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So What’s Going on in the Market?: The Rand Quarterly Market Report for the Northern New Jersey Region for 2015Q4
The Northern New Jersey housing market finished 2015 in a flourish, with sharp increases in sales and emerging signs of meaningful price appreciation. As 2016 begins, the region seems to be moving into a fully-realized seller’s market that will be characterized by declining inventory, increasing sales, and rising prices.
Sales were up over 8% 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, the number of homes sold in 2015 was about 40% higher than at the bottom of the market.
Although prices were basically flat, they showed signs of emerging “green shoots.” The regional sales price was up less than 1%, but it did mark the third straight year of rising prices, even though the increases have been marginal. On the other hand, pricing is now about 8% higher than at the bottom of the market, so the trend is generally positive. Interestingly, pricing was stronger in the middle of the market, with mid-priced counties like Passaic generally faring a little better than higher-priced areas like Bergen or Morris.
Most importantly, we are starting to see a tightening of inventory. 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 markets that are under 10 months of inventory, with some trending toward six months, signaling that we are moving into a tighter market.
Going forward, we believe that we are heading for a seller’s market. Sales have now been increasing for almost five years, and at some point that increased buyer demand is going to start driving down inventory and driving up pricing. 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 region will experience rising sales and prices through a robust spring market and throughout 2016.
Editor’s Note: We are delighted to present this comprehensive Report on the Northern New Jersey housing market for the first time. Although we have been providing reports to our clients on the Bergen, Passaic, and Morris County markets for several years, we are now expanding our focus to also cover Hudson, Essex, and Sussex Counties.
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 Dutchess County Real Estate Market?: The Rand Quarterly Market Report for 2015Q4
Dutchess finished the year strong, with a nice increase in sales activity coupled with the first small signs of meaningful price appreciation. For the year, sales were up sharply while prices were basically flat.
Sales. Dutchess County single-family home sales surged again in the fourth quarter, with transactions up 11% from last year. This marked the fifth quarter in a row with year-on-year sales increases, ending a year where closings were up almost 25%. Indeed, the 2,140 yearly sales represented the highest calendar year total since 2006, at the tail end of the last seller’s market.
Prices. For the first time, we are starting to see some “green shoots” of price appreciation in Dutchess, with both average and median prices up, compared to the fourth quarter of last year. For the calendar year, average prices were down a tick while the median was basically flat, but we believe that the sustained increases in buyer activity we’re seeing in Dutchess are bound to have an impact on pricing in 2016.
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 to almost 95%. And the days-on-market remains down below six months for the year, indicating that homes are selling a little more quickly. As sellers gain negotiating leverage, we would expect prices to go up.
Condominiums. The condo market was robust, with sales up over 31% compared to the fourth quarter of last year, and up over 20% for the year. And although prices were down sharply for the year, they spiked this quarter, indicating that we might be seeing odd fluctuations from outliers in a relatively thin market.
Going forward, we believe that with a stable economy, interest rates near historic lows, pricing at 2004 levels, and increasing buyer demand, Dutchess is poised for meaningful price appreciation in 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.
So What’s Going on in the Putnam County Real Estate Market?: The Rand Quarterly Market Report for 2015Q4
Activity in Putnam surged in the fourth quarter of 2015, with sales up sharply, hitting levels we have not seen in over ten years. And although prices took a dip in the quarter, they were relatively flat for the year.
Sales. Putnam sales surged again in the fourth quarter, rising almost 12% from last year and up almost 21% for the year. Indeed, we have now seen sustained growth in Putnam sales for four years, with closings up for six straight quarters and 14 out of the last 15. And we are now seeing sales totals creep up to the seller market levels, with the 918 calendar sales being the most since 2005.
Prices. Pricing was disappointing, with the quarterly price down across the board after a robust showing in the third quarter. Indeed, for the year, prices were down just slightly, after rising for the past two calendar years.
Negotiability. The good news for prices came in the inventory numbers, which were down sharply. The months-of-inventory fell almost 21% from last year, down to below 9.0 months for the first time in over 10 years. With inventory tightening, we would expect negotiability to decline, which would tend to drive prices up as buyers chase fewer opportunities and homes sell more quickly and for closer to the asking price.
Condominiums. The condo market was similarly up, rising over 22% for the quarter and over 30% for the year. In this case, though, the surge in activity has already been felt in the pricing, with the average up over 11% for the quarter and over 9% for the year.
