed. Sales of coops were up over 10%, but prices fell across the board over the quarter. Meanwhile, condo sales were down almost 8%, but prices spiked over 9% on average and 8% at the median. Inventory in both markets was down to well under six months, indicating that they are likely to see constricted sales but rising prices over the balance of 2017.
Going forward, we expect that Westchester is going to surge again through the traditionally robust Spring market. With inventory tightening, pricing at 2004-05 levels, and interest rates still near historic lows, we expect that buyer demand will stay strong and continue to drive price appreciation through the rest of the year.
The regional housing market in Westchester and the Hudson Valley started to show the first signs of meaningful price appreciation in the first quarter of 2017, with prices up in most of the counties. Moreover, with inventory rates dropping, we expect this trend to continue through a robust Spring market and for the rest of 2017.
Inventory throughout the region continues to drop. Regional inventory fell almost 26%, and is now down to 6.3 months–right at the level that the industry considers a “balanced” market. But many of the individual counties in the region are now well below six months, moving into “seller’s market” territory. For example, Westchester is now down to 5.0 months for single-family homes, 4.6 months for coops, and 3.2 months for condos. Indeed, outside of Dutchess County, every single market segment in every county in the region is at or below 6.1 months of inventory.
The lack of inventory is continuing to stifle sales growth. Regional sales were up 5% from the first quarter of last year, marking 10 straight quarters of year-on-year sales growth. But that 5% increase was the smallest in that 10-quarter streak, indicating that the pace of growth is slowing due to the lack of inventory. Essentially, the market is capable of even greater sales growth, but only if it gets more “fuel for the fire.” All that said, buyer demand is as strong as we’ve seen in over 10 years, with regional sales up 11% for the year and reaching the highest 12-month sales total since the third quarter of 2005 — the height of the last seller’s market.
High demand and low inventory is starting to drive modest-but-meaningful price appreciation. In our last Report, we said that we were “about to witness ‘Economics 101’ in action,” explaining that rising demand and falling supply were poised to drive prices up. Well, from that perspective, we had a “textbook” result in the first quarter, with the regional average sales price up over 7% from the first quarter of last year.
Moreover, average prices spiked in several counties in the region, rising almost 7% in Westchester, 5% in Rockland, and 7% in Orange. Prices were down in Putnam and Dutchess, but even in those counties, the yearlong trend was relatively promising. Essentially, the market is capable of even greater sales growth, but only if it gets more “fuel for the fire.”
Going forward, expect big things for this market in 2017. Demand is strong, bolstered by near-historically-low interest rates, prices that are still near 2003-04 levels (without controlling for inflation), a generally strong economy, and sharply declining inventory. Given these conditions, we expect that prices will continue to go up in a robust Spring market and throughout 2017.
The Sussex County housing market surged yet again in the fourth quarter of 2016, with sales up sharply and an eyeopening spike in prices.
Sales. Sussex sales were up again in the fourth quarter, rising over 18% from the fourth quarter of last year. And for the year, sales increased almost 19%, finishing 2016 with the highest yearly transactional total in over 10 years, since the height of the last seller’s market. Indeed, Sussex sales are now up 113% from the bottom of the market in 2011. Essentially, Sussex buyer demand is as strong as we have ever seen it.
Prices. Sussex prices absolutely spiked, rising over 8% on average and almost 10% at the median compared to the fourth quarter of last year. Those kinds of surges are probably unsustainable statistical aberrations, particularly since the calendar year increases were much more modest, with prices up just 0.2% on average and 1.5% at the median. That said, for Sussex homeowners, price appreciation has been a long time coming, so unsustainable good news is still good news.
Inventory. The Sussex inventory of available homes for sale fell by 22%, dropping to just over 11 months. That’s a significant decline, but inventory is still significantly higher than in other Northern New Jersey counties, which are all approaching the six-month inventory line that usually signals the beginning of a seller’s market. But if inventory continues to go down, we would expect that to put some additional upward pressure on pricing.
