First Quarter 2019: Real Estate Market Report – Northern New Jersey

The Northern New Jersey housing market slowed a bit in the first quarter of 2019, with sales down and prices flat. But we believe that the market is still poised for sales growth and price appreciation in what will be a relatively robust spring market.

Regional sales were down, but the results varied by county. Regional single-family sales fell about 4% for the quarter, but that cumulative number masked a real divergence in the county results. For example, sales were down in Hudson, Passaic, Morris, and Sussex, but up in Bergen and Essex. The most significant slowdown was in Hudson, where overall sales fell almost 15% from last year’s first quarter, probably due to the sharp downturn in the neighboring Manhattan market.

Similarly, prices were up a tick regionally, but results were much stronger in lower-priced markets. For the region, the average price was up about 0.5% for the quarter, below the yearlong appreciation of 2.2%. But, again, those cumulative regional results do not really tell the story, since price appreciation varied dramatically by county. For the quarter, the average price fell in all the higher-priced markets—Hudson, Bergen, Morris, and Essex– but rose in the lower-priced counties– Passaic and Sussex. (The results were a little stronger if we look at the rolling year, where every market but Essex saw at least modest price appreciation).

Essentially, we are seeing a “tale of two markets,” with price appreciation higher in lower-priced markets and property types. We believe this divergence has been caused by the 2018 Tax Reform’s cap on state and local tax deductions (“SALT Cap”). When the tax code implemented Tax Reform, we speculated that the SALT Cap might have a more significant impact on higher-end markets. Why? Because taxpayers in those markets are more likely to itemize their taxes and thereby feel the pinch of the $10,000 SALT Cap. But in the lower-priced markets, homeowners and buyers are more likely to be at income levels where they tend to take the standard deduction, meaning that the SALT Cap would have little effect on them.

Essentially, the SALT Cap is suppressing sales and price appreciation in the higher-priced markets like Hudson, Bergen, Morris, and Essex, but having little or no impact on lower-priced markets like Passaic and Sussex. Indeed, we are seeing the same thing throughout the metropolitan region – in the northern suburbs of New York City, for example, prices were down in higher-priced Westchester but up in lower-priced markets like Rockland and Orange. The SALT Cap is not devastating these high-end markets – for example, the rolling year average price in the higher-end counties was still up – but it is hampering what would otherwise be a fairly robust seller’s market.

Going forward, we still believe that the market is poised for growth. At some point, we expect the impact of the SALT Cap to get priced into the market, because the seller market fundamentals are otherwise 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.

To learn more about Better Homes and Gardens Real Estate Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on TwitterPinterest, and Instagram.

Posted on April 15, 2019 at 4:09 pm
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

First Quarter 2019: Real Estate Market Report – Bergen County, NJ

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.

To learn more about Better Homes and Gardens Real Estate Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on TwitterPinterest, and Instagram.

Posted on April 15, 2019 at 3:57 pm
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

First Quarter 2019: Real Estate Market Report – Essex County, NJ

Sales in the Essex housing market went up again in the first quarter of 2019, but this increase in buyer demand had a middling effect on pricing. Sales rose over 5% for the quarter, and finished the rolling year up almost 4%. But pricing was mixed: for the quarter, the average price was down over 4% for the quarter, and down 2% for the 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 Essex 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 Essex and its high-priced neighboring counties like Morris, Bergen, 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

To learn more about Better Homes and Gardens Real Estate Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on TwitterPinterest, and Instagram.

Posted on April 15, 2019 at 3:54 pm
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

First Quarter 2019: Real Estate Market Report – Hudson County, NJ

After sizzling throughout 2018, the Hudson County housing market slowed dramatically in the first quarter of 2019, with sales down sharply and price appreciation diminishing. Sales were down almost 15% overall from last year’s first quarter, and down for each property type. And pricing was relatively mixed compared to last year’s first quarter, with the average price down over 4% for single-family homes, up almost 6% for multi-families, and flat for condos. Now, prices are still way up for the year, rising over 6% overall and up in each property type, but the trend is a little concerning for Hudson homeowners and sellers. 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.

To learn more about Better Homes and Gardens Real Estate Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on TwitterPinterest, and Instagram.

