The Bergen County housing market coasted through the first quarter of 2019, with prices flat but sales up modestly. For the quarter, single-family sales rose almost 3%, but the average price was down just a tick. The single-family market has been slowly cruising along for the past year, with little sales growth and only about 1% of price appreciation, which is a little disappointing considering the market fundamentals. We might be seeing some impact from the 2018 Tax Reform’s $10,000 cap on state and local tax deductions (SALT Cap), which particularly affected higher-income taxpayers like Bergen County homeowners and home buyers, who are more likely to itemize their deductions and feel the pinch. We expected that the SALT Cap might have an impact on housing, and we’re certainly seeing that throughout the region in higher-priced markets like Bergen and its neighbors in Hudson, Morris, and Westchester County in New York. Indeed, that might explain why the Bergen condo market has been more robust, with rolling year sales up over 3% and prices up 7% — condo home buyers are more likely to claim the standard deduction, rather than itemize, so they’re not affected by the SALT Cap. Going forward, though, we expect that the SALT Cap’s impact will eventually get priced into the market, and believe that the seller market fundamentals are strong: a growing economy, prices well below historic highs, low interest rates, and low levels of inventory.
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