Fourth Quarter 2017 Real Estate Market Report: Sussex County Overview

Activity in the Sussex County housing market surged yet again in the fourth quarter of 2017, with sales up sharply even while prices continued to struggle.

Sales. Sussex sales were up yet again in the fourth quarter, rising over 18% from last year and now up over 22% for the year. And the 2,348 sales for the year represented the highest calendar year total in over 10 years. Indeed, Sussex sales have now more than doubled from the bottom of the market in 2011.

Prices. Even with these sustained increases in buyer demand, though, prices continued to struggle. Average prices were down every quarter in 2017 compared to the prior year quarter, falling 2% in the first, 2% in the second, 3% in the third, and now 3% in the fourth. Accordingly, the yearlong price trend was negative, down 2.5% on average and almost 5% at the median. We remain baffled by this, since rising sales and declining inventory would normally drive prices up, not down. But we’ve now seen this trend develop for over a year, so we are skeptical, if hopeful, that prices will turn around in the spring market.

Inventory. The Sussex inventory of available homes for sale fell again, dropping over 35% and now down to about seven months. That’s a significant decline, but inventory is still higher than in other Northern New Jersey counties, which are all below the six‑month inventory line that usually signals the beginning of a seller’s market. If inventory continues to go down, we would expect that to put some additional upward pressure on pricing.

Negotiability. The negotiability metrics indicated that sellers were gaining negotiating leverage with buyers. For the year, the days‑on‑market fell by 14%, dropping by about a month, and sellers were retaining a lot more of their asking price, with listing retention jumping almost two percentage points and now up to over 96%.

Going forward, we expect that Sussex is going to continue to see rising sales. The question is whether this will finally drive some meaningful price appreciation, or at least stem the decline we saw this year. But we remain hopeful that an improving economy, attractive pricing, and near‑historically‑low interest rates will eventually drive prices up in 2018.

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 18, 2018 at 11:27 am
Vincent Abbatecola | Category: Quarter Market Report, Rand Country Blog | Tagged , , , , ,

Fourth Quarter 2017 Real Estate Market Report: Essex County Overview

The Essex County housing finished 2017 strong, with solid increases in both sales and prices.

Sales. Essex sales activity was up again, rising almost 6% from the fourth quarter of last year. And for the full year, sales were up over 8%, hitting over 5,000 sales. This represented the largest yearly total since the height of the seller’s market over 10 years ago, and an increase of almost 70% from the bottom of the market in 2011.

Prices. Essex also started to show some signs of meaningful price appreciation. For the quarter, the average price rose over 5% and the median was up over 4%. More importantly, we saw the first meaningful yearly price appreciation in years, with the average and median both up about 2%. With inventory continuing to fall and buyer demand relatively strong, we would expect prices to gain some momentum throughout 2018.

Inventory. Essex inventory fell again, dropping over 41% from last year’s fourth quarter and now down to just over four months’ worth of available homes. 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 is now well below six months would tend to indicate more price appreciation in 2018.

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 significant negotiating leverage. Most notably, the listing retention rate crossed the 100% threshold for the third quarter in a row, meaning that Essex homes on average are selling for higher than the listed price. Similarly, the days‑on‑market fell about 11%, and is now down to well under four months of market time. Those are both positive signals of potential future appreciation.

Going forward, we expect that Essex County’s sales activity will continue to drive meaningful price appreciation. 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 a strong market throughout 2018.

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 18, 2018 at 10:29 am
Vincent Abbatecola | Category: Quarter Market Report, Rand Country Blog | Tagged , , , , ,

Fourth Quarter 2017 Real Estate Market Report: Morris County Overview

The Morris County housing market finished 2017 with strong signs of meaningful price appreciation, even while low levels of inventory continued to stifle sales growth.

Sales. Reduced inventory continued to hold back Morris sales growth, with transactions down almost 3% for the quarter, breaking a streak of 12 straight quarters of year‑on‑year sales growth. That said, sales were still up almost 2% for the year, and are now up almost 70% from the bottom of the market in 2011. More significantly, sales are falling not because of a lack of buyer demand, but a lack of available homes for eager buyers to purchase.

