Is it still a seller’s market in Bergen County? The answer is that it depends.
Analyzing The Market
Because residential real estate is seasonal, it’s necessary to compare month to month. While it’s also instructive to look at annual data, you can spot trends comparing month to month.
Over half of all single family homes are sold to families with school aged children. As a result, it’s a seasonal market and most closings occur between June and mid August. This is why the first quarter of each year gives you the picture for the year ahead.
Where We Are So Far
Where we are is recovered. Mortgage rate increases began in late summer and culminated at 4.94% by November. This upset home buyers and stalled the market. However, rates then tumbled down and by January had dropped to 4.35%.
Home buyers came back and came back with a sense of urgency. They see now as an opportunity to grab lower rates before they go up for good later in the year. As a result, they’re out in force.
Comparing 2019 to 2018, January closings were flat while February was up 7%. This makes a lot of sense because sales today originated 2-3 months before. February closings originated when rates were lower.
Under Contract figures also demonstrate recovery. January rose 5% and February 9%. Because it typically takes 7-10 days to get a home Under Contract, this data originated when rates increasingly dropped.
The Year Ahead
The year ahead will have challenges for buyers and sellers alike. Today the NJMLS has 1,987 homes fully available for sale (2,318 – 331 with accepted offers). This is about 1,000 less than you’d expect. With so few for sale there will be less closings this year.
Millennials make up the biggest group of home buyers. They see homes as a lifestyle, not as an investment and are fed up with renting. While millennials want to take advantage of low rates, they will still wait to get what they want. As a result the days of ferocious bidding wars are pretty much over and appreciation will be moderate.
Is it still a seller’s market in Bergen County? Yes but to a limited degree. Low inventory will maintain appreciation albeit at a moderate level. Buyers win with low mortgage rates keeping homes affordable for the spring market. So there’s positives for both sides. The bottom line? Another good year for home sales in Bergen County.