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Better Homes and Gardens Real Estate Rand Realty Quarterly Market Report For 2016Q4 – Morris County, New Jersey
The Morris County housing market finished the year with a sharp increase in sales, but sustained buyer demand throughout 2016 still has not had a significant impact on pricing.
Sales. Morris County sales were up significantly, rising almost 12% from the fourth quarter of last year. This continued a streak in which year-on-year sales have now gone up for nine straight quarters, over two years of sustained buyer demand. Transactions were also up 12% for the year, and are now up about 56% from the bottom of the market in 2011. So sales have now been strong for several years, indicating that buyer demand is growing.
Prices. All this sales activity, though, has not yet had its expected impact on pricing. Prices were mostly mixed for the quarter, falling over 2% on average even while the median was flat. For the year, prices were stubbornly resistant to the increasing buyer demand, falling almost 3% on average and 1% at the median. This was surprising and disappointing, particularly after the modest price appreciation that we saw in 2015.
Inventory. Morris inventory fell again, dropping over 26% from last year’s fourth quarter and now down to 7.3 months. We measure “months of inventory” by calculating the number of months it would take to sell all the available homes at the current rate of absorption, and generally consider anything below six months to signal a seller’s market that would normally drive prices up. So the fact that Morris inventory is now down to just over seven months of inventory could indicate that we will see meaningful price appreciation next year.
Negotiability. The negotiability indicators showed signs that sellers might be gaining leverage with buyers. The days-on-market indicator was down by nine days, falling almost 7%, indicating that homes were selling more quickly. And the listing price retention rate continues to rise, now up to just under 97% for the quarter and the year, signaling 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 relatively affordable 2004 prices (without even adjusting for inflation), interest rates low, and a generally improving economy, we believe that reduced inventory coupled with rising buyer demand will drive price appreciation through 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.
Better Homes and Gardens Real Estate Rand Realty Quarterly Market Report For 2016Q4 – Passaic County, New Jersey
Sales in the Passaic County housing market rose again in the fourth quarter of 2016, but they are still not having their expected impact on pricing
Sales. Passaic sales finished the year strong, rising almost 14% from last year’s fourth quarter and finishing the year up over 12%. We’ve now seen sustained increases in buyer demand for over five years, with quarterly sales up in 20 out of the last 22 quarters. As a result, Passaic closed almost 3,300 homes for the calendar year, the highest total we’ve seen in over 10 years, since the height of the last seller’s market.
Prices. Unfortunately, these sustained increases in buyer demand are not yet impacting pricing. Prices were down fairly sharply for the quarter, falling over 5% on average and almost 3% at the median. And that finished off a calendar year where prices were down almost 3% on average and 1% at the median. This is surprising, because we would normally expect sustained increases in buyer demand to drive meaningful price appreciation. 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. The Passaic inventory of available homes for sale fell again, down over 22% from last year’s fourth quarter. We measure “months of inventory” by calculating the number of months it would take to sell all the available homes at the current rate of absorption, and generally consider anything below six months to signal a seller’s market that would normally drive prices up. So the fact that Passaic is now down to just over eight months of inventory is important, since it presages the possibility of price appreciation in 2017.
Negotiability. The negotiability indicators indicated that sellers are gaining leverage with buyers. The days-on-market were down sharply, falling 15 days from the fourth quarter of last year and now down to under five months of market time. The listing retention rate was relatively flat for the quarter, but up to almost 97% for the year. If the market tightens, we would expect that homes would continue to sell more quickly and for closer to the asking price.
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 these sustained levels of buyer demand, coupled with declining inventory, to finally drive meaningful price appreciation in 2017.
To learn more about Better Homes and Gardens Real Estate Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
Better Homes and Gardens Rand Realty Quarterly Market Report For 2016Q4 – Bergen County, New Jersey
The Bergen County housing market finished strong in the fourth quarter of 2016, with sales up sharply and prices showing signs of meaningful appreciation.
Sales. Bergen single-family home sales were up almost 11% for the quarter, the ninth straight quarter where we’ve seen year-on-year sales growth. And for the year, sales were also up 11%, marking the third straight year of sales increases. Indeed, sales in the 2016 calendar year hit their highest levels since 2005, and are now up 55% from their 2011 bottom.
Prices. These sustained increases in buyer demand showed signs of finally having their expected impact on pricing. Single-family home prices were up almost 4% on average and 3% at the median compared to the fourth quarter of last year, the largest quarterly increase in almost three years. Even with that strong fourth quarter, though, the calendar year was relatively mixed, with the average price down a tick and the median up just about 1%.