Prices. These sustained levels of buyer demand are finally having some modest impact on pricing. Prices were up again in the fourth quarter, rising almost 5% on average and 3% at the median. And we are starting to see long‑term price appreciation, with the 2017 full‑year average price up almost 3% and the median up almost 4%. Sustained levels of buyer demand coupled with falling inventory is likely to continue to drive prices up in 2018.

Inventory. Morris inventory fell again, dropping almost 39% from last year’s fourth quarter and now down to 4.5 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 well below that six‑month mark indicates that we could be in for some meaningful price appreciation throughout 2018.

Negotiability. The negotiability indicators showed that sellers are continuing to gain negotiating leverage with buyers. For the year, the days‑on‑market were down almost 8%, falling by about 10 days, and the listing retention rate was up almost a full point, now up to almost 98% of the last listed price.

Going forward, we expect that Morris County’s sales activity and low levels of inventory will continue to have a meaningful impact on pricing. With homes still at historically affordable prices, interest rates low, and a generally improving economy, we believe that Morris will enjoy a robust seller’s market in 2018.

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 18, 2018 at 9:30 am
Vincent Abbatecola | Category: Quarter Market Report, Rand Country Blog | Tagged , , , , ,

Fourth Quarter 2017 Real Estate Market Report: Passaic County Overview

The Passaic County housing market finished the 2017 year strong, with solid increases in sales and prices, and clear signs of a developing seller’s market.

Sales. Passaic sales were up again in the fourth quarter, rising over 4% and up over 11% for the 2017 calendar year. We’ve now seen sustained increases in buyer demand for over five years, with quarterly sales up in 24 out of the last 26 quarters. As a result, Passaic closed over 3,600 homes in 2017, the highest total we’ve seen since the height of the last seller’s market over 10 years ago.

Prices. More importantly, we’re starting to see these sustained levels of buyer demand have an impact on pricing. Prices were up across the board in the fourth quarter, rising almost 5% on average and at the median. More importantly, the yearlong trend was also positive, with prices up 3% on average and 4% at the median. With buyer demand strong, and inventory falling, we would expect prices to continue to rise.

Inventory. Inventory was down again, falling 41% from last year, and is now down to under five months of inventory. Generally, anything less than six months indicates the start of a seller’s market, and we are now well below that level.

Negotiability. The Passaic negotiability metrics indicated that sellers are continuing to gain leverage over buyers, with homes selling more quickly and for closer to the asking price. Over the past year, the days‑on‑market have fallen over 12%, and are now down to about four months of market time. Similarly, the listing retention rate is up over a full percentage point, now close to 98% of the last listed price. These are both good signs for Passaic sellers.

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 these levels of buyer demand, coupled with declining inventory, to continue to drive price appreciation throughout a robust 2018.

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 17, 2018 at 4:44 pm
Vincent Abbatecola | Category: Quarter Market Report, Rand Country Blog | Tagged , , , , ,

Fourth Quarter 2017 Real Estate Market Report: Bergen County Overview

The Bergen County housing market slowed a bit in the fourth quarter, but still finished the year with meaningful price appreciation and remarkably low inventory levels.

Sales. Home sales were down slightly, falling over 4% from the fourth quarter of 2016, which marked the first quarterly decrease in sales in over three years. And for the year, sales were basically flat. That said, the near‑7,000 single‑family sales in 2017 was the highest number of transactions since the height of the last seller’s market over 10 years ago. 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. Single‑family home prices were relatively flat after a torrid third quarter, falling just a tick on average and up about 2% at the median. Over the year, though, we are seeing the impact of declining inventory and strong demand, with prices up about 4% on average and at the median.

Negotiability. All the negotiability indicators are also signaling a rising seller’s market. Inventory continued to tighten in the fourth quarter, with the months of inventory falling almost 5% and now down to well under four months. Anything fewer than six months starts to signal a seller’s market, and we are now way below that level. Similarly, homes are continuing to sell more quickly and for closer to the asking price. As inventory continues to tighten, we would expect to see sellers gain even more negotiating leverage.

