Somerset County, NJ Residential Real Estate Market Conditions | September 2018 – Bridgewater Township Edition

Somerset County, NJ

Residential Real Estate Market Conditions | September 2018 – Bridgewater Township Edition

Real Estate Market Conditions

Get ahead of the residential real estate market in Somerset County, NJ with Coldwell Banker Residential Broker sales associate, Joe Peters.

This Market Update will not only show you what is happening in your local market area, but it will also explain why it is happening and what is contributing to these results.

“What” it is happening

Based on the last full month’s contract sales, statistics show a supply of approximately four months. Normal market conditions average four to six months in Somerset County.  Units going under contract averaged 57 days on the market. 364 properties went “under contract” in August, down from 423 in the prior month. Newly listed properties in the same period totaled 426.

Somerset County Inventory Breakdown By Price For Last Month:

New Listings Under Contract Active Listings Month’s Supply
Condos/Town Houses * 145 119 382 3
Over 55 Communities* 8 11 23 2
$000K to $199K 35 39 84 2
$200K to $299K 99 80 245 3
$300K to $399K 81 65 223 3
$400K to $499K 53 54 153 3
$500K to $599K 49 42 141 3
$600K to $699K 28 25 111 4
$700K to $799K 19 24 106 4
$800K to $899K 14 12 85 7
$900K to $999K 14 8 89 11
$1,000K and Up 34 15 253 17
Totals for August 426 364 1490 4
Average Price $519,030 $468,431 -9.7%
Average Days on Market 57
* Included in $ breakdowns

Somerset County Sales Breakdown Overview:

  • 65 % of sales in houses < $500,000
  • 30 %of sales in houses > $500,000 and < $1,000,000
  • 04 % percent of total sales (or 15 in total) in houses >$1,000,000

Somerset County Inventory Breakdown By Municipality For Last Month:

Active Listings Under Contract Month’s Supply
Bedminster Twp 69 14 5
Bernards Twp 174 41 4
Bernardsville 84 9 9
Bound Brook 24 12 2
Branchburg Twp 68 14 5
Bridgewater Twp 163 43 4
Far Hills Boro 16 2 0
Franklin Twp 212 85 2
Green Brook 42 7 6
Hillsborough 147 36 4
Manville Boro 35 9 4
Millstone Boro 3 2 2
Montgomery Twp 128 22 6
North Plainfield 56 25 2
Peapack Gladstone 16 4 4
Raritan Boro 13 5 3
Rocky Hill Boro 6 0
Somerville Boro 27 12 2
South Bound Brook 19 3 6
Warren Twp 138 15 9
Watchung Boro 50 4 13
Totals 1490 364 4

Somerset County Sales Breakdown Detailed:

One area in Somerset County reported no sales in the past month

  • Rocky Hill

Two area reported one or two sales each last month

  • Far Hills
  • Millstone

Hotspots:

  • Bernards – 41 sales
  • Bridgewater – 43 sales
  • Franklin – 85 sales
  • Hillsborough – 36 sales
  • Montgomery – 22 sales

These hotspot areas equaled 62% of the sales last month. The average new listing coming on the market last month neared $519,030 The average price of a unit going “under contract” neared $468,431 (10% less).

Note: To get an accurate price point for your property, contact me. Coldwell Banker’s big data technology capabilities will put you at an advantage. Plus, we can now tell you where people are moving into your area from and market to that area directly. Houses priced and marketed accurately sell fast, especially with a real estate industry veteran and local expert helping you navigate the process.

Bridgewater Township Statistics:

  • There are 163 homes for sale in Bridgewater Township as of this writing.
  • Of the 177 homes for sale, 40 are community properties (such as town houses and condos) and none is in our 55+ communities
  • The average list price for all listings in Bridgewater Township is $582,520.
  • There were 50 new listings in Bridgewater Township last month with an average list price of $501,125.
  • There were also forty-three homes that have gone under contract in the past 30 days with an average list price of $448,891 and 49 days on market.
  • Giving us over 3 months of inventory
  • Call for additional details

The initial section of this Market Report reported on “What” is happening.

This section will focus on “Why” it is happening

 

New Jersey’s Economic Drivers:

New Jersey Home Sales:

For the first time in three years, we have seen an improvement in the inventory situation (but is still below what is needed).  Let’s hope that it is the beginning of a trend.

An increase of 1% in home sales in NJ in Year to Date. This is being held back somewhat by a lack of inventory.

Activity concentrates in the under $400,000 market where Millennial buyers transition into home ownership. During the same period, all housing sales showed increases across all other price points showing confidence in the changes made on taxes and deregulation. There has also been an improvement at the very high end in towns where rail service to Manhattan is available.

At the same time, the number of homes offered for sale in New Jersey remained low (but has been improving). The supply decreased by ~ nearly 1,000 homes, compared to a year ago.  Currently, ~30,000 fewer homes are on the market compared to the 2011 peak.

Current unsold inventory in New Jersey varies widely by county with some having only three months.  No county presently has more than nine months of supply.  The average was at 4.1 months compared to 4.3 months a year ago.

We still have an acute shortage of inventory in both Hunterdon and Somerset county in our more popular price points and locations which is the under $400k market.

Hunterdon and Somerset County have 1% more and 5% less inventory respectively than a year ago.  And, those counties have about 9 and 15% less inventory respectively than two years ago.

The fear of increasing interest rates based on future increases and the Fed’s slightly loosening lending standards are driving the current market activity.

Interest Rates:

Interest rates are holding.

The economy is strengthening, and Interest rates at the end of July fall slightly to around 4.5% for a 30-year conventional mortgage. A fifteen-year conventional mortgage rests at just under the 4% mark. Five-year arms are just under the 3.825% range.

Consumer fears of steadily rising interest rates and slowly rising home prices are driving the current market demand. The Fed already instituted several initial increases in rates and are talking about additional ones. Industry analysts forecast to be nearly 5% by the end of 2018, and 5.5% by the end of 2019. If the rate increases from 4% to 5%, buyers will lose 9% of their buying power and have already lost 6% with rate increases over the past few months.

Combine this with the steadily increasing prices and consumer confidence, and you have what is driving our current market activity

National Job Front:

US unemployment rate has risen a bit to 3.9%, the lowest it has been in eighteen years! This trend is expected to continue as a result of the recent tax and jobs reform.

On the national level, the US added nearly 1,500,000+ jobs in January thru July of 2018 and is trending towards 2.5 million added jobs by year-end (a sixteen percent increase over the prior year)

At the end of June, there were 6.7+ Million openings compared to nearly 6.6 Million unemployed persons, with unemployment being the lowest since December of 2000.

And the GDP is predicted to keep expanding.

