The Passaic County housing market surged in the third quarter of 2015, with sales activity up dramatically but prices relatively flat. If we continue to see these kinds of increases in buyer demand, though, it’s only a matter of time before Passaic experiences meaningful price appreciation.
Sales. Passaic sales were up dramatically in the second quarter, rising 22.3% from last year, marking the fourth straight quarter of year-over-year sales growth. Indeed, we’ve now seen sustained increases in buyer demand for over four years, with quarterly sales up in 16 out of the last 18 quarters. The 932 quarterly sales marked the highest total since the height of the seller’s market, and the 2,898 rolling year sales were more than in any calendar year since 2006.
Prices. Even with this continued increase in buyer demand, though, we’re not yet seeing a meaningful sustained impact on pricing. For the quarter, pricing was mixed, with the average down 0.2% and the median up 3.3%. For the year, the results are a little more encouraging, with average up just a tick and the median up almost 2%. Passaic is still struggling to shake off the after-effects of the market correction, with pricing still at a non-inflation-adjusted 2003 level.
Negotiability. The negotiability indicators did not reflect what we would expect to be the tightening effects of increased buyer demand. The days-on-market were up over 5% in the quarter, indicating that homes are taking a little longer to sell. And the listing retention rate fell pretty sharply, down to 96.3%, signaling that sellers are discounting more heavily to get into contract.
Going forward, we expect that Passaic County buyer demand will stay strong through the end of the year, but not necessarily at the rate of growth that we’re seeing right now. But the economic fundamentals are good: homes are priced at attractive levels, rates are near historic lows, and the economy is relatively stable. If buyer demand continues to stay at its current rates, we are bound to see some meaningful price appreciation in 2016.