Going forward, we believe that these levels of buyer demand coupled with a declining inventory are likely to drive some meaningful price appreciation in a robust spring market and through 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 Orange County Real Estate Market?: The Rand Quarterly Market Report for 2015Q4
Orange County surged again in the fourth quarter of 2015, with sales reaching levels we have not seen in over ten years, but this rising demand has not yet had its expected impact on pricing.
Sales. Orange County sales spiked again, rising 20% from the fourth quarter of last year and up 29% for all of 2015. We have now seen sustained sales growth for more than three years, with transactions up five quarters in a row and 14 out of the last 15. Indeed, we are now seeing sales at historically high levels, with the 2,843 yearly sales the most in any calendar year since 2006, at the height of the last seller’s market.
Prices. Unfortunately, we have not yet seen these sustained increases in buyer demand have an impact on pricing, with the average and median price both finishing the year down from 2014. Prices are now down to 2002-03 levels, having retained the price appreciation enjoyed from 1998-2003, but giving back everything in the “bubble years” from 2004-07.
Negotiability. We measure “negotiability” by looking at the inventory on the market, how quickly homes are selling, and how much sellers are discounting off their last listed price. By those measures, the only clear indication of increasing seller leverage is in the listing inventory, which fell to 10.0 months-of-inventory, the lowest level we have seen in about 10 years. If inventory continues to tighten, we would expect that buyers chasing reduced opportunities will drive prices up.
Condominiums. The condo market also surged, rising 20% for the quarter and up 28% for the year. Even with demand strong, though, we’re seeing even more pressure on prices in the condo market, with prices down again for the quarter and the year. With a narrow gap (about $80,000) between single-family and condo prices, and with rates at their current levels, many entry-level buyers can afford to stretch to get into a single-family home. That’s having a depressing effect on condo prices, and it won’t get better until single-family home prices start to rise.
Going forward, we believe that demand will continue to drive sales up through a robust spring market, but expect that we will need to see continued tightening in the inventory to drive any meaningful price appreciation in 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.
So What’s Going on in the Rockland County Real Estate Market?: The Rand Quarterly Market Report for 2015Q4
Rockland sales surged again in a torrid end to 2015, with sales reaching levels we have not seen in over 10 years and prices showing meaningful signs of appreciation.
Sales. Rockland sales were up sharply, rising 26% from the fourth quarter of 2015 and up over 20% for the calendar year. We’ve now seen sustained rates of growth for over three years, with transactions up for the last five quarters and 13 out of the last 14. Indeed, sales totals are now approaching “seller market levels,” with the 1,830 yearly sales the largest calendar year total since 2004.
Prices. The Rockland average sales price rose in 2015 for the third straight year, up over 3% after more modest increases in 2013 and 2014. Although prices are still a long way from recouping the 25% plunge from 2008-09, and are still at 2004 levels (without adjusting for inflation), pricing is definitely moving in a positive direction.
Negotiability. The negotiability indicators were a little mixed, but the inventory numbers were startling. As of the close of 2015, Rockland had about 6.7 months of single-family inventory, the lowest level we have seen in over 10 years and tantalizingly close to the six-month level that signals a “tight” market. Similarly, the listing retention rate hit 96% for the first time since the market correction in 2008, indicating that sellers are gaining leverage when negotiating to get their asking price with buyers.
Condos. The condo market was not quite as robust, with sales up slightly for the quarter, but flat for the year. Prices were up on average, though, and inventory fell to about 7.4 months, so we might be seeing the beginning of some meaningful price appreciation in this entry-level market.
Going forward, we expect that Rockland is going to show signs of a fully realized seller’s market in 2016, with inventory at 10-year lows continuing to drive meaningful price appreciation in a robust spring market and through 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 Westchester Real Estate Market?: The Rand Quarterly Market Report for 2015Q4
Westchester activity surged in the fourth quarter, with sales up sharply for both single-family homes and condominiums, even while prices remained stubbornly soft.
Sales. Residential rose sharply, up over 13% from last year and finishing the calendar year up almost 8%. We’ve now seen sustained sales growth for four full years, with year-on-year transactions going up in 15 out of the last 17 quarters. For the 2015 year, Westchester closed over 5,700
single-family homes, the highest calendar year total since 2005, at the height of the seller’s market.
Prices. Even with these higher levels of activity, prices were down across the board, finishing a year in which the average price dropped over 3%. While that was disappointing to Westchester homeowners, we note that prices got a little ahead of themselves in 2014, spiking 7% in one year, and the average price is still about 4% higher than it was in 2013.
