Rand Country Blog April 28, 2016

Homes in Northern New Jersey are More Affordable Right Now Than in a Generation

I have always hated it when real estate professionals say “it’s a great time to buy.”  It always seems so self-serving, and I know it immediately causes suspicion.

So I’m not going to SAY that it’s a great time to buy a home right now. I’m just going to show you.

Specifically, I’m going to show you that the monthly payment you need to make to buy an averaged priced home in Northern New Jersey is about as low as it’s 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 — that is, if you control for inflation.

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

Bergen SF Affordability 2015

Passaic County Affordability 2015

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 2015 – from the local MLS data.
  • The average interest rate for a 30-year fixed-rate mortgage for every calendar year up to 2015 – from Freddie Mac.
  • The prevailing inflation rate for every calendar year up to 2015– 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 in 2015, 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!

Why? Part of it is that we have not seen prices go up in any measurable way in almost 10 years, during which inflation has reduced the “true” cost of purchasing a home.

But more importantly, rates are significantly lower than they’ve been at any time in modern history. After all, about ten years ago, the average interest rate was about 6%. It’s now 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.

Joe Rand is one of the Managing Members of Better Homes and Gardens Real Estate | Rand Realty, and compiles and writes the Rand Quarterly Market Report.

Rand Country Blog October 14, 2015

So What’s Going on in the Bergen County Real Estate Market?: The Rand Quarterly Market Report for 2015Q3

image003The 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.

Rand Country Blog October 9, 2015

So What’s Going on in the Market?: The Rand Quarterly Market Report for Westchester and the Hudson Valley Region for 2015Q3

image001The housing market in Westchester and the Hudson Valley surged forward in the third quarter of 2015, with sales up dramatically throughout the region. More importantly, several counties showed signs of “green shoots” of meaningful price appreciation, reflecting the impact of the sustained increases in buyer demand that we’ve seen over the past few years.

Home sales continued to spike, rising 19% throughout the region. This continued a trend we’ve been tracking for several years, with year-over-year regional sales now up for four out of the last five quarters and 12 out of the last 14. And the trend was widespread, with sales up in every county in the Rand Report: rising 6% in Westchester, 24% in Putnam, 27% in Rockland, 32% in Orange, and 47% in Dutchess. As you can see, sales growth was strongest in the lower-priced markets, which was also true within each county, where sales condo markets generally outpaced single-family homes.

Indeed, we’re now seeing sales at “seller market” levels. The 4,500 single-family regional sales were the highest quarterly total since 2005, and the 13,000 rolling year transactions were the highest since 2007. To put this in perspective, those 13,000 rolling year transactions are about 20% below the 16,000-sale rate at the very height of the seller’s market in 2004-05, but about 60% higher than the 8,000-sale rate we experienced at the very bottom of the market in 2008-09. When it comes to transactional levels, we’re a lot closer to 2005 than 2009.

These sustained increases in buyer demand might be starting to impact pricing. Pricing was relatively mixed, with average prices up in Putnam, Rockland, and Orange, but down in Westchester and Dutchess. This is obviously nothing to get too excited about, but it’s still noteworthy that most of the counties in the Report are starting to see “green shoots” or price appreciation. (Note that the regional price fell about 6%, but that’s only because the relative strength in the lower-priced counties changed the mix of properties sold.)

We believe it’s only a matter of time before we start seeing meaningful price appreciation. As we have said before, it takes time for changes in market activity to impact market psychology. Back in the last seller’s market, sales fell for almost three years before we started to see prices start to go down. And while we’ve now seen over three years of increasing sales activity, we expect that buyers are still skeptical about pricing based on their vivid memories of the market correction of 2008-09. But basic economics tells us that when inventory is stable, and demand is going up, pricing is bound to increase eventually.

Going forward, we expect the market to finish the year strong, with sustained buyer demand eventually driving meaningful price appreciation by the spring market of 2016. With pricing in most of the counties at non-inflation-adjusted 2003-04 levels, rates near historic lows, and a stabilized economy, we believe it’s just a matter of time before we enter a fairly robust seller’s market characterized by increasing demand, narrowing inventory, and rising prices.

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.