Posted on April 15, 2019 at 3:53 pm
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

First Quarter 2019: Real Estate Market Report – Morris County, NJ

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.

To learn more about Better Homes and Gardens Real Estate Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on TwitterPinterest, and Instagram.

Posted on April 15, 2019 at 3:53 pm
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

First Quarter 2019: Real Estate Market Report – Passiac County, NJ

The Passaic housing market continued to grow in the first quarter of 2019, with prices up again even while low levels of inventory constricted sales growth. We are seeing clear signs of a thriving seller’s market. Prices continue to go up, with the average price rising over 3% for the quarter and over 4% for the rolling year. And inventory is still falling, dropping almost 7% from last year’s first quarter and now down below the six-month level that usually signals a seller’s market. And that shortage of inventory is still suppressing sales growth, with sales falling a little for both the quarter and the rolling year. Going forward, we expect that sales will only go up when these rising prices tempt more homeowners into the market, and that we will continue to see price appreciation through a robust spring market. The market fundamentals are strong, with prices still below historic highs, interest rates low, and the economy thriving.

To learn more about Better Homes and Gardens Real Estate Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on TwitterPinterest, and Instagram.

Posted on April 15, 2019 at 3:51 pm
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

First Quarter 2019: Real Estate Market Report – Sussex County, NJ

Pricing in the Sussex market surged yet again in the first quarter of 2019, even while falling inventory suppressed sales growth. Transactions were down sharply, falling almost 12% for the quarter and now down over 2% for the rolling year. But the drop in sales clearly did not indicate a lack of demand, with average prices up almost 13% from last year’s first quarter and over 8% for the rolling year. More importantly, inventory has finally come down to manageable levels, down near six-month level that usually denotes a seller’s 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 some sales growth in a robust spring market.

To learn more about Better Homes and Gardens Real Estate Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on TwitterPinterest, and Instagram.

Posted on April 15, 2019 at 3:40 pm
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

Congratulations to Wyckoff Agent Anne Ryan – Named Among Bergen County’s Best Realtors®

Congratulations to Anne Ryan, one of our star agents in the Wyckoff, NJ office, who has been voted second place as “Best Realtor” for (201) Magazine’s 13th Annual Best of Bergen Poll.

As a lifelong resident of Bergen County, Anne has extensive knowledge and understanding of the cities and municipalities in the area and is an expert on what each has to offer. Her familiarity with Bergen, Hudson, Passaic, Morris and Essex counties makes her a top choice for anyone making the move to New Jersey.

This honor is well deserved for Anne, who prides herself on the fundamental principles of honesty and professionalism. These two principles have helped Anne form successful client-agent relationships with both buyers and sellers. In addition to having a “sixth sense” for assessing her client’s wants and needs — Anne also attributes her success to a strong work ethic, knowledge of the industry, attention to detail and her commitment to quality customer service.

Anne is a member of multiple Real Estate Associations, including the National Association of Realtors®, New Jersey Realtors®, Greater Bergen Association of Realtors®, New Jersey Multiple Listing Service and Garden State Multiple Listing Service.

“I could not be more thrilled to receive this tremendous honor,” says Anne. “It means so much to me to be recognized by my community and included in this prestigious poll. I could not have done it without the support and trust of my family, friends, and clients. Without the continued support I receive day in and day out and the ongoing referrals, I would not be where I am today.”

 

Posted on March 27, 2019 at 10:08 am
Nina Agro | Category: Bergen County, In the News, New Jersey, North Bergen, Rand Country Blog

Homes in Northern New Jersey Are STILL Cheaper Than They’ve Been in a Generation

Right now is a really great time to be buying a home in Northern New Jersey

Man, do I hate saying that. As I’ve explained before, I hate the phrase “great time to buy,” for a couple of reasons.

First, people have different needs, and a market that’s great for one person might be terrible for another person.

Second, while markets tend to move together, we do see micro-markets (i.e., towns and villages) that defy larger trends. So while it might be a great time to buy in Village A, it might be not so great in Town B.