Consumer confidence is the highest since 2004.

Great news for the housing industry!

New Jersey Job Front:

The NJ unemployment rate fell slightly to 4.2%, bolstering consumer confidence in NJ as well.

NJ added 3,000 jobs in July, and 33,700+ jobs have been added in NJ year to date 2018 as compared to 21,700 for the same period in 2017, and if it continues, NJ could add over 100,000 jobs by year-end.

The level of jobs created was at a much higher level than in the past several years (a silver lining?).

It also should be noted that these jobs are concentrated in the northern half of the state.

Rental Market Trends:

We still have an extremely tight rental market!

Prior restrictive mortgage standards nudged Millennials to postpone home ownership in life later than previously seen. These potential buyers live with parents or share rentals. We are starting to see them now re-enter the rental and first-time buyer markets. The average age of our first-time buyer changed from the late 20’s to the mid 30’s over the past five years.  Older Americans impacted by underfunded retirement plans due to the economic downturn rent houses too.

Rental prices in New Jersey rose ~ 5% in 2017, averaging nearly $1,500 per unit. Current vacancy rates in New Jersey rose to 3.8% with the in northern and southern NY and Philadelphia at 4+%.

We have seen a 2Q2018 rise in rental prices in Central NJ of 2.8% alone. With the demand being what it is, we see new construction in this sector rise almost 400%.

The drop in New Jersey’s homeownership contributes to rental demand.  A 12+ year trend shows a decrease from  71% to 66%.  This 7% decrease compared to an 8% national decrease contributes to the slower recovery of home prices in the state and adds over 20,000+ additional renters in our state.  Households with no children stand at 65%, reflecting the decline in our school population.

One article states that the average homeowner has a net wealth of over $230K while the same for a renter is only around $5K.  It also offers a stable place to live, an evident hedge against inflation and way to build wealth (a strong argument for home ownership).

However, the number of renters has increased by 7% over the past 25 years with the less educated leading the way.  And, we are now seeing more educated millennials moving east into higher rent and cost of living areas that eat into to their discretionary income (including savings).  Makes one wonder where this all is heading…

New Jersey Foreclosures:

New Jersey continues to face high foreclosure rate filings. Other states have begun to, or already have recovered. In a tight real estate market, these foreclosures sell at a small discount.

Note:  Figures vary by local market, especially those walloped by Hurricane Sandy three years ago and rural and urban areas. We rank #4 in the country at 2.8%, led by FL with 4.3% (mostly hurricane-related) & NY, LA, MS and followed by, ME, DE, and PA.  The national baseline number sits at ~ 1.7%.

2017 foreclosure filings decreased slightly to 70,150+ or -5%, putting pressure on home prices in concentrated areas.  Base on the year to date results for 2018 could fall another 7% to around 65,000 filings.

Tax cuts and Jobs Act effect:

Three specific areas had appeared as concerns:

  1. State and Local Taxes (SALT) are now limited to a $10,000 deduction going forward.
  2. Mortgage and Interest Deductions (MID) are now limited to a maximum principal balance of $750,000.
  3. Home Equity Line of Credit (HELOC) Loan interest deductions is for the most part eliminated

Although it is still too early to tell how these areas will impact total 2018 real estate values in New Jersey, they are sure to have some impact. New Jersey is one of the highest taxed states in the union, and our home values are also some of the highest. How this affects each of us on an individual basis needs to be better understood as there is some trade-off such as higher deductions and overall lower income brackets.

The higher income luxury market is probably most at risk.  But how it affects the overall incentive to own a home is still unfolding.

There were several proposals on the new tax code, and most consumers are not up to date on what passed.  It will take time for this information to be digested.

It also is evident that the out-migration from New Jersey to other more affordable states has continued.

In a nutshell, these changes appear to be having little impact to date, but there will be some very high-end people affected, and that will, in turn, affect that market…

That effect might slow the price growth in higher priced homes NJ and even turn into a deficit in some most affluent areas.

Real Estate Market Recap 

Economic conditions:

  • 2017 was the seventh straight year of 2 million + job gains.
  • Although improving in 2018, the NJ job situation had been declining for the past two years.
  • At 4.2% unemployment, NJ is almost 8% above the national average which is currently 3.9%.
  • The best paying and most attractive jobs are in NYC attracting the millennials in that direction.
  • Interest rates have already risen .5% since the first of the year are forecasted to rise another .25 to .5% by year’s end, taking almost 10% away from buyers buying power.
  • And, house prices are rising 6+ % in the popular housing price points further exasperating the situation.
  • Baby boomers are choosing to “stay put’ and update rather than “move up” to their dream house as it is no longer considered a sound investment (and a lot of times is simply not available) which is causing most of the housing shortage.
  • And there is no entry level construction going on in our area.  Just larger homes and new rentals.
  • As a result of the previous two points, we are experiencing the current housing inventory shortage.
  • Foreclosures are on the decline and to some extent are helping to offset fewer listings.
  • Also, there is confidence that the new tax and jobs act will further stimulate the economy with more jobs as the economy remains robust.
  • The new tax rules appear only to affect our very higher-end buyers.

Changes in lifestyle:

  • Average age at marriage is now in the mid to late 30’s (up 7 years from just a decade ago).
  • Families usually have only one to two children due to costs and ability to choose.
  • 65% of all NJ homes have no children of school age.
  • 50% do not have more than 1 person in them.
  • Demand for larger houses has diminished.
  • As a result of the job situation, buyers are gravitating to areas within 15 miles of NYC with good mass transportation systems.
  • 80% of consumers still perceive homeownership as part of the American Dream.
  • It is just what they want to buy (or rent) that has changed.
  • Builders have been thinking 4 BR center hall colonials on 1+ acre in the country.
  • Buyers are thinking luxury hi-rise close to mass transportation and work.
  • And, for the first time in history, Hunterdon County (which has been declining in population) has reported more deaths than births in 2017.