Rand Country Blog July 20, 2015

So What’s Going on in the Market?: The Rand Quarterly Market Report for Westchester and the Hudson Valley Region for 2015Q2

Westchester and Hudson Valley Regional 2015Q2This week, Better Homes and Gardens Rand Realty is releasing its Quarterly Market Report for all the counties it services: Westchester, Putnam, Rockland, Orange, and Dutchess Counties in New York; and Bergen, Passaic, and Morris Counties in New Jersey. Below is an excerpt from the report, but you can get the full Report here.

The real estate market in Westchester and the Hudson Valley surged in the second quarter of 2015, with sales spiking throughout the region. But even with transactions reaching highs that we have not seen in almost ten years, pricing remains stubbornly flat or even down in most of our local markets.

Home sales were torrid, rising almost 15% throughout the region. This continued a trend we’ve seen for most of the last year, marking the third straight quarter of year-on-year sales increases. And the results were impressive not just in comparison to a relatively tepid 2014, with the 3,070 second quarter sales and the 12,258 rolling year sales representing the highest totals since 2007, at the tail end of the last seller’s market. More importantly, the surge was widespread, with sales up sharply in every county in the region: rising 15% in Westchester, 18% in Putnam, 10% in Rockland, 31% in Orange, and 21% in Dutchess. Clearly, buyer demand has come back to the region at levels we have not seen in almost ten years.

This surge in buyer demand did not, though, have its expected impact on pricing, with regional prices down 5.5% from last year. Now, that does not necessarily mean that the average home in the region declined by over 5% in value. Rather, some of the decline is simply a change in the mix of properties sold – after all, if you look at the sales increases listed above, you can see that we saw the strongest results in the lowest-priced counties like Orange and Dutchess. Indeed, we saw the same kind of results within each county, with most of the areas showing more strength in the lower-end of the market. So part of the reason for the decline in pricing is simply that the market was more heavily weighted down by lower-priced homes.

But the main reason for the continued sluggishness of pricing is simply that we are still working our way out of the 2008-2011 market correction. As we have noted before in this Report, it takes time for changes in buyer demand to have an impact on pricing. For example, if you look at the accompanying graph displaying regional sales and prices going back almost 15 years, you can see that sales topped out and started falling sometime in 2004-05, but prices only started to come down in 2008. In other words, it took almost four years for a decline in buyer demand to have an impact on pricing. Similarly, we have argued that it will take several years of increasing demand to start driving prices back up – and you can see that sales only started to climb back up in 2012 or so. So we’re not necessarily surprised that prices are still bouncing around at the current levels.

Going forward, we believe it’s only a matter of time before these sustained increases in buyer demand have an impact on pricing. We’re now going into our fourth year of mostly sustained increases in sales, and basic market economics tells us that increasing demand coupled with stable supply is eventually going to drive prices up. And given that we’re seeing homes at relatively affordable levels, interest rates near historic lows, and a generally improving economy, we think that meaningful changes in price appreciation in the region are imminent.

CLICK HERE TO DOWNLOAD YOUR COPY OF THE REPORT

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

Rand Country Blog July 20, 2015

So What’s Going on in the Bergen County Real Estate Market?: The Rand Quarterly Market Report for 2015Q2

Bergen County SF 2015Q2This week, Better Homes and Gardens Rand Realty is releasing its Quarterly Market Report for all the counties it services: Westchester, Putnam, Rockland, Orange, and Dutchess Counties in New York; and Bergen, Passaic, and Morris Counties in New Jersey. Below is an excerpt from the report, but you can get the full Report here.

The Bergen County housing market continued to strengthen in the second quarter of 2015, with sales and prices up across the board compared to last year. Although the longer-term trends are more mixed, the market is clearly moving in a positive direction.

Sales. Bergen single-family home sales surged in the second quarter, with closings up 10.2% from last year. This marked the third straight quarter that year-on-year sales were up, although the first time that the increase was in the double-digits. We expect that sales will continue to rise in the seasonally strong third quarter.

Prices. With these sustained increases in buyer demand, we’re also seeing some meaningful price appreciation. Prices were up for the quarter, rising 2.8% on average and 4.4% at the median. The longer-term trend, though, was more mixed, with the average down 1.4% and the median basically flat.

