I poured over the statistics today for Northern Bergen County to see why it’s been so difficult for some my buyer clients to find the right house this year. The well priced homes go fast. Houses are selling over list price. There are bidding wars. It’s been a frustrating year for buyers, as it is a sellers' market here in Bergen County. Home prices have not really shot up in our area though like in some other parts of the state. It’s not usual for towns like Upper Montclair for homes to sell $100 to $150k over their list price (probably a bubble)!
Let’s take a look at the stats.
I am going to compare Jan 1st to June 14th time period for the past 5 years in Northern Bergen County
Total Sales Total Listings Days on the Market
2012 499 1552 108
2013 597 1552 88
2014 590 1602 82
2015 563 1840 80
2016 693 1843 75
These stats are all for single family home sales. The days on the market has decreased a remarkable 33 days since 2012.
The amount of new listings aren't keeping pace with the total sold. So basically the market isn't keeping with up the demand. Inventory levels are only very slightly up over 2015, but total sales are up by 130 houses!
The market isn’t quite making sense though. Even with demand up, the average and median single family home price is down 3%!
There is one other barometer we use in real estate called absorption rate. Absorption rate is the number of months it would take to sell the currently listed homes in the market.
Absorption rate less than 5 months = seller’s market
Absorption rate equals 5-7 months = balanced market
Absorption rate greater than 7 months = buyer’s market
The current absorption rate for Northern Bergen County is 3.41, so it’s an extreme seller's market, yet home prices in the area went down. It’s a strange market this year. We still have a high inventory of foreclosures here in New Jersey, high property taxes, unemployment/under employment, and homeowners still under water which is likely causing the stagnant and even declining home prices in some towns.
So buyers, hang in there and don't get discouraged. It's not you, it’s the current market!