Market conditions:

  • We are starting to see some warnings of an economic slowdown in late 2020 as the fed raises interest rates to curb inflation, and this needs to be monitored.
  • But, in general, homeowners are sitting with more equity than ever and are no longer using their homes as an ATM.  So, the effect of any slowdown on housing should be minimal (if at all).
  • Consumer confidence remains extremely high nation-wide based on the job and stock market increases.
  • This confidence is reflected in buyer traffic being up at open houses.  However, with lack of inventory, there are fewer houses for sale.
  • Millennials make up 24% of our current homeowners with more room for expansion at the lower end of the market when adequate inventory supply materializes.
  • Central New Jersey’s trend for 2016 and early 2017 showed a surge in home sales but price increases only in houses clustered in < $500,000 market where the first-time buyers and Millennials are focused.
  • The >$600K market holds steady to diminishing slightly, depending on location and price.  Often when a >$600K property goes on the market, it’s competing with a >$700K that needs to sell quickly (etc.). The extreme high-end market has also seen some appreciation in 2018 so far.
  • Minimal new construction, lack of entry-level new housing and COAH restrictions add additional value to the current inventory.
  • Analysts five-year forecast indicates slow and steady price growth at an annual 3 to 4%.  This is higher in the under $400K market.
  • There is an acute shortage of inventory in both Hunterdon and Somerset County. In our more popular price points and locations, this holds back sales.  In general, we have only about 50% of the inventory that we had in 2011.
  • In 2017 prices rose ~ averaging just over 3.5% and depending on price points and locations.  2018 promises to be even stronger (without factoring in any tax impact).
  • Mortgage delinquency is normalizing.

Forecast:

  • The economy will continue to prosper with no recession currently in sight for the next 18 + months.
  • Interest rates will Climb to about 5% by year-end further decreasing buying power.
  • Home prices will rise by an average of another 3% during that same period (this will depend on your price point and location).
  • Supply will remain tight in the more popular price points in the residential real estate.
  • Many new jobs seem to be resulting from the Tax and Jobs act.
  • For the first time in memory, the US is reporting 6+ million open jobs and only 6 million unemployed.
  • We now need to match the skills of the unemployed to the job openings to prosper further.
  • The affordability index shows that there is room for much more sales, we just need the increase in inventory.
  • Some decrease in moderate prices home ownership could result in the raising of the standard deduction.
  • Some high-end fall-out could result in the residential real estate from the SALT and mortgage interest changes in the Tax and Jobs act.
  • The commercial real estate market will flourish as a result.
  • Mid-term elections effect is a total unknown at this point.
  • People in their home > 10 years have very positive home equity built up, and a more significant portion of payments applies to principle.  Increases in selling prices should eventually motivate people to make changes in their lifestyle by investing in summer homes or even start a new business with the extra equity cash.

Note:  Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. I took reasonable precautions for presenting this information. Please consult with a professional sales agent and take no actions based on my opinions, gathered trends, and statistics.  I assume no liability.


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Somerset County, NJ Residential Real Estate Market Conditions | September 2018 – Warren Township Edition

Somerset County, NJ

Residential Real Estate Market Conditions | September 2018 – Warren Township Edition

Real Estate Market Conditions

Get ahead of the residential real estate market in Somerset County, NJ with Coldwell Banker Residential Broker sales associate, Joe Peters.

This Market Update will not only show you what is happening in your local market area, but it will also explain why it is happening and what is contributing to these results.

“What” it is happening

Based on the last full month’s contract sales, statistics show a supply of approximately four months. Normal market conditions average four to six months in Somerset County.  Units going under contract averaged 57 days on the market. 364 properties went “under contract” in August, down from 423 in the prior month. Newly listed properties in the same period totaled 426.

Somerset County Inventory Breakdown By Price For Last Month:

New Listings Under Contract Active Listings Month’s Supply
Condos/Town Houses * 145 119 382 3
Over 55 Communities* 8 11 23 2
$000K to $199K 35 39 84 2
$200K to $299K 99 80 245 3
$300K to $399K 81 65 223 3
$400K to $499K 53 54 153 3
$500K to $599K 49 42 141 3
$600K to $699K 28 25 111 4
$700K to $799K 19 24 106 4
$800K to $899K 14 12 85 7
$900K to $999K 14 8 89 11
$1,000K and Up 34 15 253 17
Totals for August 426 364 1490 4
Average Price $519,030 $468,431 -9.7%
Average Days on Market 57
* Included in $ breakdowns

Somerset County Sales Breakdown Overview:

  • 65 % of sales in houses < $500,000
  • 30 %of sales in houses > $500,000 and < $1,000,000
  • 04 % percent of total sales (or 15 in total) in houses >$1,000,000

Somerset County Inventory Breakdown By Municipality For Last Month:

Active Listings Under Contract Month’s Supply
Bedminster Twp 69 14 5
Bernards Twp 174 41 4
Bernardsville 84 9 9
Bound Brook 24 12 2
Branchburg Twp 68 14 5
Bridgewater Twp 163 43 4
Far Hills Boro 16 2 0
Franklin Twp 212 85 2
Green Brook 42 7 6
Hillsborough 147 36 4
Manville Boro 35 9 4
Millstone Boro 3 2 2
Montgomery Twp 128 22 6
North Plainfield 56 25 2
Peapack Gladstone 16 4 4
Raritan Boro 13 5 3
Rocky Hill Boro 6 0
Somerville Boro 27 12 2
South Bound Brook 19 3 6
Warren Twp 138 15 9
Watchung Boro 50 4 13
Totals 1490 364 4

Somerset County Sales Breakdown Detailed:

One area in Somerset County reported no sales in the past month

  • Rocky Hill

Two area reported one or two sales each last month

  • Far Hills
  • Millstone

Hotspots:

  • Bernards – 41 sales
  • Bridgewater – 43 sales
  • Franklin – 85 sales
  • Hillsborough – 36 sales
  • Montgomery – 22 sales

These hotspot areas equaled 62% of the sales last month. The average new listing coming on the market last month neared $519,030 The average price of a unit going “under contract” neared $468,431 (10% less).

Note: To get an accurate price point for your property, contact me. Coldwell Banker’s big data technology capabilities will put you at an advantage. Plus, we can now tell you where people are moving into your area from and market to that area directly. Houses priced and marketed accurately sell fast, especially with a real estate industry veteran and local expert helping you navigate the process.

Warren Township Statistics:

  • There are 138 homes for sale in Warren Township as of this writing.
  • Of the 138 homes for sale, 13 are community properties (such as town houses and condos) and two are in our 55+ communities
  • The average list price for all listings in Warren Township is $1,074,909.
  • There were 22 new listings in Warren Township last month with an average list price of $960,727.
  • There were also fifteen homes that have gone under contract in the past 30 days with an average list price of $849,520 and 70 days on market.
  • Giving us just over 9 months of inventory
  • Call for additional details

The initial section of this Market Report reported on “What” is happening.

This section will focus on “Why” it is happening

 

New Jersey’s Economic Drivers:

New Jersey Home Sales:

For the first time in three years, we have seen an improvement in the inventory situation (but is still below what is needed).  Let’s hope that it is the beginning of a trend.

An increase of 1% in home sales in NJ in Year to Date. This is being held back somewhat by a lack of inventory.

Activity concentrates in the under $400,000 market where Millennial buyers transition into home ownership. During the same period, all housing sales showed increases across all other price points showing confidence in the changes made on taxes and deregulation. There has also been an improvement at the very high end in towns where rail service to Manhattan is available.

