by James Stefanile, ABR, GRI, SRES, QSC, gCertified, REALTOR/Salesperson, Berkshire Hathaway Home Services New Jersey Properties, Montclair Office
Last month I highlighted the stats and projections from the Otteau Valuation Group seminar I attended.
Those were both state-wide and local and a look forward. This time, let’s look back and deeper into the local Essex County stats for the last 5 years, starting with the days on market and percentage of what sellers received vs. what they asked:
I’ve highlighted Montclair to show the flow of the charts but it’s not the only township which has shown growth over the years. Notice that the lowest sellers are getting is 95% of what they asked and that’s in only 1 town. Growth over the 5 years is also strong in this category for most towns or consistent at a high levels for some towns. Montclair and Glen Ridge stand out where sellers are getting 108% and 106% of what they ask respectively. 6% or 8% may not seem like much until you consider we’re talking about 6% or 8% of hundreds of thousands of dollars.
You’ll also notice a steady decrease in the days on market across the board.
The table above shows an increase in number of closings overall, sometimes dramatically do over the 5 year span. As for prices, while the 5 year price appreciations have been in double digits overall, a couple of towns have slipped or appreciated slowly in the 5 year look-back. Even more interesting is the 2017-2018 comparison where more than a few towns have lost ground or only advanced slightly. Even stellar Glen Ridge has slipped slightly. Poor Cedar Grove got clobbered in 2018 vs. 2017 and surprising Caldwell has become the league leader with an 18% appreciation year over year.
There are, as always, various factors and variables that account for ups and downs. Some may be anomalous (more sales in one price range or another, for example). Most of the year over year figures coincide with the general stabilizing trend in the NJ housing market. The balance advantage between seller and buyers is equalizing so price reductions and lower initial asking prices can contribute the overall trends.
Finally, this table shows the total number of listings taken per year and the absorption rate per town. The absorption rate is the time it would take to sell what’s on the market expressed in months. Most towns have a lower absorption rate vs. 2014 (some only a little bit lower), but a couple have rates that have risen substantially. These are towns with a greater proportion of luxury properties. That segment has been losing steam for about a year. Overall, the rate has fallen almost by half.
It’s hard not to miss the fall off in number of listings taken over the 5 year period. The further you get from the recession, the smaller the amount of listings taken as inventory falls to the low point we have today. It’s striking that 7 towns have listing numbers in 2018 that were lower than 2017. Don’t be fooled by positive percentages of listings taken year over year ’17 to ’18 like the 33% increase in Glen Ridge. That represents just 6 more listings. The impressive 22% increase in Bloomfield only represents and additional 27 homes for sale. Overall the number of listings taken has decreased, a sign of the lack of inventory today.
As usual, in Essex County there are stand-out towns where the news is always good and a bunch of other places where the market may be flat or, even, declining. If “all politics is local” is a truism, “All NJ towns are different local markets” is the housing market truth.