Negotiability. Although the days-on-market and listing retention rates were basically flat for the quarter and the year, we did see a sharp decline in inventory levels, with the “months-of-inventory” level falling to 5.1 in the quarter and 7.1 for the rolling year – the lowest levels we have seen in over ten years. (In comparison, we had over 17 months of inventory in the middle of 2009, at the bottom of the market).
Condos & Coops. Activity in the condo and coop markets were both strong, with sales up sharply but prices down. Inventory levels have really dropped for this entry-level market, though, with condos falling all the way to 3.9 months of inventory.
Going forward, we believe that the Westchester market is poised to transition to a full-blown seller’s market in 2016, with inventory at 10-year lows driving meaningful price appreciation through what will be a robust spring 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.
So What’s Going on in the Market?: The Rand Quarterly Market Report for Westchester and the Hudson Valley Region for 2015Q4
The Westchester and Hudson Valley regional housing market finished 2015 strong, with another surge in activity that drove sales up almost 17% for the year. And although this sustained increase in buyer demand has not yet had its expected impact on pricing, declining levels of inventory are now signaling that meaningful price appreciation is imminent.
In other words – welcome to the seller’s market! As we have noted before in this Report, our housing market tends to run in approximately 15-year cycles from the beginning of a seller’s market to the end of a buyer’s market. We saw this cycle play out from 1981-1997, with prices and activity rising for about seven years through most of the 1980s (the “seller’s market”) and then falling for about eight years from 1989-1997 (the “buyer’s market”). And we saw it again in another 15-year period from the seller’s market that started in the late 1990s, ran through the crash of 2008-09, and then transitioned to the buyer’s market that ran through the past few years.
Well, as we come into 2016, we are now on the cusp of a new cycle, a seller’s market that has been slow to develop over the past few years, but is now showing real signs of taking off. Here are some of the reasons why:
First, sales activity has now been generally up for over four years. Year-on-year sales have now gone up for 14 out of the past 16 quarters, culminating in almost 13,500 single-family sales this year – the highest total we have seen since the height of the last seller’s market in 2005. By comparison, yearly regional closings routinely fell below the 10,000 sale mark after the market correction in 2008.
Second, inventory levels have dropped significantly, with some markets going below the crucial six-months-of-inventory mark. We measure inventory levels by looking at the “months of inventory” available at any given time on the market, which we calculate by taking the number of homes on the market and dividing them by the average number of homes that are selling every month. So, if we have 1,000 homes on the market, and we are selling about 100 homes on average every month, we say that we have about 10 “months of inventory.” According to industry standards, about six months of inventory signals a “balanced” market: anything less, and buyers chasing scarcity are likely to create bidding wars that will drive prices up. And for the first time in about 10 years, we’ve seen one of our markets go under six months of inventory, with Westchester single-family homes at about 5.1 and condos at about 3.9. The other markets are above six months, but they are definitely trending downward and are hitting levels we have not seen since the last seller’s market.
Third, as a result of declining inventory and rising demand, we are starting to see some “green shoots” in pricing at the county level. It doesn’t look like much, particularly since the overall regional price fell this year due to some regression in Westchester, but we are seeing a slight upward trend in most of the counties over the past several years. It takes time for changes in activity to impact pricing, but basic economics tells us that four years of rising sales coupled with a declining inventory should drive prices up.
Going forward, we expect that 2016 will mark the clear beginning of a fully realized seller’s market. The economy is in reasonably good shape, interest rates are still near historic lows, and homes are now priced pretty attractively given that they’re still at 2003-04 levels without adjustments for inflation. So we see no reason why buyer demand would fall off from its current levels. And unless we see a flood of new inventory hitting the market, those buyers are going to be chasing a declining number of homes for sale, which is likely to drive prices up in a robust spring market and through 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 2015Q3
The Morris County housing market softened a bit in the third quarter, with sales up modestly but prices a little flat. Over the longer-term, we’re seeing sustained increases in buyer demand that are likely to have a meaningful impact on prices by 2016.
Sales. Morris County sales were up modestly in the second quarter, rising 5.7%. This marked the fourth straight quarter with year-over-year sales growth, capping a rolling year where sales were up 9.4%. Indeed, the 1,768 quarterly sales and the 5,492 yearly sales represented the highest totals since the height of the seller’s market. Clearly, buyer demand in Morris remains robust.