At the same time, the number of homes offered for sale in New Jersey remained low (but has been improving). The supply decreased by ~ nearly 1,000 homes, compared to a year ago.  Currently, ~30,000 fewer homes are on the market compared to the 2011 peak.

Current unsold inventory in New Jersey varies widely by county with some having only three months.  No county presently has more than nine months of supply.  The average was at 4.1 months compared to 4.3 months a year ago.

We still have an acute shortage of inventory in both Hunterdon and Somerset county in our more popular price points and locations which is the under $400k market.

Hunterdon and Somerset County have 1% more and 5% less inventory respectively than a year ago.  And, those counties have about 9 and 15% less inventory respectively than two years ago.

The fear of increasing interest rates based on future increases and the Fed’s slightly loosening lending standards are driving the current market activity.

Interest Rates:

Interest rates are holding.

The economy is strengthening, and Interest rates at the end of July fall slightly to around 4.5% for a 30-year conventional mortgage. A fifteen-year conventional mortgage rests at just under the 4% mark. Five-year arms are just under the 3.825% range.

Consumer fears of steadily rising interest rates and slowly rising home prices are driving the current market demand. The Fed already instituted several initial increases in rates and are talking about additional ones. Industry analysts forecast to be nearly 5% by the end of 2018, and 5.5% by the end of 2019. If the rate increases from 4% to 5%, buyers will lose 9% of their buying power and have already lost 6% with rate increases over the past few months.

Combine this with the steadily increasing prices and consumer confidence, and you have what is driving our current market activity

National Job Front:

US unemployment rate has risen a bit to 3.9%, the lowest it has been in eighteen years! This trend is expected to continue as a result of the recent tax and jobs reform.

On the national level, the US added nearly 1,500,000+ jobs in January thru July of 2018 and is trending towards 2.5 million added jobs by year-end (a sixteen percent increase over the prior year)

At the end of June, there were 6.7+ Million openings compared to nearly 6.6 Million unemployed persons, with unemployment being the lowest since December of 2000.

And the GDP is predicted to keep expanding.

Consumer confidence is the highest since 2004.

Great news for the housing industry!

New Jersey Job Front:

The NJ unemployment rate fell slightly to 4.2%, bolstering consumer confidence in NJ as well.

NJ added 3,000 jobs in July, and 33,700+ jobs have been added in NJ year to date 2018 as compared to 21,700 for the same period in 2017, and if it continues, NJ could add over 100,000 jobs by year-end.

The level of jobs created was at a much higher level than in the past several years (a silver lining?).

It also should be noted that these jobs are concentrated in the northern half of the state.

Rental Market Trends:

We still have an extremely tight rental market!

Prior restrictive mortgage standards nudged Millennials to postpone home ownership in life later than previously seen. These potential buyers live with parents or share rentals. We are starting to see them now re-enter the rental and first-time buyer markets. The average age of our first-time buyer changed from the late 20’s to the mid 30’s over the past five years.  Older Americans impacted by underfunded retirement plans due to the economic downturn rent houses too.

Rental prices in New Jersey rose ~ 5% in 2017, averaging nearly $1,500 per unit. Current vacancy rates in New Jersey rose to 3.8% with the in northern and southern NY and Philadelphia at 4+%.

We have seen a 2Q2018 rise in rental prices in Central NJ of 2.8% alone. With the demand being what it is, we see new construction in this sector rise almost 400%.

The drop in New Jersey’s homeownership contributes to rental demand.  A 12+ year trend shows a decrease from  71% to 66%.  This 7% decrease compared to an 8% national decrease contributes to the slower recovery of home prices in the state and adds over 20,000+ additional renters in our state.  Households with no children stand at 65%, reflecting the decline in our school population.

One article states that the average homeowner has a net wealth of over $230K while the same for a renter is only around $5K.  It also offers a stable place to live, an evident hedge against inflation and way to build wealth (a strong argument for home ownership).

However, the number of renters has increased by 7% over the past 25 years with the less educated leading the way.  And, we are now seeing more educated millennials moving east into higher rent and cost of living areas that eat into to their discretionary income (including savings).  Makes one wonder where this all is heading…

New Jersey Foreclosures:

New Jersey continues to face high foreclosure rate filings. Other states have begun to, or already have recovered. In a tight real estate market, these foreclosures sell at a small discount.

Note:  Figures vary by local market, especially those walloped by Hurricane Sandy three years ago and rural and urban areas. We rank #4 in the country at 2.8%, led by FL with 4.3% (mostly hurricane-related) & NY, LA, MS and followed by, ME, DE, and PA.  The national baseline number sits at ~ 1.7%.

2017 foreclosure filings decreased slightly to 70,150+ or -5%, putting pressure on home prices in concentrated areas.  Base on the year to date results for 2018 could fall another 7% to around 65,000 filings.

Tax cuts and Jobs Act effect:

Three specific areas had appeared as concerns:

  1. State and Local Taxes (SALT) are now limited to a $10,000 deduction going forward.
  2. Mortgage and Interest Deductions (MID) are now limited to a maximum principal balance of $750,000.
  3. Home Equity Line of Credit (HELOC) Loan interest deductions is for the most part eliminated

Although it is still too early to tell how these areas will impact total 2018 real estate values in New Jersey, they are sure to have some impact. New Jersey is one of the highest taxed states in the union, and our home values are also some of the highest. How this affects each of us on an individual basis needs to be better understood as there is some trade-off such as higher deductions and overall lower income brackets.

The higher income luxury market is probably most at risk.  But how it affects the overall incentive to own a home is still unfolding.

There were several proposals on the new tax code, and most consumers are not up to date on what passed.  It will take time for this information to be digested.

It also is evident that the out-migration from New Jersey to other more affordable states has continued.

In a nutshell, these changes appear to be having little impact to date, but there will be some very high-end people affected, and that will, in turn, affect that market…

That effect might slow the price growth in higher priced homes NJ and even turn into a deficit in some most affluent areas.

Real Estate Market Recap 

Economic conditions:

  • 2017 was the seventh straight year of 2 million + job gains.
  • Although improving in 2018, the NJ job situation had been declining for the past two years.
  • At 4.2% unemployment, NJ is almost 8% above the national average which is currently 3.9%.
  • The best paying and most attractive jobs are in NYC attracting the millennials in that direction.
  • Interest rates have already risen .5% since the first of the year are forecasted to rise another .25 to .5% by year’s end, taking almost 10% away from buyers buying power.
  • And, house prices are rising 6+ % in the popular housing price points further exasperating the situation.
  • Baby boomers are choosing to “stay put’ and update rather than “move up” to their dream house as it is no longer considered a sound investment (and a lot of times is simply not available) which is causing most of the housing shortage.
  • And there is no entry level construction going on in our area.  Just larger homes and new rentals.
  • As a result of the previous two points, we are experiencing the current housing inventory shortage.
  • Foreclosures are on the decline and to some extent are helping to offset fewer listings.
  • Also, there is confidence that the new tax and jobs act will further stimulate the economy with more jobs as the economy remains robust.
  • The new tax rules appear only to affect our very higher-end buyers.