Inventory. Bergen single-family inventory tightened dramatically, with the number of available single-family homes falling almost 30% and the months of inventory now down under four months, well below the six-month mark that usually denotes a “tight” market. With inventory this low, and demand staying strong, we would expect some upward pressure on pricing.
Negotiability. The negotiability indicators were relatively mixed for single-family homes, with the days on market down a little and the listing retention rate up a bit. As inventory tightens and the market heats up, we would expect to start seeing sellers gain negotiating leverage, with homes selling more quickly and for closer to the asking price.
Condos. The Bergen condo market was relatively flat in the fourth quarter, with sales down a tick and prices mixed. For the year, though, the results were more encouraging, with sales up 10% and prices up about 4% across the board.
Going forward, we remain confident that Bergen County is slowly moving into a strong seller’s market. With inventory tightening, a relatively strong economy, near-historically low interest rates, and prices still at attractive 2004 levels, we believe that sustained buyer demand will drive meaningful price appreciation in 2017.
To learn more about Better Homes and Gardens Real Estate® – Rand Realty, visit their website and Facebook page, and make sure to “Like” their page. You can also follow them on Twitter.
Better Homes and Gardens Rand Realty Quarterly Market Report For 2016Q4 Overall – Northern New Jersey
The Northern New Jersey housing market finished strong in the final quarter of 2016, with sales up sharply even while pricing continued to struggle. But with inventory levels falling throughout the region, we expect that sustained buyer demand will drive meaningful if modest price appreciation in 2017.
Sales were strong throughout the region. After a relatively slow third quarter, regional sales surged back, rising almost 11% and up sharply in every county in the report: rising 11% in Bergen, 14% in Passaic, 12% in Morris, 11% in Essex, and 18% in Sussex. This strong fourth quarter helped the region close the 2016 year up almost 11% in sales, reaching the highest yearly transactional total in over ten years, since the height of the last seller’s market. Indeed, regional sales are now up 63% from the bottom of the market in 2011.
Inventory continues to tighten. We determine the “months of inventory” in a market by measuring the number of homes for sale, and then calculating how long it would take to sell them all given the current absorption rate. The industry considers anything less than six months to be a “tight” inventory that signals the potential of a seller’s market that would drive prices up. Well, the months of inventory for the Northern New Jersey region has now crossed over that line, dropping down to 5.3 months. Moreover, inventory was down in every individual county in the Rand Report, and is now below or nearing the six-month level: Bergen single-family homes at 3.6 months and condos at 6.1 months, Passaic at 8.3, Morris at 7.3, Essex at 7.0, and Sussex at 11.3. Certainly, if inventory continues to tighten, and demand stays strong, we are likely to see upward pressure on pricing.
Even with sales up and inventory down, though, average prices have been flat or falling throughout the region. Basic economics of supply and demand tells us that after five years of steadily increasing buyer demand, we should expect to see some meaningful price increases. But prices languished, with the regional price down just a tick from last year’s fourth quarter, but down almost 2% for the year. Moreover, the average prices for the year were down in almost all of the individual counties, rising only for Bergen condos, with just a tick up for Sussex. And maybe that’s the tell it might be that the market is simply stronger at the lower end, so lower priced homes (like Bergen condos and Sussex properties) are making up a larger percentage of the mix of properties sold.
Going forward, we remain confident that rising demand and falling inventory will drive price appreciation in 2017. 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 Real Estate® – 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 – Sussex County, New Jersey
The Sussex County housing market surged again in the third quarter of 2016, with sales up sharply and some modest appreciation in pricing.
Sales. Sussex sales were up again in the third quarter, rising 9% from last year and finishing the year up over 23%. 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, Essex 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. These sustained increases in buyer demand are finally having their expected impact on pricing. Average and median sales prices were both up in the third quarter, rising 0.3% on average and over 5% at the median. For the year, prices were down almost 3% on average and almost 1% at the median, but the trend was welcome. It takes time for increases in demand to drive pricing changes, so we believe this trend will continue 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 six 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 months, but that’s down almost 32% 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 – both supported the idea that sellers were gaining negotiating leverage with buyers. The days‑on‑market fell by three days, indicating that homes were selling more quickly. And the listing retention rate rose to over 95%, signaling that sellers were finding it a little easier to get buyers to agree to their list prices.
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 eventually drive 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.
Real Estate Market Report: Third Quarter 2016 – Essex County, New Jersey
The Essex County housing market was a mass of contradictions in the third quarter of 2016, with sales down but prices up.