Condos. Activity in the Bergen condo market was flat in the fourth quarter, and prices fell about 2%. For the year, sales were up about 5% and prices down just a tick. With inventory now down to about four months, though, we would expect to eventually see some meaningful price appreciation.

Going forward, we expect Bergen County will experience a robust 2018. With inventory tightening, a relatively strong economy, near‑historically‑low interest rates, and prices still at attractive 2004‑05 levels, we believe that sustained buyer demand will continue to drive meaningful price appreciation through the full year. And those rising prices will likely tempt more homeowners into the market, which will drive sales up to even higher levels.

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 17, 2018 at 3:55 pm
Vincent Abbatecola | Category: Quarter Market Report, Rand Country Blog | Tagged , , , , ,

Homes in Northern New Jersey Are STILL Cheaper Than They’ve Been in a Generation

Right now is a really great time to be buying a home in Northern New Jersey

Man, do I hate saying that. As I’ve explained before, I hate the phrase “great time to buy,” for a couple of reasons.

First, people have different needs, and a market that’s great for one person might be terrible for another person.

Second, while markets tend to move together, we do see micro-markets (i.e., towns and villages) that defy larger trends. So while it might be a great time to buy in Village A, it might be not so great in Town B.

Third, and most importantly, though, “it’s a great time to buy!” just seems like a hack thing to say, the kind of thing that TERRIBLE real estate agents have said for generations to get unsuspecting and gullible people to buy an overpriced home. And I think that most people get suspicious when real estate agents talk like that.

So I understand if you’re skeptical. And that’s why I don’t want to just TELL you it’s a great time to buy, I want to SHOW you why it’s a great time to buy.

Specifically, I want to make this specific point: the monthly payment you need to buy an inflation-adjusted average priced home in Northern New Jersey is as low as its been in a generation.

Think about what I’m saying for a second. I’m NOT saying that homes are cheaper than they’ve ever been. That’s not true. Depending on the year, homes have appreciated, and if you go back more than 15 years, they’ve appreciated pretty dramatically. I’m just saying that the MONTHLY PAYMENT you need to make to buy the AVERAGE PRICED HOME is lower right now than it’s been in a generation — if you control for the effects of inflation.

Take a look at these graphs for Bergen and Passaic Counties, and you’ll see what I mean:

On these graphs, as we’ve done before, we’ve plotted the monthly payment that a purchaser in the county would have to make to purchase the average-priced home at various points over the years. After all, affordability is not just a matter of the sales price – it’s a matter of the monthly payment you’re going to have to make, which is partly a function of the prevailing interest rate. And then to measure the change in the monthly payment over time, we factored in the effects of inflation.

So we took the following data points:

•The average price of a single family home up to the end of 2016 – from the local MLS data.
•The average interest rate for a 30-year fixed-rate mortgage for every calendar year up to 2016 – from Freddie Mac.
•The prevailing inflation rate for every calendar year up to 2016– from the US Department of Labor.

You can see the results on the graph. The monthly payment you have to make to purchase the average-priced home in Bergen or Passaic is just about as low as it’s been in years. We saw the slightest uptick from 2012-2014, partially because of a slight increase in pricing and a slow inflating of interest rates. But the payment came down again over the past two years, with rates falling and prices stalling.

Generally, though, we’re talking about a monthly payment that is as low as anytime in the past 30 years – and as low as it was in the mid-1990s, during a crippling buyer’s market. We don’t have data going back in Passaic as far as we do in Bergen, but there’s no reason to think that the markets behaved differently during the 1980s.

So why are monthly payments lower than they’ve been in a generation? A couple of reasons:

1) Prices. Part of it is that we have not seen prices go up in any measurable way in almost 10 years. Home prices peaked in 2006-08, lost about 25-30% of value from 2008-2010, and have bounced around a little since then. But they’re still around 2004 levels — without controlling for inflation.

