Where is real estate going is a question that comes up at the beginning of every year. No one has a perfect crystal ball but looking at the dynamics of the market gives us a pretty good idea.
Mortgage rates rose in 2018 and will again in 2019. We began 2018 at 3.85% and rose to 5% by early fall. As rates go up, affordability goes down. This resulted in a steeper 3rd quarter decline than the year before.
Rates started falling throughout the fall and were back down to mid 4% by December and have been holding there since. Once people got through the holidays, buyers came back in a major way 2 weeks ago. Bankers tell me that rates should stay in this range for the next few months.
Stability is the word to use. While you need to look at a town specifically to really know what’s happening, overall the stabilization that began in 2017 continued.
The number of sales rose 1% from 12,624 to 12,700. Days on market reduced by about 5 days – from 66 to 60.8. That’s 4% fewer days but I’m sure you’ll agree selling a house 5 days quicker really isn’t dramatic. Prices were pretty flat too. The average sales price in Bergen County rose 2% from $511,282 to $523,087.
Inventory is the number of available homes for sale. If you’ve been looking for a home, you know the inventory stinks. There isn’t a lot to look at. Since the 14% rise between 2015 and 2016, inventory levels have been flat. We have sales of 12,257 in 2016, 12,624 in 2017 and 12,700 in 2018. This is just 4% more sales since 2016 (appreciation was only 5%).
Demand has increased tremendously since 2016. You see that by the sharp decline in how long a home stays for sale. Days on market dropped 17%. Homes sold nearly 2 weeks quicker and that’s huge.
The Bottom Line
Today there are only 2,178 Bergen County homes for sale in the New Jersey MLS. This is another low inventory year. Mortgage rates while good are nearly 1% higher than at the start of 2018. As a result the market will remain stabilized because higher rates + prices up a bit mean homes today cost more. 2019 seems like a repeat of 2018 and that’s good.
So where is real estate going in Bergen County? Its going to continue it’s positive, stable trend. This is a general view of the market; where you live or want to buy might be different. Contact me if you’d like to know about any particular area or neighborhood.