Changes in lifestyle:

  • Average age at marriage is now in the mid to late 30’s (up 7 years from just a decade ago).
  • Families usually have only one to two children due to costs and ability to choose.
  • 65% of all NJ homes have no children of school age.
  • 50% do not have more than 1 person in them.
  • Demand for larger houses has diminished.
  • As a result of the job situation, buyers are gravitating to areas within 15 miles of NYC with good mass transportation systems.
  • 80% of consumers still perceive homeownership as part of the American Dream.
  • It is just what they want to buy (or rent) that has changed.
  • Builders have been thinking 4 BR center hall colonials on 1+ acre in the country.
  • Buyers are thinking luxury hi-rise close to mass transportation and work.
  • And, for the first time in history, Hunterdon County (which has been declining in population) has reported more deaths than births in 2017.

Market conditions:

  • We are starting to see some warnings of an economic slowdown in late 2020 as the fed raises interest rates to curb inflation, and this needs to be monitored.
  • But, in general, homeowners are sitting with more equity than ever and are no longer using their homes as an ATM.  So, the effect of any slowdown on housing should be minimal (if at all).
  • Consumer confidence remains extremely high nation-wide based on the job and stock market increases.
  • This confidence is reflected in buyer traffic being up at open houses.  However, with lack of inventory, there are fewer houses for sale.
  • Millennials make up 24% of our current homeowners with more room for expansion at the lower end of the market when adequate inventory supply materializes.
  • Central New Jersey’s trend for 2016 and early 2017 showed a surge in home sales but price increases only in houses clustered in < $500,000 market where the first-time buyers and Millennials are focused.
  • The >$600K market holds steady to diminishing slightly, depending on location and price.  Often when a >$600K property goes on the market, it’s competing with a >$700K that needs to sell quickly (etc.). The extreme high-end market has also seen some appreciation in 2018 so far.
  • Minimal new construction, lack of entry-level new housing and COAH restrictions add additional value to the current inventory.
  • Analysts five-year forecast indicates slow and steady price growth at an annual 3 to 4%.  This is higher in the under $400K market.
  • There is an acute shortage of inventory in both Hunterdon and Somerset County. In our more popular price points and locations, this holds back sales.  In general, we have only about 50% of the inventory that we had in 2011.
  • In 2017 prices rose ~ averaging just over 3.5% and depending on price points and locations.  2018 promises to be even stronger (without factoring in any tax impact).
  • Mortgage delinquency is normalizing.

Forecast:

  • The economy will continue to prosper with no recession currently in sight for the next 18 + months.
  • Interest rates will Climb to about 5% by year-end further decreasing buying power.
  • Home prices will rise by an average of another 3% during that same period (this will depend on your price point and location).
  • Supply will remain tight in the more popular price points in the residential real estate.
  • Many new jobs seem to be resulting from the Tax and Jobs act.
  • For the first time in memory, the US is reporting 6+ million open jobs and only 6 million unemployed.
  • We now need to match the skills of the unemployed to the job openings to prosper further.
  • The affordability index shows that there is room for much more sales, we just need the increase in inventory.
  • Some decrease in moderate prices home ownership could result in the raising of the standard deduction.
  • Some high-end fall-out could result in the residential real estate from the SALT and mortgage interest changes in the Tax and Jobs act.
  • The commercial real estate market will flourish as a result.
  • Mid-term elections effect is a total unknown at this point.
  • People in their home > 10 years have very positive home equity built up, and a more significant portion of payments applies to principle.  Increases in selling prices should eventually motivate people to make changes in their lifestyle by investing in summer homes or even start a new business with the extra equity cash.

Note:  Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. I took reasonable precautions for presenting this information. Please consult with a professional sales agent and take no actions based on my opinions, gathered trends, and statistics.  I assume no liability.

 


Presented as a public service by:

Joe Peters Logo
 


Click Here to Real Estate Market Guides

Somerset County, NJ Residential Real Estate Market Conditions | September 2018 – Canal Walk Edition

Somerset County, NJ

Residential Real Estate Market Conditions | September 2018 – Canal Walk Edition

Real Estate Market Conditions

Get ahead of the residential real estate market in Somerset County, NJ with Coldwell Banker Residential Broker sales associate, Joe Peters.

This Market Update will not only show you what is happening in your local market area, but it will also explain why it is happening and what is contributing to these results.

“What” it is happening

Based on the last full month’s contract sales, statistics show a supply of approximately four months. Normal market conditions average four to six months in Somerset County.  Units going under contract averaged 57 days on the market. 364 properties went “under contract” in August, down from 423 in the prior month. Newly listed properties in the same period totaled 426.

Somerset County Inventory Breakdown By Price For Last Month:

New Listings Under Contract Active Listings Month’s Supply
Condos/Town Houses * 145 119 382 3
Over 55 Communities* 8 11 23 2
$000K to $199K 35 39 84 2
$200K to $299K 99 80 245 3
$300K to $399K 81 65 223 3
$400K to $499K 53 54 153 3
$500K to $599K 49 42 141 3
$600K to $699K 28 25 111 4
$700K to $799K 19 24 106 4
$800K to $899K 14 12 85 7
$900K to $999K 14 8 89 11
$1,000K and Up 34 15 253 17
Totals for August 426 364 1490 4
Average Price $519,030 $468,431 -9.7%
Average Days on Market 57
* Included in $ breakdowns

Somerset County Sales Breakdown Overview:

  • 65 % of sales in houses < $500,000
  • 30 %of sales in houses > $500,000 and < $1,000,000
  • 04 % percent of total sales (or 15 in total) in houses >$1,000,000

Somerset County Inventory Breakdown By Municipality For Last Month:

Active Listings Under Contract Month’s Supply
Bedminster Twp 69 14 5
Bernards Twp 174 41 4
Bernardsville 84 9 9
Bound Brook 24 12 2
Branchburg Twp 68 14 5
Bridgewater Twp 163 43 4
Far Hills Boro 16 2 0
Franklin Twp 212 85 2
Green Brook 42 7 6
Hillsborough 147 36 4
Manville Boro 35 9 4
Millstone Boro 3 2 2
Montgomery Twp 128 22 6
North Plainfield 56 25 2
Peapack Gladstone 16 4 4
Raritan Boro 13 5 3
Rocky Hill Boro 6 0
Somerville Boro 27 12 2
South Bound Brook 19 3 6
Warren Twp 138 15 9
Watchung Boro 50 4 13
Totals 1490 364 4

Somerset County Sales Breakdown Detailed:

One area in Somerset County reported no sales in the past month

  • Rocky Hill

Two area reported one or two sales each last month

  • Far Hills
  • Millstone

Hotspots:

  • Bernards – 41 sales
  • Bridgewater – 43 sales
  • Franklin – 85 sales
  • Hillsborough – 36 sales
  • Montgomery – 22 sales

These hotspot areas equaled 62% of the sales last month. The average new listing coming on the market last month neared $519,030 The average price of a unit going “under contract” neared $468,431 (10% less).

