It might seem early for a Bergen County NJ homes report since we’re only 60 days into 2021. However the market has revealed itself already in several ways. Let’s take a look at the following:
1. New Listings
2. Under Contract
3. Fall Through Rate
4. Absorption Rates
Bergen County NJ homes are not in good supply. I thought 2020 was a problem because the inventory of homes for sale was down by 34%. 2021 is much worse.
There is a devastating difference between both years. 2020 had 1,738 new listings through the end of February. 2021 had 1,208. That’s a 44% decrease.
To be Under Contract in Bergen County means that you have a firm, binding contract. This usually takes 1-2 weeks. A seller signs an offer. It’s sent to the attorneys who review and adjust it. The final version is approved and signed creating a firm, binding contract.
It is logical to assume that with more homes coming on the market in 2020, you’d have more Under Contract. Figures tell a different story. 2021 actually has 10 more at 1,232 to 2020’s 1,222.
This doesn’t make sense. How can you have virtually the same number of UC homes with 44% less inventory? Because you have soaring demand. Great for those who have a house for sale and very tough for buyers.
Fall Through Rate
Fall throughs happen when a contract is cancelled during Attorney Review. This is very important for you to understand.
You can’t change a signed contract. As a result, attorneys cancel the contract they’ve just received so they can create a final version. Nothing holds anyone to the contract they just signed. Why? Because it no longer exists.
Sellers are free to accept a better offer if it comes in. Buyers can cancel because they’ve had second thoughts.
There are 13% more fall throughs this year (408 to 361). While we have no records of why fall throughs happen, experience and logic tell us a lot.
This is a much more competitive year for buyers. Consequently they are more aggressive sending offers during Attorney Review periods. Sellers are more independent with backup offers on the table.
Furthermore both agents and buyers are at fault. Buyers don’t listen. A good number of fall throughs are due to financing. I have written extensively on why shopping for rates doesn’t work. Still buyers insist this is the way to go. There’s also horrible agents who point buyers to terrible so called banks.
An absorption rate measures the activity rate of a real estate market. It shows how long it will take to sell all the homes for sale. You find this by dividing the homes for sale by those sold over the past 30 days.
Today there are 1,026 for sale and 496 sold for a 2.07 month absorption rate. To put this into perspective, the market turns positive at 5 months. Let’s look at a few specific towns:
- Bergenfield 1.9
- Englewood 2.5
- Fair Lawn 0.4
- Paramus 0.9
- Ridgewood 1.6
- Teaneck 1.7
- Tenafly 1.5
Bergen County NJ Homes
Looking at new listings, under contracts, fall throughs and absorption rates has given us a good picture of the market. There is no reason to expect anything different. As a matter of fact, rates went up and nothing’s changed.
Because projections are for appreciation rates to slow next year, this may be the best time to sell your home. Additionally buyers are right to come out in droves. Rates have risen and will do so again in 2021. Mortgages are no different than any other loan. Your loan rate determines how much your home will really cost you.
I hope you enjoyed this article. If you are thinking about buying or selling, please call me at 201-741-8490. You know I’ll do my very best.
All data is from the New Jersey MLS