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Real Estate Market Report: Third Quarter 2016 – Westchester County
The Westchester housing market softened in the third quarter of 2016, with sales flat and prices continuing to weaken even in the face of falling inventory.
SALES. Sales activity was up, but not at the pace that we’ve seen over the past few years. Single‑family home sales rose, but only by about 2%. Similarly, coop sales were actually down by almost 3%, and condo sales fell just a tick. Transactions are still up for the rolling year, rising 11% in single‑family homes, 6% in coops, and almost 12% in condos. But we might be seeing a cooling of the sizzling buyer demand that’s been driving sales up in this market for the past five years.
PRICES. We continued to see some weakness in Westchester pricing, with single‑family home prices down 3% on average, 1% at the median, and almost 2% in the price‑per‑square foot. Pricing in the condo and coop markets was a little more mixed, but the overall takeaway is that sustained levels of buyer demand over the past five years have done little to drive price appreciation.
INVENTORY. Inventory levels continue to drop, now under six months of inventory for all property types. That might explain the relative slack in market activity, if buyers are still adjusting to the limited inventory available. But if inventory continues to fall, and demand maintains its current levels, we might see the price appreciation we’ve been waiting for.
NEGOTIABILITY. The negotiability indicators were relatively hopeful. Sellers seem to be gaining a little bit of negotiating leverage, with single‑family home sellers now retaining over 98% of their last list price. And homes are now selling in under six months, which is relatively quick by historical standards.
Going forward, we continue to believe that the fundamentals in the Westchester market are strong. With inventory tightening, pricing at 2004‑05 levels, interest rates near historic lows, and a generally improving economy, we expect that buyer demand will stay strong and eventually drive meaningful price appreciation.
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.
Real Estate Market Report: Third Quarter 2016 – Westchester & Hudson Valley Market Overview
The housing market in Westchester and the Hudson Valley in the third quarter of 2016 defied the standard economic laws of supply and demand. Sales were up and inventory was down, but prices were flat across the board. Why? Maybe buyers are just leery of making a move during a tumultuous presidential election year.
Sales activity continues to increase throughout the region. Sales were up compared to the third quarter of last year in every county in the Report, ranging from a modest 2% increase in Westchester to a robust 18% rise in Orange. We’ve now seen sustained sales increases for almost five years, with regional year‑on‑year sales going up in 17 out of the last 19 quarters. And we’re reaching transactional totals we haven’t seen since the height of the last seller’s market, with the region hitting 15,000 single‑family home sales for the first time since 2016. We did see some signs, though, that the pace of growth might be slowing: regional sales were up only 8% for the quarter, relatively disappointing in a rolling year where sales rose almost 17%.
Inventory continues to tighten throughout the region. The supply of homes for sale is falling throughout the region, down in almost every county in the Report: dropping 20% in Westchester, 31% in Putnam, 17% in Rockland, and 21% in Orange. And if you look at the months of inventory available given the current rate of sales, we are already approaching the six‑month inventory level that usually signals a tight seller’s market. For single‑family homes, Westchester is already below six months at 5.8, and the other counties are getting close: Putnam at 7.3, Rockland at 6.4, and Orange at 8.1. And for condos, it’s the same story: Westchester at 3.7, Putnam at 4.7, Rockland at 7.1, and Orange right at 6.0.
So with demand up and supply down, why aren’t prices rising? Prices were down modestly throughout the region, and in most of the counties in this Report. We can think of three reasons.
- Disproportionate strength in the lower‑end markets. The fact that sales were up 18% in lower‑priced Orange and only 2% in higher‑priced Westchester might be a sign that demand is stronger at the entry‑level. That would tend to drive overall pricing down a bit.
- Buyers are still spooked by the financial crisis and meltdown of 2008‑09. Maybe buyers aren’t yet willing to give in to seller demands for higher prices – that would blunt the impact of declines in inventory, and might also explain why sales increases have tapered a bit.
- The impact of a particularly tumultuous presidential election year. It’s tough to get data on this, because we have so few presidential election years to use as comparison points. But real estate agents have traditionally complained about the difficulty of selling homes during a presidential election – and we expect that this election is especially fraught for home buyers (on both sides).
Going forward, we are hopeful that the market will close the year well. The fundamentals of our regional market are strong: demand is high, inventory is falling, interest rates are near historic lows, and the overall economy is doing fine. Accordingly, we expect that sales will continue to outpace 2015 levels, and believe it’s only a matter of time before these falling inventory levels start driving meaningful price appreciation throughout the region.
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: Sussex County
The Sussex County housing market surged again in the second quarter of 2016, with sales up significantly even while prices continued to struggle.
Sales. Sussex sales were up sharply in the second quarter, rising 23% from last year and finishing the year up over 26%. This continued a trend that we’ve been watching for the past four years, with year‑on‑year sales up almost every quarter since 2012. Indeed, Sussex closings are now reaching levels that we have not seen since the tail end of the last seller’s market, with sales now up about 80% from their 2011 bottom. So the market is in much stronger shape than it has been at any time since the 2008‑09 market correction.
