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First Quarter 2016 Real Estate Market Report: Northern New Jersey Market Overview
The Northern New Jersey housing market got off to a strong start in 2016, with sales up again throughout the region. But this sustained surge in buyer demand is not yet having any real impact on pricing, which was flat or down in each of the counties.
Sales were up over 10% for the region, rising in every county in the Report. Closings have now been trending up for about five years, ever since the market stabilized after the correction precipitated by the financial crisis of 2008-09. Although we are not yet at transactional levels that we saw during the last seller’s market of the mid 2000’s, sales are up about 40% from the bottom of the market and are moving in a positive direction.
We are also seeing inventory continue to tighten. The industry measures the impact of inventory by calculating the “months of inventory” remaining on the market: i.e., the number of homes for sale divided by the average monthly transactions. So, for example, if we have 1,000 homes for sale and we close about 100 sales a month, we say that’s about 10 months of inventory. According to industry standards, six months worth of inventory signals a balanced market: any less, and we are likely to see too many buyers chasing too few homes, which will tend to lead to multiple-offer situations, then bidding wars, and ultimately higher prices. Well, right now, we’re starting to see inventory tighten across the region. Bergen, Morris, and Essex are all below the 6-month threshold, and Passaic is right on the cusp. Only Sussex is trailing, but even inventory there is tightening and has dropped from 11.5 months to 9.6 months in the past year.
Even with sales up and inventory down, though, average prices dropped throughout the region. In our last Report, we said that we were seeing the first signs of “green shoots” of price appreciation. Well, in the first quarter, those green shoots withered away. Prices were down throughout the region, in some cases sharply. This was surprising, given that all the other indicators suggest that we should be seeing meaningful price appreciation at this point. It might be that the market is simply stronger in the lower end than the middle or higher end, which is changing the mix of properties sold and skewing the average. Or it could just be a short term blip in the data during the slowest time of the year. Either way, we will keep our eye on it for the next Report, which will cover the spring market and give us a better read on things.
Going forward, we still believe that we are heading for a seller’s market. Sales have now been increasing for almost five years, which has brought inventory to the seller’s market threshold. Basic economics tells us that high demand and declining supply is bound to drive up pricing at some point. The economic fundamentals are all good: homes are priced at 2004 levels (without even adjusting for inflation), interest rates are still near historic lows, and the regional economy is stable. Accordingly, we expect that the price declines in the first quarter were an anomaly, and that the region will experience rising sales and prices through a robust spring market and throughout 2016.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016: Real Estate Market Report: Dutchess Market Overview
The Dutchess County housing market started the year with a massive spike in sales activity, which had only a modest impact on pricing.
Sales. Dutchess County single.family home sales surged again in the first quarter, with transactions up a whopping 43% from last year. This marked the sixth quarter in a row with year on year sales increases, leading to a rolling year where sales were up almost 30%. With 2,300 sales over the rolling year, Dutchess is now closing homes at a rate that rivals what we saw during the last seller’s market.
Prices. In our last Report, we noted that we were starting to see the first “green shoots” of price appreciation in Dutchess. That continued in the first quarter, with the average and median price both up a tick. The rolling year numbers are still not positive, but we think it’s only a matter of time. With these types of sustained increases in sales activity, we are bound to see an impact on pricing this year.
Inventory. We measure inventory by looking at the “months of inventory” that are available, given the current absorption rate of properties on the market. Generally, the industry regards six months of inventory as a demarcation for a seller’s market. In Dutchess, we are nowhere near that, with inventory still above 14 months. But the market is definitely tightening, with the months of inventory falling over 25% in the past year. As inventory tightens, we would expect prices to start going up.
Negotiability. The negotiability indicators show that Dutchess sellers might be starting to get some leverage. Homes were selling for a little closer to the asking price, with the listing retention rate up above 95% for the first time since the last seller’s market. And the days on market fell again, now down below six months, indicating that homes are selling a little more quickly. If homes are selling more quickly, and for closer to the asking price, that means sellers are gaining a bargaining position with buyers.
Condominiums. The condo market was also robust, with sales up over 28% compared to the fourth quarter of last year, and up over 22% for the year. Pricing was disappointing, though, with the average and median down for both the quarter and the year. Inventory continues to tighten, though, which could stabilize pricing in 2016.
