First Quarter 2017 Real Estate Market Report – Essex County, New Jersey

ESSEX-NJ_Q1-2017-QMRThe Essex County housing market started the year strong, with another increase in sales activity finally showing some impact on pricing.

Sales. Essex sales activity was up sharply from the first quarter of last year, rising almost 12% and driving the rolling year activity 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. But Essex closed over 5,000 units over the rolling year, the largest 12-month total since the height of the last seller’s market over 10 years ago, and up over 65% from the bottom of the market in 2011.

Prices. Essex buyer demand is finally showing signs of an impact on pricing. The average price was up almost 4% from the first quarter of last year. Although the median was down just a tick for the quarter, and the rolling year pricing is still down, that increase in the average price was still promising. With inventory continuing to fall and buyer demand relatively strong, we would expect prices to gain some momentum in the Spring market.

Inventory. Essex inventory fell again, dropping almost 39% from last year’s first quarter and now down to 5.8 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 Essex crossed that threshold this quarter augurs well for pricing 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 that sellers might be gaining just a little bit of negotiating leverage. The days-on-market fell by six 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 meaningful price appreciation through a robust Spring market and the rest of 2017.

To learn more about Better Homes and Gardens Real Estate Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.

Posted on April 28, 2017 at 9:43 am
James Troia | Category: Rand Country Blog | Tagged , , , , , ,

First Quarter 2017 Real Estate Market Report – Northern New Jersey Market Overview

New-Jersey-OVERVIEW_Q1-2017-QMRThe 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.

To learn more about Better Homes and Gardens Real Estate Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.

Posted on April 27, 2017 at 9:27 am
James Troia | Category: Rand Country Blog | Tagged , , , , , , , , , ,

Better Homes and Gardens Rand Realty Quarterly Market Report For 2016Q4 – Essex County, New Jersey

Essex 2016Q4The 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.

To learn more about Better Homes and Gardens Real Estate Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.

Posted on January 16, 2017 at 9:54 am
James Troia | Category: Rand Country Blog | Tagged , , , , ,

Better Homes and Gardens Rand Realty Quarterly Market Report For 2016Q4 Overall – Northern New Jersey

Northern New Jersey 2016Q4The Northern New Jersey housing market finished strong in the final quarter of 2016, with sales up sharply even while pricing continued to struggle. But with inventory levels falling throughout the region, we expect that sustained buyer demand will drive meaningful if modest price appreciation in 2017.

Sales were strong throughout the region. After a relatively slow third quarter, regional sales surged back, rising almost 11% and up sharply in every county in the report: rising 11% in Bergen, 14% in Passaic, 12% in Morris, 11% in Essex, and 18% in Sussex. This strong fourth quarter helped the region close the 2016 year up almost 11% in sales, reaching the highest yearly transactional total in over ten years, since the height of the last seller’s market. Indeed, regional sales are now up 63% from the bottom of the market in 2011.

Inventory continues to tighten. We determine the “months of inventory” in a market by measuring 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 less than six months to be a “tight” inventory that signals the potential of a seller’s market that would drive prices up. Well, the months of inventory for the Northern New Jersey region has now crossed over that line, dropping down to 5.3 months. Moreover, inventory was down in every individual county in the Rand Report, and is now below or nearing the six-month level: Bergen single-family homes at 3.6 months and condos at 6.1 months, Passaic at 8.3, Morris at 7.3, Essex at 7.0, and Sussex at 11.3. Certainly, if inventory continues to tighten, and demand stays strong, we are likely to see upward pressure on pricing.

Even with sales up and inventory down, though, average prices have been flat or falling throughout the region. Basic economics of supply and demand tells us that after five years of steadily increasing buyer demand, we should expect to see some meaningful price increases. But prices languished, with the regional price down just a tick from last year’s fourth quarter, but down almost 2% for the year. Moreover, the average prices for the year were down in almost all of the individual counties, rising only for Bergen condos, with just a tick up for Sussex. And maybe that’s the tell it might be that the market is simply stronger at the lower end, so lower priced homes (like Bergen condos and Sussex properties) are making up a larger percentage of the mix of properties sold.

