The Passaic County housing market rose again in the second quarter of 2017, with sales up and prices continuing to show some signs of meaningful appreciation.
Sales. After a dramatic start to the year, Passaic pulled back just a little, but sales were still up over 8% for the quarter and are now up almost 13% for the rolling year. We’ve now seen sustained increases in buyer demand for over five years, with quarterly sales up in 22 out of the last 24 quarters. As a result, Passaic closed over 3,500 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 their first impact on pricing. Prices were up across the board, rising over 1% on average and almost 2% at the median. Prices are still flat or down for the year, due to the lackluster performance in most of 2016, but they seem to be finally heading in a positive direction. With buyer demand strong, and inventory falling, we would expect prices to continue to rise.
Inventory. The Passaic inventory of available homes for sale fell again, down over 31% from last year. 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 Passaic is now down to just over six months of inventory is important, since it presages the possibility of price appreciation for the rest of the year.
Negotiability. Sellers continued to gain negotiating leverage, with homes selling more quickly and for closer to the asking price. The days-on-market fell again, dropping over 10% and now down to almost four months on the market. And the listing price retention rate jumped almost two percentage points, and is now up over 98%.
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 Summer market and throughout 2017.