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

 

The Northern New Jersey housing market experienced modest but meaningful price appreciation through the third quarter of 2019, even while sales growth was stifled by a lack of inventory and the impact of the 2018 Tax Reform cap on state and local tax deductions (i.e., the “SALT Cap”). Going forward, we believe that strong housing fundamentals will continue to drive appreciation and eventually more sales through the fourth quarter and into 2020.

Regional sales were down just a tick, with the results varying by county. Regional single‑family sales fell 0.3% for the quarter, and are now down 2.3% for the rolling year. But the results varied significantly by county: sales were up for Bergen, Essex, and Sussex, but down in Passaic, Morris, and Hudson. Generally, the SALT Cap has suppressed buyer demand at the very highest end of the market, where home buyers who itemize their deductions are more likely to feel the pinch. This is holding down sales, but we’re not seeing any consistency across the region in how that dynamic is playing out.

Conversely, prices were up regionally, rising in most of the individual counties. For the region, the average price was up 1.8% for the third quarter, finishing a rolling year where prices rose by 1.9%. And they were generally up within each county in the region, down only for condos in Bergen and Hudson – which might indicate that the slowdown in Manhattan is starting to spread to the geographically adjacent markets.

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 largely caused by (1) a lack of inventory and (2) the SALT Cap. But both those challenges might be dissipating. Inventory remains near or below the six‑month level that usually denotes a seller’s market, but it is starting to go back up as more sellers are tempted into a rising pricing market. And the SALT Cap continues to have a suppressive effect on upper-income buyers, but will eventually get priced into the market and open up the high end a little more.

Going forward, we expect the market to continue to appreciate through 2020. The seller market fundamentals are very strong: the economy is growing, interest rates are near historic lows, inventory is relatively low, and homes are priced well below their last seller market highs. Accordingly, we expect that sales and prices will show some modest strength through the winter, leading into a robust spring market.

Posted on October 31, 2019 at 11:36 am
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

Third Quarter 2019: Real Estate Market Report – Passaic County, New Jersey

 

The Passaic County seller’s market continued through the third quarter of 2019, with limited inventory driving strong price appreciation even while it held back sales growth. Prices keep going up, with the average price rising almost 5% for the quarter and over 4% for the rolling year. And while relatively low levels of inventory are still stifling sales growth, causing a 3% decline in transactions this quarter, that inventory is starting to creep up as homeowners are getting tempted into the market by the rising prices. Going forward, we expect that higher levels of inventory will provide more “fuel for the fire,” which will push sales up a bit, but that strong demand will still drive meaningful price appreciation. 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 through the winter and into 2020.

Posted on October 31, 2019 at 11:36 am
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

Third Quarter 2019: Real Estate Market Report – Morris County, New Jersey

 

The Morris County housing market surged forward in the third quarter of 2019, with prices rising sharply even while limited inventory stifled sales growth. Prices experienced their biggest quarterly jump in over two years, rising almost 4% on average and 5% at the median compared to the third quarter of last year. For the rolling year, prices were up more modestly, reflecting how pricing has been a little more lackluster through most of 2019. Meanwhile, though, sales are down, falling 1% for the quarter and now down 5% for the rolling year, mostly because relatively low levels of inventory are stifling sales activity. But inventory went up almost 20% in the quarter, the largest increase in about 10 years, because sellers are starting to see prices go up and are getting tempted into the market. Going forward, we believe that if inventory continues to rise to meet buyer demand, the market is poised for both sales and price growth through the winter and into 2020. The market fundamentals are strong: the economy is solid, interest rates are back down to historic lows, and home values are still below their heights from the last seller’s market.

Posted on October 31, 2019 at 11:36 am
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

Third Quarter 2019: Real Estate Market Report – Essex County, New Jersey

 

Sales in the Essex housing market went up yet again in the third quarter of 2019, even while prices leveled off after some modest increases earlier in the year. Sales rose almost 3% for the quarter, and finished the rolling year up almost 5%. But this continued increase in sales is not yet having a sustained impact on pricing, which was flat on average and down almost 3% at the median compared to the third quarter of last year. And if you look at the rolling year, pricing is virtually flat, down just a tick on average and at the median. 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. Accordingly, we expect modest sales growth and appreciation through the winter and into the 2020 market.