Prices. This spike in sales, though, has not yet had an impact on pricing, which has deteriorated even while buyer demand increased. Average and median sales prices were down again in the second quarter, falling almost 2% on average and at the median. For the year, prices are down even more, falling about 4% on average and at the median for the rolling year. It takes time for increases in demand to drive pricing changes, so we believe this will turn around if buyer demand remains at its current levels.
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 6 months as a signal for a seller’s market, where tight inventory leads to multiple offer situations, bidding wars, and ultimately appreciating prices. Sussex inventory remains well above that threshold, at 12.4 months, but that’s down over 26% from last year.
Negotiability. The negotiability indicators – the amount of time sold homes were on the market, and the rate at which sellers were able to retain their full asking price – were a little mixed. The days‑on‑market fell over 11%, indicating that homes were selling more quickly. But the listing retention rate fell, signaling that sellers were having difficulty getting buyers to accept their listing price.
Going forward, we believe that Sussex is poised for better things. Buyer demand has been strong for almost four years now, which is bound to eventually have a positive effect on prices. With an improving economy, homes priced at attractive levels, and near‑historically low interest rates, we expect buyer demand to stay strong through a robust summer 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: Essex County
The Essex County housing market stalled in the second quarter of 2016, with sales up slightly but prices continuing to struggle.
Sales. Essex activity was a bit disappointing in the second quarter, with transactions up only 4% after a robust beginning to the year. Any kind of increase is a good sign for Essex homeowners, of course, but sales were up much more sharply in all of Essex’s neighboring counties. On the positive side, this did mark the sixth straight quarter of year‑on‑year sales growth, and rolling year sales are up over 8%.
Prices. Prices continued to struggle, dropping over 4% in the average and almost 5% at the median. After some modest price appreciation in 2015, we thought that Essex had put the correction behind and was poised for some meaningful price increases. But we’ve now had prices go down in two straight quarters, and the rolling year trend is down about 4% on both the average and the median. We still think that basic economics of supply and demand suggest that prices will go up this year if demand stays at its current levels.
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 6 months as a signal for a seller’s market, where tight inventory leads to multiple offer situations, bidding wars, and ultimately appreciating prices. Essex crossed that threshold in the first quarter, but a surge of new listings in the spring brought the months of inventory back to 7.6 months. Still, that’s a pretty tight market, so we would expect to see some upward pressure on pricing.
Negotiability. The negotiability indicators – the amount of time sold homes were on the market, and the rate at which sellers were able to retain their full asking price – suggested the sellers might be gaining just a little bit of negotiating leverage. The days‑on‑market fell just a day, but the listing retention rate was up to almost 100%, which is really unusual in a depreciating market. We would expect those numbers to continue to tighten in an improving market.
Going forward, we expect that Essex County’s sales activity will eventually have a meaningful impact on pricing. With homes still at historically affordable prices, interest rates low, and a generally improving economy, we believe that buyer demand will strengthen and drive modest but meaningful price appreciation by the end of the year.
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: Morris County
The Morris County housing market surged again in the second quarter of 2016, with sales up sharply. Despite increasing buyer demand, though, prices still disappointed.
Sales. Morris County sales were up almost 18% in the second quarter, marking the seventh straight quarter of year‑on‑year sales growth. The long‑term trend is also encouraging, with sales up almost 10% for the rolling year. Indeed, we nearly crossed the 6,000‑transaction threshold for the rolling year, which would be the first time we hit that level in almost ten years, at the tail end of the last seller’s market.
Prices. This surge in sales activity did not, though, have its expected impact on pricing. Prices were down sharply, dropping almost 6% on average and almost 2% at the median. And after some meaningful price appreciation in 2015, we have now seen prices down for the first half of the year, driving the rolling year average price down over 3%. This was a little disappointing, given that we’ve seen sales activity up for almost two years. Normally, rising sales activity would drive appreciating prices.
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 6 months as a signal for a seller’s market, where tight inventory leads to multiple offer situations, bidding wars, and ultimately appreciating prices. By that measure, we are certainly moving toward a seller’s market, with Morris now down to 8.0 months of inventory, falling almost 38% from last year.
Negotiability. The negotiability indicators showed only modest signs that sellers might be gaining leverage with buyers. The days‑on‑market indicator was relatively flat, falling by just one day from last year. And the listing retention rate was up just a tick, indicating that sellers might be having a bit more success getting buyers to meet their asking prices.
Going forward, we expect that Morris County’s sales activity will eventually have a meaningful impact on pricing. With homes still at historically affordable prices, interest rates low, and a generally improving economy, we believe that buyer demand will strengthen and eventually drive modest but meaningful price appreciation by the end of the year.
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: Passaic County
The Passaic County housing market surged again in the second quarter, but another sharp increase in sales is still not having its expected impact on pricing.
Sales. Passaic sales were up again in the second quarter, rising almost 22% from last year and finishing the rolling year up over 15%. Indeed, we’ve now seen sustained increases in buyer demand for over five years, with quarterly sales up in 19 out of the last 21 quarters. As a result, Passaic closed over 3,000 homes over the last rolling year, a level Passaic had not reached since the seller’s market of the mid 2000’s.