Negotiability. The negotiability indicators were also mixed, indicating that sellers are still struggling to gain leverage with home buyers. Essentially, homes were selling a little more quickly, with the days-on-market falling 4.1%, but they were also being discounted a bit more, with the listing retention rate falling from 96.0% to 94.7%.

Condos & Coops. The Bergen condo market was not as strong in the second quarter, with sales up 4.3% but prices down across the board. The longer-term trends go in a different direction, with sales down 4.0% for the rolling year but prices more mixed.

The Bergen County market is going in the right direction, with sustained increases in buyer demand that are driving sales growth and now some emerging signs of price appreciation. Going forward, we expect that sales and prices will continue to rise in a seasonally strong third quarter, especially with an improving economy and near-historically-low interest rates.

CLICK HERE TO DOWNLOAD YOUR COPY OF THE COMPLETE REPORT

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

Rand Country Blog July 5, 2015

Are We In a Buyer’s or Seller’s Housing Market?

3d render image of houses with graph growingThe real estate industry is constantly going through changes, and that includes the climate of the market. If there is high inventory and low prices, you can bet that you are in a buyer’s market, and if there’s low inventory and high prices, you can be sure that you’re in a seller’s market. In the U.S., however, the type of market varies by location. Because of the size of the U.S., some areas might be displaying traits of a buyer’s market, and other places might be showing signs of a seller’s market. It all depends on where you live.

According to RealtyTrac, homes are selling for 108 percent of asking price on average in the Bay Area of California, as well as in Washington, D.C.; Cass County, North Dakota; and Winston-Salem, North Carolina. In these locations, sellers are receiving more than they originally asked for, which shows that there is a high demand for housing.

Then, there are areas, such as Atlanta, Baltimore, Pittsburgh, and St. Louis, where buyers have the most influence and sellers are receiving less than the asking price, and this is happening even though the number of homes on the market are limited.

According to RealtyTrac, less than a third of housing markets in the U.S. have homes that sell for above the asking price, 60 percent have homes selling for below the asking price, and only 14 percent of homes sell at their market value.

If you want further proof that the U.S. real estate industry can’t be pinned down to one kind of market over the other, there are also areas that have markets where the situation is on even ground between buyers and sellers. These places include the D.C. suburbs of Montgomery County, Maryland; Raleigh, North Carolina; the Phoenix metropolitan area; and Riverside County, California.

To give you an example of the areas around near where I live (the lower Hudson Valley and northern New Jersey), there is definitely a situation where there are certain counties that have markets that are more suitable for buyers, some that are better for sellers, and others that are great for both. Orange County is certainly a buyer’s market with its 30-percent sales increase of single-family homes from last year and a median sales price of $220,000. Dutchess County also has a relatively low median sales price, coming in at $249,600.00, but faired even better than Orange County in terms of sales for single-family homes, topping that region with a 21.4 percent increase. Putnam County experienced changes that have made it a decent market for both buyers and sellers, with sales having shown a considerable increase of 18.2 percent and prices displaying more consistency and a promise of growth.

The northern New Jersey counties near the lower Hudson Valley (Bergen, Morris, and Passaic), have been displaying wonderful activity within their markets. All three counties have enjoyed increases in sales and prices, and they also have the lowest amount of average days on market for their homes (ranging from 76-155 days), whereas Westchester, Rockland, Orange, Putnam, and Dutchess Counties in New York have homes that spend a higher average of days on the market (ranging from 170-218 days).

When you’re looking to buy a home, it’s always important to study the current housing market and see where you can get the best deal for a home. Each area has its own market that favors either the buyer, the seller, or both, so you should have an idea about what a certain market is going to offer you before you actually visit that area. As long as you stay on top of the market and use it as a valuable real estate tool, you will surely know where it is best to search for a home.

If you’re interested in Better Homes and Gardens Rand Realty’s full market report for the second quarter of 2015, you can find it here on our blog. The QMR includes a market overview and in-depth analyses pertaining to each county that Rand Realty covers.

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

 

Sources

www.cnbc.com

Rand Country Blog April 15, 2015

Golf Courses in the Lower Hudson Valley and Northern New Jersey

Close-up of man's Hand hold golf ball with tee on courseThe weather is starting to warm up, and we’re starting to think about the fun activities we’ll be enjoying once the chill in the air is officially gone for the season. Some of us look forward to swimming, some look forward to baseball, and some look forward to barbecues. One activity that is definitely anticipated is playing a relaxing game of golf. When you have a day off, it’s certainly a great way to take your mind off of work and play 18 holes. If you’re a golf enthusiast, here are some courses you should visit during the spring and summer.

