Prices in the Morris County housing market showed meaningful signs of appreciation in the second quarter of 2017, even while low levels of inventory stifled sales growth.
Sales. Morris County sales were up slightly, rising over 3% from the second quarter of last year. This continued a streak in which year-on-year sales have now gone up for 11 straight quarters, almost three years of sustained buyer demand. For the year, sales were up over 6%, and are now up over 60% 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 we saw in the first quarter, prices were up, this time by about 3% on average and at the median. For the year, prices are up slightly, demonstrating that we might be seeing the first meaningful and lasting Morris price appreciation in years. We believe that sustained 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 31% from last year’s second quarter and now down to just over 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 close to that six-month mark indicates that we could be in for some meaningful price appreciation throughout 2017.
Negotiability. The negotiability indicators showed that sellers are starting to gain negotiating leverage with buyers. The days-on-market indicator was down by 10 days, falling almost 8%, indicating that homes were selling more quickly. And the listing price retention rate continues to rise, now up to just about 98% for the quarter and the year, 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 robust Summer market and a strong 2017.