Strong demand in the Bronx housing market in the second quarter of 2019 drove pricing up even while limited inventory stifled sales growth.

Pricing. Overall pricing was up 14.5% compared to the second quarter of last year, and up for most property types: rising a whopping 32% for single‑family homes, 4% for multi‑families, and 11% for condos. The exception was pricing for cooperative apartments, which fell about 9% for the quarter – even while it was up over 2% for the rolling year.

Sales. We saw much the same story in sales, which were up 3% for single‑families, 9% for multi‑families, and 10% for condos – but, again, were down for coops, by almost 20%. We do not see why coops would be behaving so differently from other property types, so we will keep an eye on this for the third quarter.

Inventory. The number of homes for sale was up in most property types, with homeowners responding to the attraction of rising prices. Inventory is still, though, in the 5‑6 month range for most property types, a level that usually indicates a seller’s market.

Outlook. Going forward, we believe that Bronx sellers and homeowners have reason to be optimistic about where the market is going. The fundamentals are very strong: the economy is growing, inventory is still low, interest rates are near historic lows, and demand is strong. We expect that, even with the challenges of a slowdown in Manhattan, the Bronx market will grow through the summer and fall, with both sales growth and price appreciation

After sizzling throughout 2018, the Hudson County housing market continued to slow down in the second quarter of 2019. Sales were down over 6% overall from last year’s second quarter, and now down 6% for the rolling year. But this decline in sales did not have a dramatic effect on pricing, which was up about 4% overall and rising across the board: up 5% for single‑family homes, over 5% for multi‑families, and up 3% for condos. 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, who are more likely to itemize their deductions and feel the pinch. And we are certainly seeing some reverberations from the slowdown of the Manhattan market. 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, low interest rates, and low levels of inventory. Accordingly, we expect to see a relatively robust summer and fall market in Hudson County.

The Sussex market slowed considerably in the second quarter, with sales down even while pricing was more positive. Transactions were down sharply, falling 13% for the quarter and now down over 8% for the rolling year. But the drop in sales clearly did not indicate a lack of demand, with median pricing up over 5% for the quarter and almost 4% for the year. More importantly, inventory has finally come down to manageable levels, even though it’s still not at the 6‑month level that denotes a sellers’ market. Going forward, we believe that the seller market fundamentals are strong: a growing economy, prices well below historic highs, low interest rates, and low levels of inventory. So we expect to see continued appreciation and maybe even some sales growth in a robust summer and fall market

Sales in the Essex housing market went up again in the second quarter of 2019, and finally started to drive some meaningful price appreciation. Sales rose over 8% for the quarter, and finished the rolling year up over 5%. And this sustained increase in sales is finally having an impact on pricing, which was up over 2% on average and almost 4% at the median. The rolling year pricing is still relatively flat (down 1% on average, up 2% at the median), but the trend is positive for Essex sellers and homeowners. Still, 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 Essex County homeowners and home buyers, who are more likely to itemize their deductions and feel the pinch. 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.

The Morris County housing market stumbled through the second quarter of 2019, with both prices and sales down slightly. Transactions were down almost 5% from last year’s second quarter, finishing a rolling year in which they were down almost 4%. Pricing was generally flat, with the average price falling about 1% for the quarter, almost perfectly flat 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. 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

Sales in the Passaic housing market slowed down in the second quarter of 2019, even while strong demand continued to push prices up. We continue to clear signs of a thriving seller’s market. Prices are still going up, with the average price rising almost 1% for the quarter and over 3% for the rolling year. And while relatively low levels of inventory are still holding back sales growth, causing a 6% decline in transactions this quarter, that inventory is starting to creep up as homeowners seeing prices go up are getting tempted into the market. Going forward, we expect that higher levels of inventory will drive more sales growth, but that strong demand will continue to push prices higher. The market fundamentals are strong, with prices still below historic highs, interest rates low, and the economy thriving, so we expect both sales and price growth in the summer and fall markets.

Sales growth in the Northern New Jersey housing market was suppressed by both a continued lack of inventory and the impact of the 2018 Tax Reform SALT Cap, but we did see modest but meaningful price appreciation in many county-wide markets. We believe that the market is still poised for both sales and price growth in what will be a strong summer and fall market.

Regional sales were down slightly, but the results varied by county. Regional single‑family sales fell about 3% for the quarter, finishing a rolling year in which they were down a little over 2%. But that cumulative number masked a real divergence in the county results. For example, sales were down in Bergen, Hudson, Passaic, Morris, and Sussex, but up for Bergen condos and Essex.

Similarly, prices were up a tick regionally, but results varied sharply depending on the county. For the region, the average price was up 1.2% for the quarter, finishing a rolling year where they rose by 2.1%. But, again, those cumulative regional results do not really tell the story, since pricing compared to last year’s second quarter varied dramatically by county: prices were up in Hudson, Passaic, and Essex, but down in Bergen, Morris, and Sussex. The rolling year pricing was a little more positive, with most markets showing longer‑term appreciation.

We still believe that this market is poised for significant growth. The sluggishness in sales is not due to a lack of inherent demand, but is being cause by two factors: first, a lack of inventory, which is ticking up but remains at relatively historic lows; and second, the 2018 Tax Reform cap on state and local taxes (“SALT Cap”), which is impacting buyers who usually itemize their taxes and are skittish of extending themselves. We think that both issues will ease up as homeowners tempted by rising pricing put their homes up for sale, and the SALT Cap gets priced into the market.

Going forward, we think that both sales and prices will go up by the end of the year. We expect the impact of the SALT Cap to get priced into the market, because otherwise the seller market fundamentals are very strong: the economy is growing, interest rates are near historic lows, inventory is relatively low, and homes are still priced well below their highs. Accordingly, we expect a relatively robust spring market throughout the region.

The Bergen County housing market was flat through the second quarter of 2019, with both sales and pricing tracking close to last year. Single‑family home sales were down about 2%, while condo sales were up about 2%. Similarly, pricing was mixed, with both single‑family home and condo prices falling about 1% on average. We believe that the market is being hampered by both a lack of viable inventory and the 2018 Tax Reform cap on state and local tax deductions (the “SALT Cap”), which hits particularly hard in higher‑priced markets like Bergen. Going forward, though, we believe that inventory will slowly rise, and that the SALT Cap impact will eventually get priced into the market. With prices still lower than the height of the market, interest rates near historic lows, and a growing economy, we believe that Bergen is poised for sales and price growth through the summer and fall.