In Rockland County, New York, there’s the Philip J. Rotella Memorial Golf Course in Thiells, which welcomes golfers of all skills and is known to have one of the finest greens in Rockland. It’s a par-72 course and measures over 6,500 yards from the back tees. While playing there, you’re also treated to the beautiful views of the homes on the neighboring mountains. When you’re done with your game, be sure to head into the Sonoma Grille for a delicious lunch or dinner as a way to unwind after your game.

Also in Rockland is the beautiful and scenic Patriot Hills Golf Club in Stony Point. If you want a course that has some of the best views that the county has to offer, then Patriot Hills is certainly a terrific choice, where you are treated to some majestic views of the surrounding mountains. What better way to enjoy some golf then to have the stunning geography of the Hudson Valley right before your eyes?

In Orange County, NY, visiting West Point is an experience that’s rich in history and offers many fun activities. So, if you’re up in Orange County, definitely visit the West Point Golf Course. It’s a par-70 course that has been listed in LINKS Magazine as one of the 10 best golf courses in the armed forces and stretches over 6,000 yards. West Point is one of the finest places to visit when in the Hudson Valley, so you can bet that it’ll be a lot of fun to play a round of golf in such a notable location.

You can also visit The Golf Course at Mansion Ridge, which offers superb views of the countryside. It’s a par-72 course that extends over 6,800 yards. Located in Monroe, this course resides on a 220-acre estate that includes landmarks that have been standing since before the American Revolution. It’s also a Jack Nicklaus Signature Golf Course, which is the only 18-hole public course in New York to be given that honor. Nicklaus is one of the most celebrated golfers of our time, so don’t you want the opportunity to say that you played on such a course? Yes, you do!

If you’re golfing in Westchester County, NY, definitely check out Ossining’s Hudson Hills Golf Course, which is a par-71, championship course located in the Hudson River Valley and stretches throughout 7,000 yards. Seeing as playing golf will have you outside for a couple of hours, you want to make sure you can enjoy the views of the course and surrounding area, so when you’re on top of the first tee, you are treated to gorgeous scenery where you are able to see about one-third of the course in view. After a fun and friendly round, relax at Hudson Hills’ Lookout Grill, where golfers can come together and have a satisfying meal as they bond over the game.

The Dunwoodie Golf Course is situated at the top of “Dunwoodie Heights,” which is in the center of the city of Yonkers. Dunwoodie is a par-70 course with a yardage of over 5,700. Its impressive topography and steep slopes make for a game that will surely test your golfing skills. The course has practice greens, which you might want to take advantage of if the course is as challenging as they say, and it also offers a driving range that’s lighted if you want to get some golf time in at night. On a serene and cool summer evening, something like that will surely be relaxing.

In Bergen County, New Jersey, you should visit the Rockleigh Golf Course. It’s the county’s only 27-hole course, and it functions as two different courses, with one that’s great for beginners, and another that’s great for pros. The Red and White nines come together to form a par-72, championship course, which opened in 1946 and was fully renovated in 2004. This course is the host to the annual Bergen County Amateur Championship. The nine-hole Blue course was built in 1961, has a par of 36, and allows a novice golfer to become familiar with the game and get comfortable with playing. All of the practicing you commit yourself to on the Blue course will surely be worth it once you advance to the Red and White courses, especially since they are good enough to host the BCAC.

The Darlington Golf Course is located in Mahwah within the foothills of the Ramapo mountain range. This course has a par of 72 and is cut through a forest of hardwoods, offering an extraordinary setting to marvel at while golfing. Of course, you can’t be too distracted by the views when it’s your turn at the tee, but when you’re waiting to swing, looking at the views can add a bit of relaxation to the game if you get a bit tense while playing.

There are many golf courses to choose from throughout these counties, but these are just a few to consider. It’s only the middle of April, so you still have several months of warm weather to look forward to for a game of golf. So, with the spring in full swing, round up some friends and get ready to tee off!

If you’re interested in learning more about these courses and rates, call to inquire or visit them online.

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