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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.
First Quarter 2016 Real Estate Market Report: Sussex Market Overview
The Sussex County housing market surged again in the first quarter of 2016, with a dramatic spike in sales that continued a long.term trend of markedly higher transaction rates. Nevertheless, we are still not seeing these sustained levels of buyer demand have their expected impact on pricing, which was down yet again.
Sales. Sussex sales were up sharply in the first quarter, rising over 32% from last year and finishing the year up almost 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 almost 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, with sustained levels of buyer demand.
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 first quarter, falling almost 9% on average and almost 2% at the median. Moreover, prices have been trending downward now for several years, in defiance of what we would expect from normal economic behavior. Generally, 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 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 9.6 months, but that’s down almost 17% from last year, so it’s generally tightening.
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 a little bit of negotiating leverage. The days on market fell over 5%, indicating that homes were selling more quickly. And the listing price retention rate was up over a full point, indicating that homes are selling for closer to the asking price.
Going forward, we do expect better things for the Sussex market. We believe that buyer demand will stay strong through 2016, especially with a relatively strong economy, homes priced at attractive levels, and near historically low interest rates. And if buyer demand stays at its current levels, we expect that Sussex will at least see prices stabilize during the year, with a chance at meaningful price appreciation by 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.
First Quarter 2016 Real Estate Market Report: Essex Market Overview
The Essex County housing market started the year strong, with a surge of sales activity. But even with demand up, prices went down sharply, indicating that the county has not yet developed into a “seller’s market.”
Sales. Essex County sales were up sharply in the first quarter, rising over 13% for the quarter, marking the fifth straight quarter of year on year sales growth. The long.term trend is also encouraging, with sales up over 10% for the rolling.year and now regularly clearing almost 5,000 yearlong sales, which is comparable to what we saw at the tail end of the last seller’s market.
Prices. This spike in sales activity did not, though, have its expected impact on pricing. Prices were down sharply, dropping over 8% in the average and 4% at the median. And after some modest price appreciation in 2015, the long.term trend turned downward, with the weak first quarter driving the rolling year average and median both down almost 1%. Why would prices go down as sales go up? One explanation could be that the market was relatively stronger in the lower priced entry level markets, which would change the mix of the properties sold and drive down the overall pricing. We will keep our eye on this dynamic for the next Report.
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 has already crossed that threshold, which is what makes the decline in pricing so surprising. Given how tight inventory is, we do expect to see some meaningful appreciation in the spring market.
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 a little bit of negotiating leverage. The days on market fell almost 5%, indicating that homes were selling more quickly. And the listing price retention rate was up sharply, cresting 98%, indicating that homes are selling for closer to the asking price.
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 more meaningful price appreciation in 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.
First Quarter 2016 Real Estate Market Report: Morris Market Overview
The Morris County housing market recovered from some late 2015 doldrums to post a robust start to 2016, with a spike in sales. Even with this surge in activity, though, pricing was disappointing.
Sales. Morris County sales were up sharply in the first quarter, rising almost 17% for the quarter, marking the sixth straight quarter of year-on-year sales growth. The long-term trend is also encouraging, with sales up over 9% for the rolling year and now regularly clearing over 5,500 yearlong sales, which is comparable to what we saw at the tail end of the last seller’s market.
Prices. This spike in sales activity did not, though, have its expected impact on pricing. Prices were down sharply, dropping over 5% in both the average and the median. And after some meaningful price appreciation in 2015, the long-term trend turned downward, with the weak first quarter driving the rolling year average and median price into negative territory. Why would prices go down as sales go up? One explanation could be that the market was relatively stronger in the lower priced entry-level markets, which would change the mix of the properties sold and drive down the overall pricing. We will keep our eye on this dynamic for the next Report.
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. Morris has already crossed that threshold, which is what makes the decline in pricing so surprising. Given how tight inventory is, we do expect to see some meaningful appreciation in the spring market.
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–tracked the decline in the pricing. Neither indicator showed the expected result: the days on market went up a tick, and the listing retention rate went down. In other words, sellers lost a little bit of negotiating leverage, a dynamic that doesn’t make any sense in a quarter where sales were up 17%. We think this is a short-term blip, and expect homes to sell more quickly and for closer to asking price in the spring market.
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 drive more meaningful price appreciation in 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.
First Quarter 2016 Real Estate Market Report: Passaic Market Overview
The Passaic County housing market started off 2016 with an increase in sales coupled with mixed results in pricing. Most indicators, though, signal that Passaic continues to develop as a classic “seller’s market” that will likely drive sales and prices up through the rest of the year.
Sales. Passaic sales were up again in the first quarter of 2016, rising over 8% from last year and finishing the rolling year up almost 11%. Indeed, we’ve now seen sustained increases in buyer demand for almost five years, with quarterly sales up in 18 out of the last 20 quarters. As a result, the almost 3,000 sales over the past rolling year approaches the kinds of sales totals we last saw during the last seller’s market. Demand in Passaic shows no signs of abating.
Prices. Prices were mixed, with the average price falling while the median price was up a tick. We would normally expect sustained increases in buyer demand to have a stronger impact on driving prices up, but Passaic pricing has been bouncing around a bit over the past few years. Looking at the longer term trend, the rolling year prices are up more convincingly, with the average rising almost 2% and the median up over 3%. Those are sustainable levels of price appreciation, so we expect that to continue through 2016.
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. Passaic County is approaching that level, and inventory is clearly tightening quarter by quarter.
Negotiability. The negotiability indicators both showed 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 also up, indicating that sellers were getting closer to their asking price. Together, they show that sellers are slowly gaining some bargaining power with buyers.
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 that Passaic County will continue to flower into a fully realized seller’s market in 2016, marked by sustainable increases in both sales and 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.