Sales. Essex activity continued to disappoint in the third quarter, with transactions down almost 3% from last year. This marked the first quarter of year‑on‑year sales declines in almost two years, breaking a six‑quarter streak of sales growth. After a robust beginning to the year, Essex is now significantly underperforming its neighboring counties, with the rolling year sales up only about 3%, well below what we’re seeing elsewhere in the region.
Prices. Even with the slackening of activity, prices showed some signs of life. The average price was up about 4%, with the median up just a tick. This was welcome news to Essex homeowners, since we had seen prices go down over the past two quarters. The overall picture, though, is not promising, with rolling year pricing down over 1% on average and almost 5% at the median.
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. Essex continues to see declining inventory, falling almost 18% in the quarter down to under seven months. That’s a pretty tight market, so we would normally 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%. Those are both positive signals of potential future appreciation.
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 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.
Real Estate Market Report: Third Quarter 2016 – Morris County, New Jersey
The Morris County housing market softened in the third quarter of 2016, with sales up modestly and prices mixed.
Sales. Morris County sales were up only slightly, rising about 4% from the third quarter of last year. Even that tepid increase, though, was enough to continue a two‑year streak in which year‑on‑year sales have gone up for eight straight quarters. The long‑term trend is also relatively encouraging, with sales up 9% for the rolling year.
Prices. This sustained increase in sales, though, has not yet had its expected impact on pricing. Prices were mostly mixed, with the average up a tick and the median down slightly. For the year, the results were a little more discouraging, with the average falling over 2% and the median down over 1%. And after some meaningful price appreciation in 2015, we have now seen prices down for most of this year. This was a little surprising, given that we’ve seen sales activity up for almost two years. Normally, rising sales activity should drive appreciating prices.
Inventory. The good news for Morris homeowners and sellers is that inventory continues to tighten. In the industry, we generally consider anything below six months of inventory as a signal for a “tight” market, leading 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 7.3 months of inventory, falling almost 22% 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 five days. 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 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.
Real Estate Market Report: Third Quarter 2016 – Passaic County, New Jersey
Sales in the Passaic County housing market continued to rise in the third quarter of 2016, but these sustained levels of buyer demand are not yet having their expected impact on pricing.
Sales. Passaic sales were up again in the third quarter, rising over 6% from last year and finishing the rolling year up over 10%. Indeed, we’ve now seen sustained increases in buyer demand for over five years, with quarterly sales up in 20 out of the last 22 quarters. As a result, Passaic closed almost 3,200 homes over the last rolling year, a level Passaic had not reached in over 10 years, since the last seller’s market.
Prices. Unfortunately, these sustained increases in buyer demand are not yet impacting pricing. Prices were down, with the average price falling slightly while the median price was down over 3%. 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 over 20% to 8.3 months, so it’s moving in that direction.
Negotiability. The negotiability indicators both showed that sellers are gaining leverage with buyers. The days‑on‑market were down just a tick 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 end of the year, with the strong possibility of 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.
Real Estate Market Report: Third Quarter 2016 – Bergen County, New Jersey
The Bergen County housing market plateaued in the third quarter of 2016, with sales and prices flat over the summer after a spike in spring activity.
Sales. Bergen sales were flat in the third quarter, rising less than 1% after a pretty robust period over the past two years. Indeed, even with that minimal sales increase, Bergen has now seen eight straight quarters of year‑on‑year sales growth. That sustained period of increasing buyer demand resulted in a rolling year where sales were up 10%, with the 6,657 sales marking the highest twelve‑month total in over ten years — at the height of the last seller’s market.
Prices. Unfortunately, we are still not seeing this sustained increase in buyer demand have any impact on pricing. For the quarter, prices were mixed, with the average down almost 2% and the median up 1%. The same was true for the rolling year, where the average price fell over 1% and the median was flat. As we’ve said before in this Report, 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 simply stronger in the lower‑priced markets, which is driving the average and median price down by changing the mix of properties sold. If that’s the case, then it’s just a matter of time before prices start to go up.
Inventory. Bergen inventory continues to tighten, with the number of available single‑family homes falling 26% and the months of inventory now below the six‑month mark that usually denotes a “tight” market. Indeed, declining inventory might be contributing to the relative slackness in sales, if buyers are on the sidelines waiting for new homes to hit the market.
Condominiums. 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 almost 7%, and pricing was up 4% on average and 5% at the median. This continues a long‑term trend we’ve been watching, with the rolling year average price up almost 5% and the median up 3%. Those are sustainable price increases, and probably foreshadow what we’ll see next year with single‑family homes.
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 modest but meaningful appreciation by mid-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.
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.