Third, and most importantly, though, “it’s a great time to buy!” just seems like a hack thing to say, the kind of thing that TERRIBLE real estate agents have said for generations to get unsuspecting and gullible people to buy an overpriced home. And I think that most people get suspicious when real estate agents talk like that.

So I understand if you’re skeptical. And that’s why I don’t want to just TELL you it’s a great time to buy, I want to SHOW you why it’s a great time to buy.

Specifically, I want to make this specific point: the monthly payment you need to buy an inflation-adjusted average priced home in Northern New Jersey is as low as its been in a generation.

Think about what I’m saying for a second. I’m NOT saying that homes are cheaper than they’ve ever been. That’s not true. Depending on the year, homes have appreciated, and if you go back more than 15 years, they’ve appreciated pretty dramatically. I’m just saying that the MONTHLY PAYMENT you need to make to buy the AVERAGE PRICED HOME is lower right now than it’s been in a generation — if you control for the effects of inflation.

Take a look at these graphs for Bergen and Passaic Counties, and you’ll see what I mean:

On these graphs, as we’ve done before, we’ve plotted the monthly payment that a purchaser in the county would have to make to purchase the average-priced home at various points over the years. After all, affordability is not just a matter of the sales price – it’s a matter of the monthly payment you’re going to have to make, which is partly a function of the prevailing interest rate. And then to measure the change in the monthly payment over time, we factored in the effects of inflation.

So we took the following data points:

•The average price of a single family home up to the end of 2016 – from the local MLS data.
•The average interest rate for a 30-year fixed-rate mortgage for every calendar year up to 2016 – from Freddie Mac.
•The prevailing inflation rate for every calendar year up to 2016– from the US Department of Labor.

You can see the results on the graph. The monthly payment you have to make to purchase the average-priced home in Bergen or Passaic is just about as low as it’s been in years. We saw the slightest uptick from 2012-2014, partially because of a slight increase in pricing and a slow inflating of interest rates. But the payment came down again over the past two years, with rates falling and prices stalling.

Generally, though, we’re talking about a monthly payment that is as low as anytime in the past 30 years – and as low as it was in the mid-1990s, during a crippling buyer’s market. We don’t have data going back in Passaic as far as we do in Bergen, but there’s no reason to think that the markets behaved differently during the 1980s.

So why are monthly payments lower than they’ve been in a generation? A couple of reasons:

1) Prices. Part of it is that we have not seen prices go up in any measurable way in almost 10 years. Home prices peaked in 2006-08, lost about 25-30% of value from 2008-2010, and have bounced around a little since then. But they’re still around 2004 levels — without controlling for inflation.

2) Inflation. Ah, yes, inflation — the value of money goes down a little bit each year as inflation takes a bite. Now, inflation rates have been pretty low over the past 15 years from historical standards, but that little bit each year does add up.

3) Rates. But the biggest reason we’re seeing monthly payments lower than they’ve been in a generation is that rates are still at historic lows. After all, about ten years ago, the average interest rate was about 6%. For the past few years, it’s been below 4%. That’s a huge difference in your monthly payment.
Again, I HATE it when real estate professionals say that “this is a great time to buy,” because at many times in our history that has been bad advice.

But if you measure a “great time to buy” by looking at the monthly payment you’ll have to make to buy a home, then we’re talking about as good a time to buy as any in the past decades. Prices have been flat for almost 10 years, and they’re down significantly if you factor in the effects of inflation. And interest rates are still as low as we’ve ever seen them. Unless we see some major shock to the economy, I think we’re looking at a near-decade of reasonable price appreciation coupled with increasing interest rates – both of which are going to drive that monthly payment up over the next few years.

So I’m not going to tell you what to do. That’s not my job. But if you’ve been thinking about buying a home, I think these graphs speak for themselves.

To learn more about Better Homes and Gardens Real Estate Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.

Joe Rand is the Chief Creative Officer of Better Homes and Gardens Real Estate | Rand Realty, and compiles and writes the Rand Quarterly Market Report.

Posted on January 10, 2018 at 12:50 pm
Vincent Abbatecola | Category: Analysis, Bergen County, New Jersey, North Bergen, Passaic County, Rand Country Blog | Tagged , , , , , ,