Prices in the Bergen County housing market surged again in the second quarter of 2017, even while low levels of inventory suppressed sales growth.
Sales. With inventory continuing to decline, Bergen lacks “fuel for the fire” to satisfy the existing buyer demand. As a result, home sales were relatively flat again, up only about 1% from last year’s second quarter and now up less than 4% for the rolling year. This does, though, mark the 11th straight quarter of year-on-year sales growth. What’s holding sales back right now is not a lack of demand, but a lack of inventory. If we start seeing more homes hit the market, we’ll see sales go up sharply.
Prices. Bergen prices spiked again in the second quarter, up 6% on average and almost 5% at the median. That’s probably not a sustainable level of price appreciation, but Bergen homeowners can certainly start to depend on the 3-4% increases that we are seeing on average and at the median for the last rolling year.
Negotiability. Inventory continued to tighten in the second quarter, with the months of inventory falling almost 12% and now down to well under six months, which normally marks the beginning of a seller’s market. Similarly, homes are continuing to sell more quickly and for closer to the asking price, which is what we would expect of an emerging seller’s market. The listing retention rate is now almost 97%, and the days-on-market is down to two months. As inventory tightens and the market heats up, we would expect to see sellers continue to gain negotiating leverage.
Condos. Activity in the Bergen condo market was up sharply in the second quarter, with sales up over 9% from last year. Prices were more mixed, with the average down a tick but the median up almost 4%. With inventory now down well below six months, though, we would expect to see more meaningful price appreciation this year.
Going forward, we expect Bergen County will enjoy a robust Summer market with both rising sales and prices. With inventory tightening, a relatively strong economy, near-historically-low interest rates, and prices still at attractive 2004 levels, we believe that sustained buyer demand will continue to drive meaningful price appreciation through the rest of 2017.