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.