Going forward, we believe that if Dutchess continues to see sustained increases in sale activity, we are bound to see meaningful price appreciation by the end of the year. With a stable economy, low-interest rates, and homes still priced at appealing 2004 levels (without even controlling for inflation), we believe that Dutchess is poised for a strong 2016.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Putnam Market Overview
Putnam County sales and prices both spiked in the first quarter of 2016, with transactions again reaching levels we have not seen in over 10 years.
Sales. Putnam sales surged again in the first quarter, with single.family home sales spiking over 35% compared to last year and now up over 21% for the rolling year. Sales have now been going up for over four years, with transactions up in seven straight quarters and 15 out of the last 16. With 976 sales for the rolling year, we’re approaching the 1,000-sale mark that we have not hit since early 2006 at the tail end of the last seller’s market. We saw the same results with condos, with sales up over 35% for the quarter and the year.
Prices. After a disappointing 2015, single.family prices started the new year with a bang, spiking over 12% on average, 10% at the median, and up just a tick in the price-per-square foot. For the rolling year, prices were up at a similarly torrid pace, rising almost 4% on average and 8% at the median. Even though these types of increases are not sustainable, we do believe that Putnam’s pricing will continue to appreciate this year, particularly as inventory continues to tighten.
Inventory. Indeed, the “months of inventory” indicator fell 24% from last year’s first quarter and is now down to under 8.0 months for single.family homes. Obviously, we’re already seeing the impact of the declining inventory on pricing, and we expect that to continue through the spring market.
Negotiability. The negotiability indicators were flat, with both the listing retention rate and the days on market relatively stable. We would expect homes to start selling more quickly and for closer to the asking price as the market heats up.
Condos. The story was different for condos prices, which were down sharply for the quarter, even while the rolling year prices were relatively flat or up slightly. The condo market is very small, though, so it’s prone to skewing by a few outliers.
Going forward, we believe that these levels of buyer demand will continue through a robust spring market, although we do not expect that the spike in prices is sustainable over the long term. The fundamentals of the market, though, are good, with prices still at attractive levels, buyer demand high, interest rates low, and the economy generally improving.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Orange Market Overview
The Orange County housing market finally showed the long awaited signs of meaningful price appreciation in the first quarter of 2016, with prices up significantly for the first time in almost 10 years.
Sales. Orange sales were up yet again, rising 31% from last year and now up over 28% for the rolling year. This was nothing new – we have now seen sustained increases in Orange transactions for almost four years, with sales up six quarters in a row and 15 out of the last 16. Indeed, we are now seeing sales at historically high levels, with Orange closing over 3,000 sales for the rolling year for the first time since 2007 at the tail end of the last seller’s market.
Prices. What’s new is that for the first time in years, we saw some meaningful price appreciation in Orange, with prices up 3% on average, almost 4% at the median, and up just a tick in the price per square foot. This was important because prices had fallen every single calendar year since 2007 – that’s eight straight years of year-on-year price depreciation. As a result, home prices today are down almost 30% from the height of the market. But for the first time, Orange homeowners have reason to be hopeful that the trend is moving in a positive direction.
Negotiability. Certainly, the negotiability indicators support the view that Orange is due for continued meaningful price appreciation. The months of inventory in Orange fell again in the first quarter, dropping below 10 months for the first time in over 12 years. Similarly, the days on market fell again and the listing retention rate went up a full point, showing that homes are selling more quickly and for closer to the asking price – all of which tends to drive price appreciation.
Condominiums. The condo market also surged, rising over 43% for the quarter and up almost 45% for the year. So we have a lot of demand. Unfortunately, we’re not yet seeing that demand impact pricing, which was down across the board. As we’ve noted before, the problem with Orange condos is that they’re priced too close to single.family homes. If we continue to see meaningful appreciation in single.family prices, that will arrest the slide in condo prices.
Going forward, we believe that Orange is finally seeing the light at the end of the dark tunnel it entered in 2008. We expect that demand will stay strong through a robust spring market that will continue to drive meaningful price appreciation through 2016 and for several years to come.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Rockland Market Overview
The Rockland County housing market started the year strong, with increases in both sales and prices that are now reaching levels we have not seen in over 10 years at the tail end of the last seller’s market.