2) Inflation. Ah, yes, inflation — the value of money goes down a little bit each year as inflation takes a bite. Now, inflation rates have been pretty low over the past 15 years from historical standards, but that little bit each year does add up.

3) Rates. But the biggest reason we’re seeing monthly payments lower than they’ve been in a generation is that rates are still at historic lows. After all, about ten years ago, the average interest rate was about 6%. For the past few years, it’s been below 4%. That’s a huge difference in your monthly payment.
Again, I HATE it when real estate professionals say that “this is a great time to buy,” because at many times in our history that has been bad advice.

But if you measure a “great time to buy” by looking at the monthly payment you’ll have to make to buy a home, then we’re talking about as good a time to buy as any in the past decades. Prices have been flat for almost 10 years, and they’re down significantly if you factor in the effects of inflation. And interest rates are still as low as we’ve ever seen them. Unless we see some major shock to the economy, I think we’re looking at a near-decade of reasonable price appreciation coupled with increasing interest rates – both of which are going to drive that monthly payment up over the next few years.

So I’m not going to tell you what to do. That’s not my job. But if you’ve been thinking about buying a home, I think these graphs speak for themselves.

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.

Joe Rand is the Chief Creative Officer of Better Homes and Gardens Real Estate | Rand Realty, and compiles and writes the Rand Quarterly Market Report.

Posted on January 10, 2018 at 12:50 pm
Vincent Abbatecola | Category: Analysis, Bergen County, New Jersey, North Bergen, Passaic County, Rand Country Blog | Tagged , , , , , ,

Third-Quarter 2017 Real Estate Market Report: Sussex County Market Overview

Activity in the Sussex County housing market surged yet again in the third quarter of 2017, with sales up sharply even while prices continued to struggle.

Sales. Sussex sales were up yet again in the third quarter, rising over 17% from last year and now up over 22% for the year. The 2749 closings represented the highest 12‑month total in over 10 years. Indeed, Sussex sales have now more than doubled from the bottom of the market in 2011.

Prices. Even with these sustained increases in buyer demand, though, prices continued to struggle. We saw some “green shoots” of price appreciation at the end of 2016, with the average price up almost 8% in the fourth quarter. But prices are now down every quarter in 2017, falling 2% in the first, 2% in the second, and now 3% in the third. As a result the rolling year price is basically flat, with the media down just a tick.

Inventory. The Sussex inventory of available homes for sale fell again, dropping 11% and now down to about 10 months. That’s a significant decline, but inventory is still 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. If inventory continues to go down, we would expect that to put some additional upward pressure on pricing.

Negotiability. The negotiability metrics indicated that sellers were gaining negotiating leverage with buyers. The days‑on‑market fell sharply, dropping by almost a month and down now to about four months of market time. And sellers were retaining a lot more of their asking price, with listing retention jumping almost two percentage points and now up to almost 97%.

Going forward, we expect that Sussex is going to continue to see rising sales that will eventually drive meaningful price appreciation. With an improving economy, homes priced at attractive levels, and near‑historically low interest rates, we expect buyer demand coupled with declining inventory to drive a strong fall market and a robust 2018.

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 November 13, 2017 at 10:57 am
Vincent Abbatecola | Category: Quarter Market Report, Rand Country Blog | Tagged , , , , ,

Third-Quarter Real Estate Market Report: Essex County Market Overview

The Essex County housing market slowed a touch in the third quarter of 2017, with sales up a bit but prices mixed.

Sales. Essex sales activity was up again, rising almost 4% from the third quarter of last year. This continues a trend that’s been developing for a while, with the rolling year sales up over 9%. Indeed, Essex closed over 5,300 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 almost 70% from the bottom of the market in 2011.

Prices. Pricing, though, was mixed. Even with these sustained increases in buyer demand, the average price was down almost 2% for the quarter, even while the median was up just a tick. We see the same mixed story in the yearlong trends, with the average down just a tick while the median is up about 1%. With inventory continuing to fall and buyer demand relatively strong, we would expect prices to gain some momentum in the fall.

