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Real Estate Market Report: Third Quarter 2016 – Northern New Jersey Market Overview
The Northern New Jersey housing market plateaued in the third quarter of 2016, with sales flattening out after a torrid start to the year and pricing struggling to gain traction. With inventory levels falling throughout the region, though, we expect that the market might gain strength going into 2017.
Sales were basically flat throughout the region. After a strong start to the year, sales slowed during the third quarter, rising only about 2%. The good news is that if you look at the rolling year, sales were up almost 10%, continuing a trend we’ve been watching for about five years. Although we are not yet at transactional levels that we saw during the last seller’s market of the mid‑2000’s, sales are up about 40% from the bottom of the market in 2009 and are moving in a positive direction.
We are also seeing inventory continue to tighten. 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. 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. And that’s about where we are trending throughout the region, with regional inventory down over 25%. Indeed, Bergen is already below six months of inventory, and Morris, Essex, and Passaic are all below nine months.
Even with sales up and inventory down, though, average prices have been dropping throughout the region. We have been a little disappointed in the pricing this year, after what looked to be “green shoots” of price appreciation toward the end of 2015. Certainly, basic economics of supply and demand would tell us that after five years of steadily increasing buyer demand, we would expect to see some meaningful price increases. It might be that the market is simply stronger in the lower‑end than the middle‑ or higher‑end, which is changing the mix of properties sold and skewing the averages. Or it could still just be a matter of time before falling inventory and rising demand starts impacting pricing.
Going forward, we still believe that we are heading for a seller’s market. Sales have now been increasing for almost five years, which has brought inventory to the seller’s market threshold in much of the region. 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 continue to believe that better days are ahead, and that we are likely to see modest but meaningful price appreciation in 2017.
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.
Second-Quarter 2016 Real Estate Market Report: Bergen County
Activity in the Bergen County Housing Market was up significantly in the second quarter of 2016, but pricing continued to struggle.
Sales. Bergen sales rose again in the second quarter, with transactions up over 11% for the quarter. Buyer demand in Bergen has now been growing for almost two years, with seven straight quarters of year‑on‑year sales growth. And for the rolling year, sales are now up almost 14%, with the 6,593 year‑long sales marking the highest total in almost ten years.
Prices. Unfortunately, these sustained levels of buyer demand are not yet having their expected impact on pricing. Single‑family prices were down over 2% on average and 1% at the median compared to last year’s second quarter, although the rolling year trend was slightly positive. Bergen County prices have been flat for almost eight years now, after the sharp correction in 2008‑09. It might be that the demand is stronger in the lower‑priced markets, which is driving prices down by changing the mix of properties sold.
Inventory. We generally consider anything below 6 months of inventory as a “tight” market that leads to multiple offer situations, bidding wars, and ultimately appreciating prices. Bergen single‑family homes crossed over that threshold last quarter, and remains at about 6 months in the second quarter, a clear indication that we are going to see some upward pressure on pricing.
Negotiability. Sellers might be gaining a bit of leverage with buyers. The average days‑on‑market fell sharply, dropping almost 7% and now down to almost two months of market time. So homes are getting into contract more quickly. Similarly, sellers were becoming slightly more demanding on pricing, with the listing retention rate closing on 97%.
Condos & Coops. Bergen condo sales and prices were both up sharply, demonstrating that buyer demand in the county might be particularly strong in the entry‑level markets. Condo sales were up over 8%, consistent with what we saw in single‑family homes. But pricing was far more robust, with the average up almost 13% and the median up over 6% compared to last year. Those types of increases are not sustainable, but the rolling year increase of 4% on average and 2% in the median are probably what we can expect for the rest of the year.
Going forward, we remain confident that Bergen County is slowly moving into a strong seller’s market. Although we are not yet seeing price appreciation in the single‑family market, we expect that increases in buyer demand, coupled with a decline of inventory, will eventually drive meaningful appreciation like we are seeing in the condo 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.
Second-Quarter 2016 Real Estate Market Report: Northern New Jersey Market Overview
The Northern New Jersey housing market continued to surge in the second quarter of 2016, with sales up sharply throughout the region. But rising levels of buyer demand are not yet having any real impact on pricing, which was flat or down in each of the counties.
Sales were up over 13% 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, sales are up about 40% from the bottom of the market and are moving in a positive direction.
We are also seeing inventory continue to tighten. 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. 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. That’s where we are right now in Bergen and Morris, with both counties near the 6‑month threshold, and inventory in the other counties is tightening considerably.