Note: To get an accurate price point for your property, contact me. Coldwell Banker’s big data technology capabilities will put you at an advantage. Plus, we can now tell you where people are moving into your area from and market to that area directly. Houses priced and marketed accurately sell fast, especially with a real estate industry veteran and local expert helping you navigate the process.

Canal Walk Statistics:

  • Canal Walk offers one floor units, town houses and various models of single family units
  • There are 3 homes currently for sale in Canal Walk as of this writing with an average list price of $482,667.
  • Of the 3, none are an Enclave single floor units and one is a townhouse.
  • There were 2 new listings this month with an average list price of $544,000.
  • Five units have gone under contract in the past 30 days with an average list price of $461,880 with the average days on the market of 24.
  • Giving us a little under one month of inventory
  • Close to 50 units changed hands over the past 12 months ranging from the low $300’s in to the low $600’s
  • The actual price per unit varies by type, model, location and upgrades
  • Call for more details…

The initial section of this Market Report reported on “What” is happening.

This section will focus on “Why” it is happening

 

New Jersey’s Economic Drivers:

New Jersey Home Sales:

For the first time in three years, we have seen an improvement in the inventory situation (but is still below what is needed).  Let’s hope that it is the beginning of a trend.

An increase of 1% in home sales in NJ in Year to Date. This is being held back somewhat by a lack of inventory.

Activity concentrates in the under $400,000 market where Millennial buyers transition into home ownership. During the same period, all housing sales showed increases across all other price points showing confidence in the changes made on taxes and deregulation. There has also been an improvement at the very high end in towns where rail service to Manhattan is available.

At the same time, the number of homes offered for sale in New Jersey remained low (but has been improving). The supply decreased by ~ nearly 1,000 homes, compared to a year ago.  Currently, ~30,000 fewer homes are on the market compared to the 2011 peak.

Current unsold inventory in New Jersey varies widely by county with some having only three months.  No county presently has more than nine months of supply.  The average was at 4.1 months compared to 4.3 months a year ago.

We still have an acute shortage of inventory in both Hunterdon and Somerset county in our more popular price points and locations which is the under $400k market.

Hunterdon and Somerset County have 1% more and 5% less inventory respectively than a year ago.  And, those counties have about 9 and 15% less inventory respectively than two years ago.

The fear of increasing interest rates based on future increases and the Fed’s slightly loosening lending standards are driving the current market activity.

Interest Rates:

Interest rates are holding.

The economy is strengthening, and Interest rates at the end of July fall slightly to around 4.5% for a 30-year conventional mortgage. A fifteen-year conventional mortgage rests at just under the 4% mark. Five-year arms are just under the 3.825% range.

Consumer fears of steadily rising interest rates and slowly rising home prices are driving the current market demand. The Fed already instituted several initial increases in rates and are talking about additional ones. Industry analysts forecast to be nearly 5% by the end of 2018, and 5.5% by the end of 2019. If the rate increases from 4% to 5%, buyers will lose 9% of their buying power and have already lost 6% with rate increases over the past few months.

Combine this with the steadily increasing prices and consumer confidence, and you have what is driving our current market activity

National Job Front:

US unemployment rate has risen a bit to 3.9%, the lowest it has been in eighteen years! This trend is expected to continue as a result of the recent tax and jobs reform.

On the national level, the US added nearly 1,500,000+ jobs in January thru July of 2018 and is trending towards 2.5 million added jobs by year-end (a sixteen percent increase over the prior year)

At the end of June, there were 6.7+ Million openings compared to nearly 6.6 Million unemployed persons, with unemployment being the lowest since December of 2000.

And the GDP is predicted to keep expanding.

Consumer confidence is the highest since 2004.

Great news for the housing industry!

New Jersey Job Front:

The NJ unemployment rate fell slightly to 4.2%, bolstering consumer confidence in NJ as well.

NJ added 3,000 jobs in July, and 33,700+ jobs have been added in NJ year to date 2018 as compared to 21,700 for the same period in 2017, and if it continues, NJ could add over 100,000 jobs by year-end.

The level of jobs created was at a much higher level than in the past several years (a silver lining?).

It also should be noted that these jobs are concentrated in the northern half of the state.

Rental Market Trends:

We still have an extremely tight rental market!

Prior restrictive mortgage standards nudged Millennials to postpone home ownership in life later than previously seen. These potential buyers live with parents or share rentals. We are starting to see them now re-enter the rental and first-time buyer markets. The average age of our first-time buyer changed from the late 20’s to the mid 30’s over the past five years.  Older Americans impacted by underfunded retirement plans due to the economic downturn rent houses too.

Rental prices in New Jersey rose ~ 5% in 2017, averaging nearly $1,500 per unit. Current vacancy rates in New Jersey rose to 3.8% with the in northern and southern NY and Philadelphia at 4+%.

We have seen a 2Q2018 rise in rental prices in Central NJ of 2.8% alone. With the demand being what it is, we see new construction in this sector rise almost 400%.

The drop in New Jersey’s homeownership contributes to rental demand.  A 12+ year trend shows a decrease from  71% to 66%.  This 7% decrease compared to an 8% national decrease contributes to the slower recovery of home prices in the state and adds over 20,000+ additional renters in our state.  Households with no children stand at 65%, reflecting the decline in our school population.

One article states that the average homeowner has a net wealth of over $230K while the same for a renter is only around $5K.  It also offers a stable place to live, an evident hedge against inflation and way to build wealth (a strong argument for home ownership).

However, the number of renters has increased by 7% over the past 25 years with the less educated leading the way.  And, we are now seeing more educated millennials moving east into higher rent and cost of living areas that eat into to their discretionary income (including savings).  Makes one wonder where this all is heading…

New Jersey Foreclosures:

New Jersey continues to face high foreclosure rate filings. Other states have begun to, or already have recovered. In a tight real estate market, these foreclosures sell at a small discount.