Inventory. Essex inventory fell again, dropping over 29% from last year’s third quarter and now down to just under six months’ worth of available homes. 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.

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 significant negotiating leverage. Most notably, the listing retention rate crossed the 100% threshold for second quarter in a row, meaning that Essex homes on average are selling for higher than the listed price. Similarly, the days‑on‑market fell about 5%, and is now down to under four months of market time. Those are both positive signals of potential future appreciation.

Going forward, we expect that Essex County’s sales activity will slowly drive some meaningful price appreciation. 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 a strong market through 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 November 13, 2017 at 10:54 am
Vincent Abbatecola | Category: Quarter Market Report, Rand Country Blog | Tagged , , , , ,

Third-Quarter 2017 Real Estate Market Report: Morris County Market Overview

Prices in the Morris County housing market showed more signs of life in the third quarter of 2017, even while low levels of inventory continued to stifle sales growth.

Sales. Morris County sales were up just a tick, continuing a streak in which year‑on‑year sales have now gone up for 12 straight quarters, three full years of sustained buyer demand. For the year, sales were up over 5%, and are now up over 65% from the bottom of the market in 2011.

Prices. These sustained levels of buyer demand are finally having some modest impact on pricing. Continuing a trend that started this year, prices were up again, this time by about 2% on average and 3% at the median. And we are starting to see long‑term price appreciation, with the rolling year average price up 1% and the median rising over 2%. Sustained levels of buyer demand coupled with falling inventory is likely to drive pricing up through the rest of the year.

Inventory. Morris inventory fell again, dropping almost 30% from last year’s third quarter and now down to just under six months’ worth of inventory. 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 at that six‑month mark indicates that we could be in for some meaningful price appreciation throughout 2018.

Negotiability. The negotiability indicators showed that sellers are continuing to gain negotiating leverage with buyers. The days‑on‑market indicator was down by another 9 days, falling almost 8%, indicating that homes were selling more quickly. And the listing price retention rate continues to rise, now up to just over 98% for the quarter, signaling that sellers are having more success getting buyers to meet their asking prices.

Going forward, we expect that Morris County’s sales activity and low levels of inventory will continue to have a meaningful impact on pricing. With homes still at historically affordable prices, interest rates low, and a generally improving economy, we believe that Morris will have a strong fall market leading to a robust 2018.

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 November 13, 2017 at 10:51 am
Vincent Abbatecola | Category: Quarter Market Report, Rand Country Blog | Tagged , , , , ,

Third-Quarter 2017 Real Estate Market Report: Passaic County Market Overview

The Passaic County housing market surged in the third quarter of 2017, with both sales and prices showing signs of a strong seller’s market.

Sales. Passaic sales were up again in the third quarter, rising over 8% and now up over 13% for the rolling year. We’ve now seen sustained increases in buyer demand for over five years, with quarterly sales up in 23 out of the last 25 quarters. As a result, Passaic closed over 3,600 homes for the calendar year, the highest total we’ve seen since the height of the last seller’s market ten years ago.

Prices. More importantly, we’re starting to see these sustained levels of buyer demand have an impact on pricing. Prices were up across the board in the third quarter, rising over 3% on average and over 6% at the median. More importantly, the yearlong trend was also positive, with prices up just a tick on average but rising almost 2% at the median. With buyer demand strong, and inventory falling, we would expect prices to continue to rise.

Negotiability. The Passaic negotiability metrics indicated that sellers are continuing to gain leverage over buyers. Inventory was down again, falling over 28% from last year, and is now down to about the six‑month level that starts to signal a rising seller’s market. Meanwhile, homes were selling more quickly and for closer to the asking price, with the days‑on‑market falling almost 15% and the listing retention rate up a full percentage point.

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 these levels of buyer demand, coupled with declining inventory, to continue to drive price appreciation in a robust fall market and into 2018.

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 November 13, 2017 at 10:47 am
Vincent Abbatecola | Category: Quarter Market Report, Rand Country Blog | Tagged , , , , ,