Going forward, we remain confident that rising demand and falling inventory will drive price appreciation in 2017. Sales have now been increasing for almost 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 that better days are ahead, and that we are likely to see modest but meaningful price appreciation in 2017.

To learn more about Better Homes and Gardens Real Estate® – Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.

Posted on January 12, 2017 at 9:36 am
James Troia | Category: Rand Country Blog | Tagged , , , , , , , , ,

Real Estate Market Report: Third Quarter 2016 – Essex County, New Jersey

essex-bhg_northern-nj_q3-2016-qmr-digitalThe Essex County housing market was a mass of contradictions in the third quarter of 2016, with sales down but prices up.

Sales. Essex activity continued to disappoint in the third quarter, with transactions down almost 3% from last year. This marked the first quarter of yearonyear sales declines in almost two years, breaking a sixquarter streak of sales growth. After a robust beginning to the year, Essex is now significantly underperforming its neighboring counties, with the rolling year sales up only about 3%, well below what we’re seeing elsewhere in the region.

Prices. Even with the slackening of activity, prices showed some signs of life. The average price was up about 4%, with the median up just a tick. This was welcome news to Essex homeowners, since we had seen prices go down over the past two quarters. The overall picture, though, is not promising, with rolling year pricing down over 1% on average and almost 5% at the median.

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 continues to see declining inventory, falling almost 18% in the quarter down to under seven months. That’s a pretty tight market, so we would normally expect to see some upward pressure on pricing.

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 daysonmarket fell just a day, but the listing retention rate was up to almost 100%. Those are both positive signals 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 buyer demand will strengthen and drive modest but meaningful price appreciation in 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.

Posted on October 12, 2016 at 3:00 pm
James Troia | Category: Rand Country Blog | Tagged , , , , ,

Real Estate Market Report: Third Quarter 2016 – Northern New Jersey Market Overview

overview-bhg_northern-nj_q3-2016-qmr-digitalThe Northern New Jersey housing market plateaued in the third quarter of 2016, with sales flattening out after a torrid start to the year and pricing struggling to gain traction. With inventory levels falling throughout the region, though, we expect that the market might gain strength going into 2017.

Sales were basically flat throughout the region. After a strong start to the year, sales slowed during the third quarter, rising only about 2%. The good news is that if you look at the rolling year, sales were up almost 10%, continuing a trend we’ve been watching for about five years. Although we are not yet at transactional levels that we saw during the last seller’s market of the mid2000’s, sales are up about 40% from the bottom of the market in 2009 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. 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. And that’s about where we are trending throughout the region, with regional inventory down over 25%. Indeed, Bergen is already below six months of inventory, and Morris, Essex, and Passaic are all below nine months.

Even with sales up and inventory down, though, average prices have been dropping throughout the region. We have been a little disappointed in the pricing this year, after what looked to be “green shoots” of price appreciation toward the end of 2015. Certainly, 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. It might be that the market is simply stronger in the lowerend than the middle or higherend, which is changing the mix of properties sold and skewing the averages. Or it could still just be a matter of time before falling inventory and rising demand starts impacting pricing.

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 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 that better days are ahead, and that we are likely to see modest but meaningful price appreciation in 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.

Posted on October 11, 2016 at 2:58 pm
James Troia | Category: Rand Country Blog | Tagged , , , , , , , , ,

Second-Quarter 2016 Real Estate Market Report: Essex County

EssexNJ-Q2-2016-QMRThe Essex County housing market stalled in the second quarter of 2016, with sales up slightly but prices continuing to struggle.

Sales. Essex activity was a bit disappointing in the second quarter, with transactions up only 4% after a robust beginning to the year. Any kind of increase is a good sign for Essex homeowners, of course, but sales were up much more sharply in all of Essex’s neighboring counties. On the positive side, this did mark the sixth straight quarter of year‑on‑year sales growth, and rolling year sales are up over 8%.