Prices. Unfortunately, these sustained increases in buyer demand are not yet impacting pricing. Prices were mixed, with the average price falling almost 2% while the median price was up almost 2%. We would normally expect sustained increases in buyer demand to drive meaningful price appreciation, but Passaic pricing has been stubbornly resistant over the past few years. It may just be a matter of time, but basic economic principles would indicate that increasing demand, coupled with declining inventory, should drive prices higher.
Inventory. We generally consider anything below six months of inventory as a signal for a seller’s market, where tight inventory leads to multiple offer situations, bidding wars, and ultimately appreciating prices. Passaic County is still working its way to that level, but inventory was down 31% to 9.2 months, so it’s moving in that direction.
Negotiability. The negotiability indicators both indicated that sellers are gaining leverage with buyers. The days‑on‑market were down slightly for the quarter, signaling that homes were selling a little more quickly. And the listing retention rate was up, indicating that sellers were getting closer to their asking price. Together, they show that sellers are slowly gaining some bargaining power with buyers, which should eventually lead to modest price appreciation.
Going forward, we believe that Passaic’s fundamentals are sound, with homes priced at relatively attractive levels, rates near historic lows, and a stable economy. Accordingly, we expect buyer demand to stay strong through the summer market, and eventually start driving some modest but meaningful price appreciation by the end of the year.
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.
Second-Quarter 2016 Real Estate Market Report: Dutchess County
The Dutchess County housing market surged forward in the second quarter of 2016, with strong increases in sales activity coupled with modest but promising signs of price appreciation.
Sales. Dutchess single‑family home sales were up again in the second quarter, rising 18% from last year. This marked the seventh quarter in a row with year‑on‑year‑sales increases, leading to a rolling year where sales were up almost 28%. With almost 2,400 sales over the rolling year, Dutchess is now closing homes at a rate that rivals what we saw during the last seller’s market.
Prices. We continue to see the first “green shoots” of price appreciation in Dutchess, with prices up just slightly on average but rising over 5% at the median. For the rolling year, pricing is flat, but we are starting to see signs that prices might be moving in a positive direction. With the sustained increases in sales activity that we’ve seen for the past two years, we are bound to see an impact on pricing eventually.
Inventory. Dutchess inventory continues to decline, now down over 25% to 13.5 months of active single‑family listings. Although we are nowhere near the six‑month level of inventory that usually signals a “seller’s market,” we are certainly seeing some tightening that could support the price appreciation we are expecting.
Negotiability. The negotiability indicators show that Dutchess sellers might be starting to get some leverage with buyers. Homes were selling for a little closer to the asking price, with the listing retention rate up above 96% for the first time since the last seller’s market. And the days‑on‑market fell again, now down below six months.
Condominiums. The condo market was also up, with sales rising over 8% and prices a little mixed. For the year, condo sales are up over 28%, but pricing is down on average and at the median. Inventory continues to tighten, though, which could stabilize pricing later this year.
Going forward, we believe that Dutchess is on the precipice of meaningful price appreciation. Sales have been up for several years in a row, and it’s only a matter of time before these levels of buyer demand start driving prices up. With a stable economy, low interest rates, and homes still priced at appealing 2004 levels (without even controlling for inflation), we believe that Dutchess is poised for better things by the end of this year.
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: Putnam County
The Putnam County housing market surged in the second quarter of 2016, with dramatic increases in both sales and prices.
Sales. Putnam sales spiked in the second quarter, with single‑family home closings up over 36% compared to last year. The Putnam market is just sizzling, with transactions up in eight straight quarters and 16 out of the last 17. Indeed, the 1,049 closings marked the first time we have seen Putnam top 1,000 sales in a 12‑month period since early 2006, at the tail end of the last seller’s market. Condo sales were also strong, rising over 14% for the quarter and now up 31% for the rolling year.
Prices. These sustained levels of buyer demand had their expected impact on pricing, with single‑family prices up across the board compared to last year: 3% on average, 10% at the median, and 7% in the price‑per‑square foot. These results were consistent with the rolling year appreciation, which was up 3% on average, 7% at the median, and 3% in the price‑per‑square foot. Condo pricing was a little more mixed, but the overall trend was strongly positive.
Inventory. Inventory was down again, falling 38% to 8.7 months of active single‑family listings and 5.4 months for condos. Anything below six months usually signifies a tight seller’s market, which would continue to drive the kind of appreciation we are seeing in Putnam.
Negotiability. The negotiability indicators showed that single‑family sellers were gaining leverage with buyers, with the listing retention rate rising and days‑on‑market falling. The retention rate in condos was flat, but the days‑on‑market fell severely, dropping 25% to under six months of market time. We would expect homes to continue to sell more quickly and for closer to the asking price as the market heats up.
Going forward, while we do not believe that the current levels of price appreciation are sustainable, we do believe that the fundamentals of the market are strong, with demand high, prices at attractive levels, interest rates near historic lows, and a gradually improving economy. Accordingly, we expect Putnam to enjoy a robust summer market, and experience more modest price appreciation through the end of the year.
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.
