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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 – 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: 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: 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: 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.
So What’s Going on in the Passaic County Real Estate Market?: The Rand Quarterly Market Report for 2015Q4
The Passaic County housing market closed strong in the fourth quarter of 2015, with solid increases in both sales and prices. As a result, Passaic finished its third straight year of meaningful price appreciation, clearly indicating that it is moving into a seller’s market.
Sales. Passaic sales continued to go up in the fourth quarter, rising almost 7% and finishing the year with a 13% increase off 2014 levels. Indeed, we’ve now seen sustained increases in buyer demand for over four years, with quarterly sales up in 17 out of the last 19 quarters. Moreover, the almost 3,000 sales for all of 2015 marked the highest calendar year total since 2006, at the height of the last seller’s market.
Prices. Although prices bounced around a little in 2015, they finished the year strong. In the fourth quarter, prices were up almost 5% on both the average and at the median. And even with the ups and downs throughout the year, Passaic still finished 2015 with a solid 2.1% increase in the average and 3.1% at the median, marking the third straight year of modest, but meaningful, price appreciation. Prices still have a long way to go to recover from the market correction of 2008-09, but they are moving in the right direction.
Negotiability. The negotiability indicators were mixed. The days-on-market were slightly up for both the quarter and the year, signaling that it was taking longer for homes to get sold. But the listing retention rate was also up, indicating that sellers were gaining some negotiating leverage with buyers, and were better able to command closer to their asking prices. As buyer demand continues to heat up, we would expect sellers to gain more negotiating power, leading to higher prices overall.
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 flower into a fully-realized seller’s market in 2016, marked by continued 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.
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.