Note:  Figures vary by local market, especially those walloped by Hurricane Sandy three years ago and rural and urban areas. We rank #4 in the country at 2.8%, led by FL with 4.3% (mostly hurricane-related) & NY, LA, MS and followed by, ME, DE, and PA.  The national baseline number sits at ~ 1.7%.

2017 foreclosure filings decreased slightly to 70,150+ or -5%, putting pressure on home prices in concentrated areas.  Base on the year to date results for 2018 could fall another 7% to around 65,000 filings.

Tax cuts and Jobs Act effect:

Three specific areas had appeared as concerns:

  1. State and Local Taxes (SALT) are now limited to a $10,000 deduction going forward.
  2. Mortgage and Interest Deductions (MID) are now limited to a maximum principal balance of $750,000.
  3. Home Equity Line of Credit (HELOC) Loan interest deductions is for the most part eliminated

Although it is still too early to tell how these areas will impact total 2018 real estate values in New Jersey, they are sure to have some impact. New Jersey is one of the highest taxed states in the union, and our home values are also some of the highest. How this affects each of us on an individual basis needs to be better understood as there is some trade-off such as higher deductions and overall lower income brackets.

The higher income luxury market is probably most at risk.  But how it affects the overall incentive to own a home is still unfolding.

There were several proposals on the new tax code, and most consumers are not up to date on what passed.  It will take time for this information to be digested.

It also is evident that the out-migration from New Jersey to other more affordable states has continued.

In a nutshell, these changes appear to be having little impact to date, but there will be some very high-end people affected, and that will, in turn, affect that market…

That effect might slow the price growth in higher priced homes NJ and even turn into a deficit in some most affluent areas.

Real Estate Market Recap 

Economic conditions:

  • 2017 was the seventh straight year of 2 million + job gains.
  • Although improving in 2018, the NJ job situation had been declining for the past two years.
  • At 4.2% unemployment, NJ is almost 8% above the national average which is currently 3.9%.
  • The best paying and most attractive jobs are in NYC attracting the millennials in that direction.
  • Interest rates have already risen .5% since the first of the year are forecasted to rise another .25 to .5% by year’s end, taking almost 10% away from buyers buying power.
  • And, house prices are rising 6+ % in the popular housing price points further exasperating the situation.
  • Baby boomers are choosing to “stay put’ and update rather than “move up” to their dream house as it is no longer considered a sound investment (and a lot of times is simply not available) which is causing most of the housing shortage.
  • And there is no entry level construction going on in our area.  Just larger homes and new rentals.
  • As a result of the previous two points, we are experiencing the current housing inventory shortage.
  • Foreclosures are on the decline and to some extent are helping to offset fewer listings.
  • Also, there is confidence that the new tax and jobs act will further stimulate the economy with more jobs as the economy remains robust.
  • The new tax rules appear only to affect our very higher-end buyers.

Changes in lifestyle:

  • Average age at marriage is now in the mid to late 30’s (up 7 years from just a decade ago).
  • Families usually have only one to two children due to costs and ability to choose.
  • 65% of all NJ homes have no children of school age.
  • 50% do not have more than 1 person in them.
  • Demand for larger houses has diminished.
  • As a result of the job situation, buyers are gravitating to areas within 15 miles of NYC with good mass transportation systems.
  • 80% of consumers still perceive homeownership as part of the American Dream.
  • It is just what they want to buy (or rent) that has changed.
  • Builders have been thinking 4 BR center hall colonials on 1+ acre in the country.
  • Buyers are thinking luxury hi-rise close to mass transportation and work.
  • And, for the first time in history, Hunterdon County (which has been declining in population) has reported more deaths than births in 2017.

Market conditions:

  • We are starting to see some warnings of an economic slowdown in late 2020 as the fed raises interest rates to curb inflation, and this needs to be monitored.
  • But, in general, homeowners are sitting with more equity than ever and are no longer using their homes as an ATM.  So, the effect of any slowdown on housing should be minimal (if at all).
  • Consumer confidence remains extremely high nation-wide based on the job and stock market increases.
  • This confidence is reflected in buyer traffic being up at open houses.  However, with lack of inventory, there are fewer houses for sale.
  • Millennials make up 24% of our current homeowners with more room for expansion at the lower end of the market when adequate inventory supply materializes.
  • Central New Jersey’s trend for 2016 and early 2017 showed a surge in home sales but price increases only in houses clustered in < $500,000 market where the first-time buyers and Millennials are focused.
  • The >$600K market holds steady to diminishing slightly, depending on location and price.  Often when a >$600K property goes on the market, it’s competing with a >$700K that needs to sell quickly (etc.). The extreme high-end market has also seen some appreciation in 2018 so far.
  • Minimal new construction, lack of entry-level new housing and COAH restrictions add additional value to the current inventory.
  • Analysts five-year forecast indicates slow and steady price growth at an annual 3 to 4%.  This is higher in the under $400K market.
  • There is an acute shortage of inventory in both Hunterdon and Somerset County. In our more popular price points and locations, this holds back sales.  In general, we have only about 50% of the inventory that we had in 2011.
  • In 2017 prices rose ~ averaging just over 3.5% and depending on price points and locations.  2018 promises to be even stronger (without factoring in any tax impact).
  • Mortgage delinquency is normalizing.

Forecast:

  • The economy will continue to prosper with no recession currently in sight for the next 18 + months.
  • Interest rates will Climb to about 5% by year-end further decreasing buying power.
  • Home prices will rise by an average of another 3% during that same period (this will depend on your price point and location).
  • Supply will remain tight in the more popular price points in the residential real estate.
  • Many new jobs seem to be resulting from the Tax and Jobs act.
  • For the first time in memory, the US is reporting 6+ million open jobs and only 6 million unemployed.
  • We now need to match the skills of the unemployed to the job openings to prosper further.
  • The affordability index shows that there is room for much more sales, we just need the increase in inventory.
  • Some decrease in moderate prices home ownership could result in the raising of the standard deduction.
  • Some high-end fall-out could result in the residential real estate from the SALT and mortgage interest changes in the Tax and Jobs act.
  • The commercial real estate market will flourish as a result.
  • Mid-term elections effect is a total unknown at this point.
  • People in their home > 10 years have very positive home equity built up, and a more significant portion of payments applies to principle.  Increases in selling prices should eventually motivate people to make changes in their lifestyle by investing in summer homes or even start a new business with the extra equity cash.

Note:  Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. I took reasonable precautions for presenting this information. Please consult with a professional sales agent and take no actions based on my opinions, gathered trends, and statistics.  I assume no liability.