Posted on October 31, 2019 at 11:29 am
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

Third Quarter 2019: Real Estate Market Report – Sussex County, New Jersey

 

The Sussex County housing market showed significant signs of strength in the third quarter of 2019, with modest sales increases coupled with sharp price appreciation. Sales were up almost 2%, a welcome change from the past two quarters. Even with that quarterly increase, though, sales are still down over 8% for the rolling year. But the real story is pricing, which was up across the board: rising almost 3% on average and 8% at the median for the quarter, and finishing a rolling year up over 4% on average and 10% at the median. The other indicators support the theory that Sussex has moved into a seller’s market, with the days‑on‑market falling and the listing retention rate rising: homes are selling more quickly and for closer to the asking price, demonstrating that sellers are continuing to gain negotiating leverage with buyers. Going forward, we believe that the seller market fundamentals are strong: a growing economy, prices well below historic highs, low interest rates, and relatively low levels of inventory. So we expect to see continued appreciation and maybe even some sales growth through the winter and into 2020.

Posted on October 31, 2019 at 11:27 am
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

Third Quarter 2019: Real Estate Market Report – Hudson County, New Jersey

 

After sizzling throughout much of 2018, the Hudson County housing market continued its 2019 struggles through the third quarter. Sales were down almost 6% overall from last year’s third quarter, and are now down 6% for the rolling year. But even with this decline in sales, prices still appreciated modestly: average prices were up about 1% overall, rising almost 5% for single‑family homes and 7% for multi‑families, even while falling 2% for condos. We are clearly seeing some impact from the 2018 Tax Reform’s cap on state and local tax deductions (“SALT Cap”), which particularly affected higher‑income home buyers who are more likely to itemize their deductions. The SALT Cap is hampering Hudson both directly and indirectly: directly by reducing high‑end buyer demand in the county, and indirectly by slowing the exodus from Manhattan, which is suffering through the same SALT Cap impact. Going forward, though, we expect that the SALT Cap’s effects will eventually get priced into the market, and believe that the seller market fundamentals are strong: a growing economy, low interest rates, and relatively low levels of inventory. Accordingly, we expect to see sales level out and prices continue to appreciate through the winter and into 2020.

Posted on October 31, 2019 at 11:22 am
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

Third Quarter 2019: Real Estate Market Report – Putnam County, New York

 

The Putnam housing market surged in the third quarter, with sales rising and prices generally appreciating. Single‑family sales were up over 9% compared to last year’s third quarter, with the 326 recorded closings marking the highest quarterly total in over three years. Pricing for the quarter was a little more mixed, with the median price rising almost 4% but the average price down a tick. Indeed, pricing for the rolling year showed the same divergence, with the median up over 5% but the average up only 0.3%. We believe that the discrepancy between the average and median has a lot to do with the suppressive effect of the 2018 Tax Reform cap on state and local tax deductions (“SALT Cap”) on the high‑end of the market, which is holding down the average even while the overall strength in the market buoys the median. This is good news for the average homeowner in Putnam (outside the highest‑end markets), who is likely experiencing significant price appreciation and a robust seller’s market. Moreover, we believe that the market is eventually going to price in the effects of the SALT Cap, which will boost the higher‑end of the market and probably drive more widespread price appreciation by next year.

Posted on October 31, 2019 at 9:30 am
Adam DiFrancesco | Category: In the News, New Jersey, Putnam County, Quarter Market Report

Second Quarter 2019: Real Estate Market Report – Putnam County, New York

 

The Putnam housing market cruised through the second quarter of 2019, with sales up and prices basically flat. Compared to the rest of the region, Putnam was a bit of an outlier, with single-family home sales rising 7% for the quarter and almost 1% for the rolling year – the only county in the region with rising sales. Single-family pricing was a little more mixed: flat on average, up almost 4% at the median, and down 1% in the price-per-square-foot. For the rolling year, though, prices have been generally appreciating. Moreover, the negotiability indicators signaled a rising seller’s market, with days-on-market falling and the listing retention rate up. Going forward, we expect that Putnam will continue to show modest sales growth and price appreciation through the summer and fall.

Posted on July 15, 2019 at 11:39 am
Adam DiFrancesco | Category: In the News, New Jersey, Putnam County, Quarter Market Report

Second Quarter 2019: Real Estate Market Report – Hudson County, New Jersey

 

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.

Posted on July 15, 2019 at 11:31 am
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report

Second Quarter 2019: Real Estate Market Report – Sussex County, New Jersey

 

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

Posted on July 15, 2019 at 11:28 am
Adam DiFrancesco | Category: In the News, New Jersey, Quarter Market Report