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

 

The Bergen County housing market cruised through the third quarter of 2019, with increases in both sales and prices. Single‑family home sales were up almost 5%, and are now positive for the rolling year. And prices were up, rising 1.5% on average even though flat at the median. 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 eventually start to rise as more sellers are tempted into an appreciating market. Also, we expect that at some point the effects of the SALT Cap will get priced into the market. With prices still lower than their heights from the last seller’s market, interest rates near historic lows, and a growing economy, we believe that Bergen is poised for sales and price growth through the winter and into the 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 – 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 – Westchester County, New York

 

The Westchester housing market surged in the third quarter, showing signs of recovery from the lingering effects of the 2018 Tax Reform cap on state and local taxes (“SALT Cap”). Single‑family home sales were up about 1% compared to last year’s third quarter, the first year‑on‑year increase since the SALT Cap was passed. Similarly, single‑family average prices rose 3.3%, the largest quarterly appreciation since the inception of the SALT Cap. Moreover, the luxury market showed signs of life with 38 sales of $3M+ homes, an increase of almost 23% from last year’s third quarter, and the most quarterly sales in over four years. In the condo and coop markets, prices were also up significantly; sales results were more mixed, but only because inventory levels are down to about 3‑4 months. Basically, we believe that higher‑end home buyers are finally starting to price in the effects of the SALT Cap, and that the overall strength of the housing market – historically low rates, attractive overall values, and a solid economy – are going to continue to drive demand through the end of the year and into 2020.

Posted on October 31, 2019 at 10:14 am
Adam DiFrancesco | Category: In the News, New York, Quarter Market Report, Westchester County

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

 

The Rockland housing market surged forward in the third quarter of 2019, showing the first signs of recovery from the lingering effects of the 2018 Tax Reform cap on state and local tax deductions (“SALT Cap”). Single-family home sales were up over 8% from last year’s third quarter, the largest increase since 2017, before the SALT Cap took effect. Pricing for the quarter was a little more mixed, with the median price rising over 3% but the average price down 1.5%, probably because the SALT Cap is still suppressing some demand in the high end. Indeed, if you look just at the condo market, which is priced well below the single-family market, you’ll see how strong demand is in the entry-level price points: prices in the quarter spiked over 13% on average and 12% in the median. Condo sales were down over 15%, but that’s largely due to a lack of viable inventory; demand remains exceptionally strong. Going forward, we believe that the SALT Cap is eventually going to get priced into the higher-end of the market, and that average prices will start to appreciate more aggressively by next year.

Posted on October 31, 2019 at 10:10 am
Adam DiFrancesco | Category: In the News, New York, Quarter Market Report, Rockland County

Third Quarter 2019: Real Estate Market Report – New York Overview

 

The housing market in Westchester and the Hudson Valley surged forward in the third quarter of 2019, showing the first signs of recovery from the suppressive effects of the 2018 Tax Reform Cap on State and Local tax deductions (i.e., the “SALT Cap”). With the higher‑end starting to recover, we expect the market will continue to strengthen through the fourth quarter and into 2020.

Single‑family sales were up regionally, and in every individual county. Regional sales rose 3.4% from last year’s third quarter, the first increase since the end of 2017 and the inception of the SALT Cap. Indeed, the 4,683 single family quarterly closings in the region was the highest total since the third quarter of 2017. Moreover, sales were up in every individual county, rising 1.2% in Westchester, 9.4% in Putnam, 8.2% in Rockland, 2.7% in Orange, and 3.7% in Dutchess. This surge in the third quarter moderated some of the declines earlier in the year, with the rolling year price flat and sales down 2.8%.

Similarly, single‑family prices were generally up across the region, reflecting some rising strength in the high‑end. Regionally, the average price rose 1.4% from last year’s third quarter, the first quarterly increase of 2019. Much of that was due to the first quarterly average price increase in Westchester since the inception of the SALT Cap. Indeed, we might be seeing a long‑awaited recovery in the high‑end Westchester market: sales of super‑luxury $3M+ homes rose 23% from last year’s third quarter, to the highest quarterly total in four years. That buoyed Westchester’s average sales price, which thus boosted the regional sales price.

In other counties, though, we saw signs of lingering weakness in the high end. Outside of Westchester, the Hudson Valley counties all saw a sharp divergence between the average and median sales price trends: in Putnam, the average down 0.2%, the median up 3.8%; in Rockland, the average down 1.5%, the median up 3.3%; in Orange, the average down 0.6%, the median up 4.7%; in Dutchess, the average up 5.4%, the median up 7.1%. Why was the median so much stronger than the average throughout the region? We believe that these markets have not yet priced in the SALT Cap impact on higher‑end homes, which is reducing the number of high‑priced sales and changing the mix of homes sold in a way that affects the average more than the median. Outside the very high‑end, which is still suppressed by the SALT Cap, the average Hudson Valley homeowner is probably experiencing fairly significant price appreciation.

Similarly, the condo and coop markets were torrid, with but prices spiking from a lack of inventory. Regionally, condo sales were down almost 3% from last year’s third quarter, and down a tick for the rolling year. But this is largely due to a lack of inventory, which remains well below the six‑month level that denotes a seller’s market. At the end of the quarter, inventory levels were at 3.3 months for Westchester coops, and at 4.1 months for Westchester condos, 5.3 months for Putnam condos, 4.7 months for Rockland condos, and 2.9 months for Orange condos. This lack of inventory is having its expected impact on pricing, with the regional condo/coop average price up almost 6% for the quarter and 7% for the rolling year, and rising in every individual county. Essentially, the lower‑end of the market has never been touched by the SALT Cap, so it’s simply experiencing the unfiltered effects of a robust seller’s market: low inventory that suppresses sales and boosts prices. This is what the entire market would look like had the SALT Cap never been enacted.

Going forward, we believe that the market is poised to finish the year strong. Housing fundamentals are all positive: prices are still at attractive levels compared to the last seller’s market, interest rates are back down to historic lows, the economy is solid, and inventory remains relatively low. Accordingly, we believe that strong demand will continue to grow, and that as the lingering effects of the SALT Cap dissipate, we will see more widespread price appreciation in the fourth quarter and into 2020.

Posted on October 31, 2019 at 10:03 am
Adam DiFrancesco | Category: Hudson Valley, In the News, New York, Quarter Market Report