Sales. Rockland sales were up again, rising over 16% from last year’s first quarter and now up over 20% for the rolling year. We’ve now seen sustained rates of growth for almost four years, with transactions up for the last six quarters and 14 out of the last 15. Indeed, sales totals are now approaching “seller market levels,” with the 1,880 rolling year sales the highest total in over 10 years.
Prices. This sustained increase in buyer demand is having its expected impact on pricing, with prices up almost 3% on average and almost 2% in the price.per.square foot, but falling a tick at the median. For the year, the results are more uniform, with prices up about 3% across the board. After the sharp decline following the financial crisis in 2008, and then a few years of bouncing around the bottom, Rockland prices are now starting their fourth year of modest but meaningful appreciation. They still have a way to go before they gain back the losses suffered after the financial crisis of 2008, but they’re trending in a positive direction.
Negotiability. The negotiability indicators showed that sellers are gaining a bit more leverage with buyers. We saw another dramatic decline in the number of homes for sale, for example, with the months of inventory falling over 21% and now reaching the six-month level that usually delineates a “seller’s market.” Similarly, the listing retention rate rose above 96% for the first time since 2006, and the days on market continued to fall. All together, a declining inventory, with homes selling more quickly and for closer to the asking price, tells us that we’re moving into a strong seller’s market.
Condos. The condo market in Rockland continues to struggle. Sales were up, but not as sharply as with single.family homes. And prices were down slightly, indicating that buyer demand in the market is not pushing appreciation. With condo inventory actually rising a bit, we’re not likely to see any meaningful price appreciation in this entry level market anytime soon.
Going forward, we expect a robust spring market that will continue to drive prices and sales upward. With prices still at attractive levels, interest rates low, and the economy generally strengthening, we believe that Rockland will have its best year since the height of the seller’s market.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Westchester Market Overview
The Westchester housing market started 2016 with a surge of activity coupled with a disappointing drop in pricing, continuing a trend we watched for most of last year.
Sales. Market activity is way up, continuing a trend we’ve been watching for over four years. Residential sales rose sharply, up 11% from last year and finishing the calendar year up almost 9%. Year-on-year transactions have now gone up in 16 out of the last 18 quarters. Indeed, the 5,836 single-family, rolling.year sales was the highest 12-month total in almost 10 years, at the height of the last seller’s market.
Prices. Even with this continued strength in buyer demand, though, single.family prices were down across the board: falling almost 7% on average, over 4% at the median, and almost 3% in the price-per-square-foot. And we’ve now seen prices go down for over a year, with the rolling year average dropping almost 4%. What’s going on? We believe that buyer demand is stronger in the lower priced markets, changing the mix of properties sold. Indeed, the price appreciation in the condo and coop markets shows that entry-level demand is strong, which indicates that perhaps we’re also seeing strong demand at the lower price points for single.family homes. We’re just not seeing the same level of activity in the higher priced markets, which is pushing overall pricing averages down.
Inventory. Indeed, the level of inventory available supports the idea that buyer demand is simply stronger at the entry level market. While inventory for single.family homes was relatively flat, we saw another drop in the number of condos and coops available. In other words, the lower end market is sizzling, while the upper end market is more lukewarm.
Negotiability. The negotiability indicators were a bit mixed. The days on market fell significantly, dropping to about six months for all property types. The listing retention rate was basically flat, though, indicating that sellers have not yet taken a commanding negotiating position with buyers.
Going forward, even with the current downward trend in pricing, we believe that the Westchester market is poised for a robust spring market. With inventory at a 10-year low, prices still at attractive levels, interest rates near historic lows, and a generally improving economy, we expect that the strength in the lower end of the market will expand throughout all price ranges.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
First Quarter 2016 Real Estate Market Report: Westchester & Hudson Valley Market Overview
The Westchester and Hudson Valley regional housing market in the first quarter of 2016 picked up where 2015 left off, with another surge in sales activity that is still not yet having a widespread impact on home prices. With inventory declining throughout the region, though, we believe that we will start seeing meaningful price appreciation before the end of the year.