Negotiability. The negotiability metrics were mixed. Homes took a little longer to sell, with the days-on-market rising by five days. But sellers were retaining a little more of their asking price, with listing retention jumping up to 95.4% for the quarter. As the market heats up, we would expect both these indicators to show that sellers are gaining negotiating leverage with buyers.
Going forward, we expect that Sussex is likely to see some meaningful and sustained price appreciation in 2017. With an improving economy, homes priced at relatively attractive 2004 levels (without adjusting for inflation), and near historically low interest rates, we expect buyer demand coupled with declining inventory to drive a rising market in 2017.
The Essex County housing market finished the year with a surge in sales, but these sustained increases in buyer demand have not had their expected impact in driving price appreciation.
Sales. Essex sales activity recovered from a disappointing third quarter, with sales rising almost 11% from the fourth quarter of last year and finishing the calendar year up almost 5%. Buyer demand has been inconsistent throughout the year, certainly not as strong as we are seeing in neighboring Northern New Jersey counties. That said, Essex closed over 5,000 units in 2016, the largest calendar year total since the height of the last seller’s market over 10 years ago, and up almost 61% from the bottom of the market in 2011.
Prices. Essex pricing was also a bit disappointing, with the average down over 2% and the median down 3% from the fourth quarter of last year. The results were similar when we looked at the full 2016 calendar year, where prices were down over 2% on average and almost 4% at the median. This is a little surprising, given that an increase in buyer demand is usually associated with some upward pressure on pricing.
Inventory. Essex inventory fell again, falling almost 27% from last year’s fourth quarter and now down to 7.0 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. So Essex’s relatively low inventory levels raise the possibility of meaningful price appreciation in 2017.
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 just a little bit of negotiating leverage. The days-on-market fell by five days, and the listing retention rate was up sharply. Indeed, for the calendar year, sellers retained over 99% of their last list price. That’s another positive signal of potential future appreciation.
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 low inventory levels coupled with stable buyer demand will drive modest but measurable price appreciation in 2017.
Better Homes and Gardens Real Estate Rand Realty Quarterly Market Report For 2016Q4 – Morris County, New Jersey
The Morris County housing market finished the year with a sharp increase in sales, but sustained buyer demand throughout 2016 still has not had a significant impact on pricing.
Sales. Morris County sales were up significantly, rising almost 12% from the fourth quarter of last year. This continued a streak in which year-on-year sales have now gone up for nine straight quarters, over two years of sustained buyer demand. Transactions were also up 12% for the year, and are now up about 56% from the bottom of the market in 2011. So sales have now been strong for several years, indicating that buyer demand is growing.
Prices. All this sales activity, though, has not yet had its expected impact on pricing. Prices were mostly mixed for the quarter, falling over 2% on average even while the median was flat. For the year, prices were stubbornly resistant to the increasing buyer demand, falling almost 3% on average and 1% at the median. This was surprising and disappointing, particularly after the modest price appreciation that we saw in 2015.
Inventory. Morris inventory fell again, dropping over 26% from last year’s fourth quarter and now down to 7.3 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. So the fact that Morris inventory is now down to just over seven months of inventory could indicate that we will see meaningful price appreciation next year.
Negotiability. The negotiability indicators showed signs that sellers might be gaining leverage with buyers. The days-on-market indicator was down by nine days, falling almost 7%, indicating that homes were selling more quickly. And the listing price retention rate continues to rise, now up to just under 97% for the quarter and the year, signaling that sellers might be having a bit more success getting buyers to meet their asking prices.
Going forward, we expect that Morris County’s sales activity will eventually have a meaningful impact on pricing. With homes still at relatively affordable 2004 prices (without even adjusting for inflation), interest rates low, and a generally improving economy, we believe that reduced inventory coupled with rising buyer demand will drive price appreciation through 2017.