Archive for the 'Market Trends' Category

A few weeks ago, The New York Times ran an Op-Ed piece called “The Death of the Fringe Suburb.” The author, Christopher Leinberger, discusses the collapse of outer-ring suburbs and return to popularity of urban and inner-suburban housing. As a New Jersey Realtor, I feel sadness and concern about the decline of any housing market. I find it fascinating, though, that this trend–occurring in markets all over the country– is a total reversal of the national post-WWII housing shift from cities to suburbs.

Back in the 1950s, cities emptied out as a car and a backyard came to exemplify the American dream.  In succeeding decades, McMansions took root in exurbs, as homeowners sought more and more house on more and more land. According to Leinberger, demand for this type of housing has collapsed and will not recover, due to generational shifts. Baby Boomers (born from 1946-64), are retiring at exactly the same time as Millenials (born from 1979-96) are ready to strike out on their own; neither group is looking for a large house in outer suburbia. Boomers are downsizing from their suburban homes, and Millenials tend to favor urban environments, both for the cultural attractions and the convenience of not needing a car.

Leinberger cites Pasadena, CA and Bellevue, WA as examples where mixed-use developments with good public transit access have been built where strip malls once stood. He also calls for greater public investment in bus and light-rail systems, bike lanes, and pedestrian walkways. His suggestions would provide jobs and help the environment, both of which the U.S. could really use.

For those of us living in Montclair, Maplewood or South Orange, we are fortunate to have much of this infrastructure already in place.  For those who are not, would you give up your 2 acres for a smaller lot and a shorter commute?  Would you trade your Olive Garden for Osteria Giotto? How about your Multiplex for the Wellmont Theatre?

After 12 months of declining year-on-year home sales (due in large part to the post-tax credit hangover of last April), the middle of May saw NJ’s first increase in the number of new contracts written. However, unsold inventory continues to be higher that last year’s. In June, there were an average of 268 homes on the market in Montclair as compared to 233 in June of 2010 and only 28 homes sold, this month compared to 54 last June.  It took on average 19 days longer to sell a home this June as days-on-market increased from 55 to74.  The good news for Montclair is that median sales price increased almost 9% to $620,000 from $569,000 pointing to a market that has strengthened since the crash of last June.

Last June only 2 of the 54 homes (4%) sold in Montclair were over the million dollar mark.  This June, of the 28 homes that sold 7 of them (25%) closed over the million dollar mark with one on Heller Drive selling for $2,549,000 -  a bright spot perhaps for the luxury market.

Heard this weekend while showing some Montclair houses for sale: “disappointed by the kitchens in the current inventory of Montclair real estate – even some of those that have been renovated”

It seems today’s Montclair home buyers expect more out of the kitchen than they did in years past. The dream kitchen of today is not just equipped with Sub-Zero and Viking appliances; it is also centrally located within the house and versatile. Susan Serra, a home designer on Long Island, explains in this month’s issue of Realtor magazine that “Living room and family room activities are merging into the kitchen, and it’s changing how kitchens look.” The kitchen has become the nerve center of the house, where party guests congregate and kids do their homework.

Homeowners are knocking down the walls separating the kitchen from the dining room and even the living room, creating a more open, inviting space. For sellers not looking to do such a drastic overhaul, there are a number of smaller steps that will create the same feel. Serra suggests using sconces and small lamps rather than overhead lighting, for a softer effect. Buyers love extra storage space, so adding a cabinet or wall shelving will add appeal. And most important, don’t skip the basics: make sure the countertops, flooring, etc. are in good condition.

Before you renovate or sell your Montclair home, give me a call or send me an email and I’d be happy to discuss what many of my buyer clients are looking for in the “current kitchen”.

Despite both the state Assembly and Senate voting to approve a tax credit for NJ home buyers, Gov. Christie vetoed the program on July 23. The NJ Home Buyer Tax Credit Program would have allowed home buyers could claim a credit of either $15,000 or 5% of the home purchase price over the course of three years following the home purchase in 2010. $75 million of the $100 million total to be allocated for the credit would have been for the purchase of new homes, to increase the state’s construction as well as provide new jobs for construction workers. The other $25m was to go to those buying resales (older homes). Like the Cash-for-Clunkers program, the $100m total was to be distributed on a first-come-first-served basis.

Assemblymen and state Senators both pointed to the increase in jobs the credit would have brought, not just in the field of construction but also for home contractors, furniture makers, and all the industries involved in building and outfitting new houses. But Gov. Christie has long made it clear that he was against the credit, for the simple reason that the state does not have the money (yet he found $875m available for the embarrassing Xanadu shopping center in the Meadowlands…).

If you are reading this, you are probably one of the 90% of buyers who searched for a home online this year.  According to the National Association of Realtors only 37% performed this activity 10 years ago.  Here are 7 stats that have changed – or not changed over the past decade:

1. 1999: 37% of buyers searched for a home online. 2009: 90% of buyers searched for a home online.
2. 1999: median home value is $137,600. 2009: median home value is $172,600
3. 1999: 82% of buyers purchased detached, single family homes. 2009: 78% of buyers purchased detached, single family homes.
4. 1999: 46% of buyers choose suburban neighborhoods. 2009: 54% of buyers choose suburban neighborhoods.
5. 1999: 68% of buyers were married couples. 2009: 60% of buyers are married couples.
6. 1999 and 2009: the median age for buyers was 39.
7. 1999 and 2009: “neighborhood quality, affordability, and convenience to work and school have consistently been top priorities.”

I bought my Montclair home just over a decade ago –11 years to be exact– and it has doubled in value, current market conditions notwithstanding.  Happy to be living here in Essex County, NJ and not where the median home value has increased by a mere 25% (see #2, above).

(Lani Rosales, December 31, 2009, Agent Genius Blog)

 

 

One of the metrics that buyers use to judge a property is days-on-market (DOM).  Days-on-market is important because it describes how long a property has been for sale without an accepted offer.  After months of increases, many market areas in Essex County have seen DOM leveling off – a good sign for sure, but Nutley has seen  a distinct drop in DOM.  Since April of this year DOM has decreased from a high of 235 to about 180 – a drop of 55 days in the last 4 months – almost 25%.   Notice also that the decline has been consistent and steady for the last 4 months.

 

 

Is this alone evidence of a market turnaround for 07110?  No but its’ a positive sign and  the first step.  This is how the chain of events will happen: First DOM will decrease, which will cause inventory to fall (if homes sell faster, then fewer will be on the market at any given time).  Then with supply decreasing and demand increasing prices will begin to rise again.  Demand is increasing because interest rates remain low and prices have dropped making houses in Nutley affordable once again.