The Morris County housing market slowed down in the first quarter of 2019, with sales falling sharply. Transactions were down almost 12% from last year’s first quarter, finishing a rolling year in which they were down almost 4%. We still saw some modest price appreciation, with the average price rising about 2% for the quarter, but up only a tick for the rolling year. 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 Morris 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 markets like Morris and its high-priced neighboring counties like Bergen, Essex, Hudson, and Westchester County in New York. 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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