In our last Rand Report, we welcomed readers to the next “seller’s market,” predicting that 2016 would be marked by increasing sales, declining inventory, and rising prices. So far, we’re right on two out of the three predictions: sales continue to go up, inventory continues to go down, but prices have not yet taken off throughout the region.
Sales. Activity continues to surge across the region. Transactions were up in every single county in the Report, and collectively rose over 23% compared to the first quarter of last year and over 18% for the rolling year. This is nothing new – we’ve been watching sales go up quarter after quarter for over four years, with regional transactions rising in 15 out of the last 17 quarters. Indeed, the region closed over 14,000 single-family sales over the past 12 months, which is the highest rolling year total since the middle of 2006 – at the tail end of the last seller’s market.
Inventory. Available inventory continues to tighten throughout the region. In the real estate industry, we measure inventory levels by looking at the “months of inventory” available at any given time on the market, and consider anything under six months of inventory as an indicator of a “seller’s market.” Well, we are not yet under six months in any of our regional markets, but we’re getting close, with Westchester, Putnam, and Rockland all under eight months. More importantly, inventory is tightening across the board, down sharply in most of the counties.
Prices. You’ll notice on the accompanying graph that regional sales prices have been ticking down for the past year, and went down again in the first quarter. How can that be? Why would prices be going down even while sales and inventory are going up? Well, the explanation is that it’s just an optical illusion. Don’t believe your lying eyes – prices are actually rising.
Here’s why: right now, the market is strongest in the lower.priced markets, which is disproportionately increasing the number of lower priced sales and thereby skewing the pricing. We see that most clearly in the countywide numbers, with sales up much more sharply in the lower priced markets. While sales in the highest priced market in Westchester are up only 9%, the other regional markets are spiking: Putnam up 21%, Rockland up 20%, Orange up 28%, and Dutchess up 29%. As a result, Westchester sales accounted for only 36% of the sales in the region in the first quarter of this year, compared to 40% last year and as much as 50% in prior years. So it follows that if higher priced Westchester sales are making up a smaller part of the overall transactional mix, then the average price for the region is going to drop.
Indeed, the average price was up in four out of the five counties in the region: rising 12% in Putnam, 3% in Rockland, 3% in Orange, and up just a tick in Dutchess. Prices were only down in – you guessed it! – Westchester, and we believe it’s for the exact same reason: strength in the lower end of the market. Even within Westchester, the demand was much stronger in the entry-level coop and condo markets, which had higher sales increases, rising prices, and lower levels of inventory. It follows that if the condo and coop markets were so strong, then the lowest end of the single.family market was probably also a lot more active than the middle or high end. So don’t read too much into the regional price drop, or even the decline in Westchester single-family homes.
Going forward, we expect a robust spring market. All the fundamentals point to a burgeoning “seller’s market,” with demand high, inventory falling, interest rates low, and a generally improving economy. Accordingly, we expect that sales will continue to go up, and that the strength in the lower priced markets will gradually extend throughout all price points.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
So What’s Going on in the Sussex County Real Estate Market?: The Rand Quarterly Market Report for 2015Q4
The Sussex County housing market surged in the fourth quarter, with a dramatic spike in sales that continued a yearlong trend of markedly higher transaction rates. Nevertheless, we are still not seeing these sustained levels of buyer demand have their expected impact on pricing.
Sales. Sussex sales were up sharply in the fourth quarter, rising almost 39% from last year and finishing the year up almost 18%. Indeed, Essex closings have now gone up in each of the last four years, during which sales have now increased by almost 80% from their 2011 levels at the bottom of the market. With sustained levels of buyer demand, the market is in much stronger shape than it has been at any time since the 2008-09 market correction.
Prices. This spike in sales, though, has not yet had an impact on pricing, which has actually deteriorated, even while buyer demand increased. Average and median sales prices were down for both the fourth quarter and the full calendar year, which was a little disappointing given the transactional strength in the market. Moreover, prices have been trending downward now for several years, in defiance of what we would expect from normal economic behavior. Generally, it takes time for increases in demand to drive pricing changes, so we believe this will turn around if buyer demand remains at its current levels.