Prices. This continued surge in sales activity, though, has not had a sustained impact on pricing. We’ve seen Morris pricing bouncing around for the last year or so – up one quarter, down the next. And this was a down quarter, with the average falling 2.6% and the median down 1.6%. Over the longer-term, though, the trend is encouraging, with the rolling year average price up 1.5% and the median up 1.3%. If buyer demand continues to strengthen, it’s just a matter of time before we see more meaningful price appreciation.
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 was up a tick for the quarter, but down for the year. And the listing retention rate was up just slightly for both the quarter and the year.
Going forward, we expect that the Morris County market will continue to grow through the end of the year and into 2016. With homes still at historically affordable prices, interest rates low, and a generally improving economy, we believe that buyer demand will stay strong and drive more meaningful price appreciation by the spring market of next 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 Passaic County Real Estate Market?: The Rand Quarterly Market Report for 2015Q3
The Passaic County housing market surged in the third quarter of 2015, with sales activity up dramatically but prices relatively flat. If we continue to see these kinds of increases in buyer demand, though, it’s only a matter of time before Passaic experiences meaningful price appreciation.
Sales. Passaic sales were up dramatically in the second quarter, rising 22.3% from last year, marking the fourth straight quarter of year-over-year sales growth. Indeed, we’ve now seen sustained increases in buyer demand for over four years, with quarterly sales up in 16 out of the last 18 quarters. The 932 quarterly sales marked the highest total since the height of the seller’s market, and the 2,898 rolling year sales were more than in any calendar year since 2006.
Prices. Even with this continued increase in buyer demand, though, we’re not yet seeing a meaningful sustained impact on pricing. For the quarter, pricing was mixed, with the average down 0.2% and the median up 3.3%. For the year, the results are a little more encouraging, with average up just a tick and the median up almost 2%. Passaic is still struggling to shake off the after-effects of the market correction, with pricing still at a non-inflation-adjusted 2003 level.
Negotiability. The negotiability indicators did not reflect what we would expect to be the tightening effects of increased buyer demand. The days-on-market were up over 5% in the quarter, indicating that homes are taking a little longer to sell. And the listing retention rate fell pretty sharply, down to 96.3%, signaling that sellers are discounting more heavily to get into contract.
Going forward, we expect that Passaic County buyer demand will stay strong through the end of the year, but not necessarily at the rate of growth that we’re seeing right now. But the economic fundamentals are good: homes are priced at attractive levels, rates are near historic lows, and the economy is relatively stable. If buyer demand continues to stay at its current rates, we are bound to see some meaningful price appreciation in 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.
So What’s Going on in the Bergen County Real Estate Market?: The Rand Quarterly Market Report for 2015Q3
The Bergen County housing market continued to gain momentum in the third quarter of 2015, with sales up sharply and modest price growth. If buyer demand continues to grow, it’s only a matter of time before we start seeing more meaningful price appreciation.
Sales. Bergen single-family home sales surged again in the third quarter, rising 14.1% for the quarter and now up 9.0% for the rolling year. This marked the fourth straight quarter that year-over-year sales were up, and the second time we saw a double-digit increase. Indeed, we are starting to see transactions at “seller market” levels, with the 5,999 rolling year sales higher than any full calendar year since 2006.
Prices. With these sustained increases in buyer demand, we’re also seeing some upward pressure on pricing. Prices were up for the quarter, rising 2.5% both on average and at the median. We’re also starting to see meaningful price appreciation over the longer-term, with the rolling year average sales price up 2.3%. Overall, the market has recovered from the bottom, with the $572,775 rolling year average price higher than the calendar year price for any year since the market correction in 2008.
Negotiability. The negotiability indicators were a little mixed. Homes were getting into contract more quickly, with the days-on-market falling 7.7% for the quarter. But the listing retention rate fell a bit to 96.2%, indicating that sellers are not able to command offers closer to their asking price.
Condos & Coops. The Bergen condo market was up, but not as sharply as the single-family market. Quarterly sales were up 4.6%, but pricing was mixed. For the year, sales are basically flat (up 1.2%), and pricing is up just a tick. We expect that if the single-family market takes off, the condo market will follow.
Going forward, we remain bullish that the Bergen County housing market is moving in the right direction. Buyer demand is strong, which is driving up sales and starting to have a meaningful impact on pricing. With pricing close to 2004 levels, rates near historic lows, and the economy relatively stable, we expect demand to stay strong through the end of the year and into 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.
