Timothy Waller's August 16, 2018 Newsletter
Housing Recapitulation By Eric Funk
NJ Housing Recapitulation Explained– April 15th – Eric Funk – Licensed Realtor – 551-587-2359
According to a recent housing report listing volume is down over 10% from the last quarter of 2017. Sales and prices have decreased for higher priced homes in most suburban areas. Opinions vary but low supply and high demand are in play. The number of distressed sales and overpriced rundown homes skew these results downward. Updated homes are at an all-time high price and they are few in numbers which is often leading to a bidding war on the most desirable properties. Homes with prices of $400,000-$800,000 is seeing the most activity. Bidding wars from 2015-16 have moved as far north/west as Sparta and Mount Olive areas. Bergen/Hudson/Morris/Union Counties and commutable areas are also tightening. There is no shortage of willing and able buyers.
Overall inventory is down approx. 8.0% this year. The low inventory level of suitable homes may be causing a lot of issues so far in the spring housing market. As a matter of fact, the lack of inventory, is the most common complaint I am hearing this spring from buyers and colleagues. The agents claim to have a lot of interested buyers but not enough housing inventory to make the sales. In addition, the buyers are becoming more selective about properties and more particular about what they want in a property…despite the lack of inventory! As a result, both the sales cycle and time to close is taking longer. The divide is deepening between listing and buying agents as dual agency deals are threefold over previous years. Not surprising!!
According to the National Association of Realtors, they expect to see flat sales numbers for 2018. There is a good probability that sales will be lower this year than they were last year. This is all just part of a normal housing cycle. We have had a very strong run-up in prices and sales volumes over the past few years and current recapitulation will enable a more orderly turnover of homes. We have also had a longer than normal winter with snow and cold weather continuing into early April! The instability in our political system and the volatility in the stock market since January have more to do with this then tax policy or weakening demand. We will likely continue with an inconsistent market for the rest of this year. Barring any major political unrest, the market will see higher prices over the next several years as the economy is heating up, interest rates are historically VERY low, and buyers keep focusing on winning the bid. Appraisals are coming in due to over ask home sales.