Even with sales up and inventory down, though, average prices dropped throughout the region. We have been a little disappointed in the pricing this year, after what looked to be “green shoots” of price appreciation toward the end of 2015. Certainly, basic economics of supply and demand would tell us that after five years of steadily increasing buyer demand, we would expect to see some meaningful price increases. But appreciation still eludes us. It might be that the market is simply stronger in the lower‑end than the middle‑ or higher‑end, which is changing the mix of properties sold and skewing the averages. Or it could still just be a matter of time before falling inventory and rising demand starts impacting pricing.
Going forward, we still believe that we are heading for a seller’s market. Sales have now been increasing for almost five years, which has brought inventory to the seller’s market threshold in much of the region. 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 continue to believe that price appreciation is coming, and that the region will experience a robust summer market that continues throughout the rest of 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.
First Quarter 2016 Real Estate Market Report: Bergen Market Overview
The Bergen County housing market started 2016 off strong, with sales way up and clear indications of increasing buyer demand.
Sales. Bergen single-family home sales started the year with a flourish, rising over 19% for the quarter and marking the sixth straight quarter of year-on-year sales increases. Indeed, we are starting to see transactions at “seller market” levels, with over 6,000 sales over the rolling year, which is comparable to the sales totals during the last seller’s market.
Prices. Although prices were basically flat for the quarter, we are continuing to see consistent, if modest, long-term price appreciation. Over the past rolling year, prices have been up almost 2% on average and over 4% at the median, which is the type of long term appreciation that is generally sustainable. We’re still seeing pricing at non-inflation adjusted 2004 levels, about 15% below the height of the market in 2006, but we’re moving in the right direction.
Inventory. The “months of inventory” indicator measures how long it would take to sell out the existing inventory of homes at the current rate of home sales. In the industry, we generally consider anything below six months as a signal for a seller’s market, where tight inventory leads to multiple-offer situations, bidding wars, and ultimately appreciating prices. So the fact that Bergen single-family homes crossed over that threshold in this quarter is a clear indication that we’re looking at a burgeoning seller’s market in the county.
Negotiability. The negotiability indicators showed that sellers might be gaining a bit of leverage with buyers. In the quarter, the average days on market were flat, but they’re now down 6.5% for the rolling year. So homes are getting into contract more quickly. Similarly, sellers were becoming slightly more demanding on pricing, with the listing retention rate closing on 96%.
Condos & Coops. The Bergen condo market was up sharply, with both sales and prices surging. Condo sales were up almost 26% for the quarter, finishing the rolling year up over 11%. But the real story was prices, with both the average and median price spiking over 7% for the quarter and now in positive territory for the year. Those types of price increases are probably not sustainable, but we do believe that Bergen condos will experience meaningful price appreciation through the end of the year.
Going forward, we remain confident that Bergen County is slowly moving into a strong seller’s market. Buyer demand is strong, which is driving up sales and starting to have a long-term 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 a robust spring market and throughout 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 2015Q4
The Bergen County housing market continued to expand in the fourth quarter, with both sales and prices up. For the calendar year, Bergen saw a solid increase in sales and modest but measurable price appreciation.
Sales. Bergen single-family home sales finished the year strong, with sales up almost 8% for the quarter and over 10% for the calendar year. This marked the fifth straight quarter of year-on-year sales increases. Indeed, we are starting to see transactions at “seller market” levels, with the 6,103 calendar year sales higher than any year since 2006.
Prices. With these sustained increases in buyer demand, we’re also seeing consistent, if modest, appreciation in pricing. Prices were up for the quarter, rising almost 1% on average and 5% at the median. And, for the year, prices were basically flat on average, with a more robust 3.4% increase at the median. We’re still seeing pricing at non-inflation-adjusted 2004 levels, about 15% below the height of the market in 2006, but we’re moving in the right direction.
Negotiability. The negotiability indicators implied that sellers might be gaining a bit of leverage with buyers. In the quarter, the average days-on-market fell sharply, dropping almost 13%, so homes were getting into contract more quickly. Similarly, sellers were becoming slightly more demanding on pricing, with the listing retention rate closing on 96%.
Condominiums. The Bergen condo market was up sharply, with sales rising almost 16% for the quarter and over 5% for the year. Pricing was mixed, with the average up for both the quarter and the year but the median down. We expect that if buyer demand continues to grow, it will start to drive meaningful price appreciation in this entry-level market.
Going forward, we remain confident that Bergen County is slowly moving into a seller’s market. 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 a robust spring market and throughout 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 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.