Negotiability. The negotiability indicators – the amount of time sold homes were on the market, and the rate at which sellers were able to retain their full asking price – were mixed. The days-on-market fell dramatically in the quarter, dropping over 13% — and almost a full month! For the year, the market time was down as well, although not as significantly. But we didn’t see the same dynamic in the listing retention rate, which actually fell a bit for the quarter and was flat for the year. Generally, we expect that as buyer demand heats up, homes will sell more quickly and for closer to the asking price. We’re starting to see quicker sales, but nothing that would indicate that sellers are gaining leverage in their negotiations with buyers.
Going forward, we do expect better things for the Sussex market. We believe that buyer demand will stay strong through 2016, especially with a relatively strong economy, homes priced at attractive levels, and near-historically low interest rates. And if buyer demand stays at its current levels, we expect that Sussex will start to see some meaningful price appreciation by the end of the year.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
So What’s Going on in the Essex County Real Estate Market?: The Rand Quarterly Market Report for 2015Q4
The Essex County housing market closed the year with a modest increase in sales and some mixed results in pricing. For the year, sales were up fairly significantly, but we’re still not seeing any meaningful price appreciation.
Sales. Essex sales were up in the fourth quarter, rising over 4% from last year and finishing the year up almost 10%. Indeed, Essex closings have now gone up in each of the last four years, during which sales have now increased by over 50% from their 2011 levels at the bottom of the market. The market is in much stronger shape than it has been at any time since the 2008-09 market correction, with sustained levels of buyer demand.
Prices. This jump in sales, though, has not yet had an impact on pricing, which remains relatively flat over the past three years. We are seeing pricing about 8% higher than at the bottom of the market, but we haven’t seen any movement over the past three years, even while transactions went up. Generally, it takes time for increases in demand to drive pricing changes, so we believe it’s just a matter of time before we start to see meaningful price appreciation in Essex.
Negotiability. The negotiability indicators – the amount of time sold homes were on the market, and the rate at which sellers were able to retain their full asking price – were essentially flat. The days-on-market fell slightly in the quarter and for the year, indicating that homes were selling just a bit quicker, and the listing retention rate was up a little for both the quarter and the year, but neither indicator moved in a way that would dramatically affect the negotiating balance between buyers and sellers.
Going forward, we expect that buyer demand will stay strong through 2016. With a relatively strong economy, homes priced at attractive levels, and near-historically low interest rates, we believe that we will start to see some meaningful price appreciation by the end of the year.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
So What’s Going on in the Morris County Real Estate Market?: The Rand Quarterly Market Report for 2015Q4
The Morris County housing market sagged a bit in the fourth quarter, with only a modest increase in sales and basically flat prices. For the year, sales were up slightly, but we are still not seeing any meaningful price appreciation.
Sales. Morris County sales were essentially flat for the fourth quarter, rising 1.5% and finishing the year up 7.6%. This did mark the fifth straight quarter of year-on-year sales growth, and the market closed over 5,500 sales for the calendar year for the first time since the height of the seller’s market, so things are moving in the right direction. But compared to the other northern New Jersey county markets, Morris’s 2015 performance was relatively tepid.
Prices. Similarly, Morris pricing continued the trend of bouncing around a bit. For the quarter, the average price was up a tick and the median was down slightly. And for the year, the average was up and the median flat. That’s what we’ve basically seen over the last few years: prices up one quarter, down the next, the average up but the median down, etc. We’re not getting any clear read on where pricing in Morris is going, except that we remain confident if buyer demand continues to grow it will eventually start pushing prices up.
Negotiability. The negotiability indicators – the amount of time sold homes were on the market, and the rate at which sellers were able to retain their full asking price – were basically flat. The days-on-market rose slightly in the quarter and for the year, indicating that homes were taking just a little longer to sell. But sellers were getting slightly closer to the asking price, with the listing retention rate up a bit for both the quarter and the year. Again, like with sales and prices, the results were basically “meh” – no clear trend, no major movement one way or the other.
Going forward, despite the relatively lackluster results in 2015, we still believe Morris County is poised for serious growth. With homes still at historically affordable prices, interest rates low, and a generally improving economy, we expect that buyer demand will strengthen and drive more meaningful price appreciation in a robust spring market and throughout 2016.
To learn more about Better Homes and Gardens Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