Prices. Prices continued to struggle, dropping over 4% in the average and almost 5% at the median. After some modest price appreciation in 2015, we thought that Essex had put the correction behind and was poised for some meaningful price increases. But we’ve now had prices go down in two straight quarters, and the rolling year trend is down about 4% on both the average and the median. We still think that basic economics of supply and demand suggest that prices will go up this year if demand stays 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 6 months as a signal for a seller’s market, where tight inventory leads to multiple offer situations, bidding wars, and ultimately appreciating prices. Essex crossed that threshold in the first quarter, but a surge of new listings in the spring brought the months of inventory back to 7.6 months. Still, that’s a pretty tight market, so we would expect to see some upward pressure on pricing.

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 just a day, but the listing retention rate was up to almost 100%, which is really unusual in a depreciating market. We would expect those numbers to continue to tighten in an improving market.

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 modest but meaningful price appreciation by the end of the year.

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.

Posted on July 19, 2016 at 9:28 am
James Troia | Category: Rand Country Blog | Tagged , , , , ,

Second-Quarter 2016 Real Estate Market Report: Northern New Jersey Market Overview

OverviewNorthNJ-Q2-2016-QMRThe Northern New Jersey housing market continued to surge in the second quarter of 2016, with sales up sharply throughout the region. But rising levels of buyer demand are not yet having any real impact on pricing, which was flat or down in each of the counties.

Sales were up over 13% 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. 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. That’s where we are right now in Bergen and Morris, with both counties near the 6‑month threshold, and inventory in the other counties is tightening considerably.

Even with sales up and inventory down, though, average prices dropped throughout the region. We have been a little disappointed in the pricing this year, after what looked to be “green shoots” of price appreciation toward the end of 2015. Certainly, 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. But appreciation still eludes us. 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 averages. Or it could still just be a matter of time before falling inventory and rising demand starts impacting pricing.

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 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 that price appreciation is coming, and that the region will experience a robust summer market that continues throughout the rest of 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.

Posted on July 16, 2016 at 10:29 pm
James Troia | Category: Rand Country Blog | Tagged , , , , , , , , ,

First Quarter 2016 Real Estate Market Report: Essex Market Overview

ESSEX_NJ-Q1-2016-QMRThe 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.

Posted on April 27, 2016 at 9:27 am
James Troia | Category: Rand Country Blog | Tagged , , , , ,

So What’s Going on in the Essex County Real Estate Market?: The Rand Quarterly Market Report for 2015Q4

NJ GRAPHS-BHG_Q4-2015 QMR-5-2The Essex County housing market closed the year with a modest increase in sales and some mixed results in pricing. For the year, sales were up fairly significantly, but we’re still not seeing any meaningful price appreciation.

Sales. Essex sales were up in the fourth quarter, rising over 4% from last year and finishing the year up almost 10%. Indeed, Essex closings have now gone up in each of the last four years, during which sales have now increased by over 50% from their 2011 levels at the bottom of the market. 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 jump in sales, though, has not yet had an impact on pricing, which remains relatively flat over the past three years. We are seeing pricing about 8% higher than at the bottom of the market, but we haven’t seen any movement over the past three years, even while transactions went up. Generally, it takes time for increases in demand to drive pricing changes, so we believe it’s just a matter of time before we start to see meaningful price appreciation in Essex.

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 – were essentially flat. The days-on-market fell slightly in the quarter and for the year, indicating that homes were selling just a bit quicker, and the listing retention rate was up a little for both the quarter and the year, but neither indicator moved in a way that would dramatically affect the negotiating balance between buyers and sellers.

Going forward, we expect that buyer demand will stay strong through 2016. With a relatively strong economy, homes priced at attractive levels, and near-historically low interest rates, we believe that we will start to see some meaningful price appreciation by the end of the year.

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.

Posted on February 10, 2016 at 10:29 am
James Troia | Category: Rand Country Blog | Tagged , , , , ,