 


Presented as a public service by:

Joe Peters Logo
 


Click Here to Real Estate Market Guides

Hunterdon County NJ Real Estate Market

Hunterdon County’s Real Estate Market Conditions | September 2018

Hunterdon County, NJ

 Real Estate Market Conditions | September 2018

Hunterdon County's Real Estate Market Conditions

Get ahead of the Hunterdon County NJ real estate market with Coldwell Banker Residential Broker sales associate, Joe Peters.

This Market Update will not only show you what is happening in your local market area, but it will also explain why it is happening and what is contributing to these results.

“What” is happening

 

Hunterdon County New Jersey Real Estate Market Conditions (including):

  1. Clinton Township
  2. Flemington
  3. Raritan Township
  4. Readington Township
  5. Clinton

Based on the last full month’s contract sales, statistics show a supply of approximately five months. Normal market conditions average four to six months in Hunterdon County.  Units going under contract averaged 65 days on the market. 173 properties went “under contract” in August, up from 156 in the prior month. Newly listed properties in the same period totaled 212.

Hunterdon County Inventory Breakdown By Price For Last Month:

New Listings Under Contract Active Listings
Condos/Town Houses * 45 44 120
Over 55 Communities * 4 2 20
$000K to $199K 23 31 100
$200K to $299K 26 31 106
$300K to $399K 48 35 152
$400K to $499K 34 25 134
$500K to $599K 30 26 152
$600K to $699K 24 15 115
$700K to $799K 8 5 50
$800K to $899K 7 1 36
$900K to $999K 6 1 26
$1,000K and Up 6 3 63
Totals for August 212 173 934
Average Price $477,250 $402,470 -15.7%
Average DOM 65
* Included in $ breakdowns

Hunterdon County Sales Breakdown Overview:

  • 71% of sales in houses < $500,000
  • 29 % of sales in houses > $500,000
  • 06 % percent of total sales (or 10 in total) in houses >$700,000

Hunterdon County Inventory Breakdown By Municipality For Last Month:

Active Listings Under Contract Month’s Supply
Alexandria Twp. 52 9 6
Bethlehem Twp. 32 7 5
Bloomsbury Boro. 11 4 3
Califon Boro. 6 0
Clinton Town 14 5 3
Clinton Twp. 94 21 4
Delaware Twp. 37 2 19
East Amwell Twp. 31 3 10
Flemington Boro. 14 3 5
Franklin Twp. 24 1 24
Frenchtown Boro. 9 0
Glen Gardner Boro. 13 4 3
Hampton Boro 13 0
High Bridge Boro. 18 5 4
Holland twp. 30 7 4
Kingwood Twp. 33 3 11
Lambertville City 27 7 4
Lebanon Boro. 4 1 4
Lebanon Twp. 45 9 5
Milford Boro. 14 1 14
RaritanTwp. 149 35 4
Readington Twp. 97 25 4
Stockton Boro. 3 1
Tewksbury Twp. 99 6 17
Union Twp. 48 10 5
West Amwell Twp. 17 4 4
Totals 934 173 5

Three areas in Hunterdon County reported no sales reported in the past month:

  • Califon
  • Frenchtown
  • Hampton

Four areas reported one or 2 sales each last month:

  • Delaware
  • Lebanon Boro.
  • Milford
  • Stockton

Hotspots:

  • Clinton/Clinton Township – 26 sales
  • Raritan Township – 35 sales
  • Readington Township – 25 sales

Hotspot areas equaled 55% of the sales last month. The average new listing coming on the market last month neared $477,250. The average price of a unit going “under contract” neared $402,470 (16% less).

Note: To get an accurate price point for your property, contact me. Coldwell Banker’s big data technology capabilities will put you at an advantage. Plus, we can now tell you where people are moving into your area from and market to that area directly.  Houses priced and marketed accurately sell fast, especially with a real estate industry veteran and local expert helping you navigate the process.

 

The initial section of this Market Report reported on “What” is happening.

This section will focus on “Why” it is happening

 

New Jersey’s Economic Drivers:

New Jersey Home Sales:

For the first time in three years, we have seen an improvement in the inventory situation (but is still below what is needed).  Let’s hope that it is the beginning of a trend.

An increase of 1% in home sales in NJ in Year to Date. This is being held back somewhat by a lack of inventory.

Activity concentrates in the under $400,000 market where Millennial buyers transition into home ownership. During the same period, all housing sales showed increases across all other price points showing confidence in the changes made on taxes and deregulation. There has also been an improvement at the very high end in towns where rail service to Manhattan is available.

At the same time, the number of homes offered for sale in New Jersey remained low (but has been improving). The supply decreased by ~ nearly 1,000 homes, compared to a year ago.  Currently, ~30,000 fewer homes are on the market compared to the 2011 peak.

Current unsold inventory in New Jersey varies widely by county with some having only three months.  No county presently has more than nine months of supply.  The average was at 4.1 months compared to 4.3 months a year ago.

We still have an acute shortage of inventory in both Hunterdon and Somerset county in our more popular price points and locations which is the under $400k market.

Hunterdon and Somerset County have 1% more and 5% less inventory respectively than a year ago.  And, those counties have about 9 and 15% less inventory respectively than two years ago.

The fear of increasing interest rates based on future increases and the Fed’s slightly loosening lending standards are driving the current market activity.

 

Interest Rates:

Interest rates are holding.

The economy is strengthening, and Interest rates at the end of July fall slightly to around 4.5% for a 30-year conventional mortgage. A fifteen-year conventional mortgage rests at just under the 4% mark. Five-year arms are just under the 3.825% range.

Consumer fears of steadily rising interest rates and slowly rising home prices are driving the current market demand. The Fed already instituted several initial increases in rates and are talking about additional ones. Industry analysts forecast to be nearly 5% by the end of 2018, and 5.5% by the end of 2019. If the rate increases from 4% to 5%, buyers will lose 9% of their buying power and have already lost 6% with rate increases over the past few months.

Combine this with the steadily increasing prices and consumer confidence, and you have what is driving our current market activity

 

National Job Front:

US unemployment rate has risen a bit to 3.9%, the lowest it has been in eighteen years! This trend is expected to continue as a result of the recent tax and jobs reform.

On the national level, the US added nearly 1,500,000+ jobs in January thru July of 2018 and is trending towards 2.5 million added jobs by year-end (a sixteen percent increase over the prior year)

At the end of June, there were 6.7+ Million openings compared to nearly 6.6 Million unemployed persons, with unemployment being the lowest since December of 2000.

And the GDP is predicted to keep expanding.

Consumer confidence is the highest since 2004.

Great news for the housing industry!

 

New Jersey Job Front:

The NJ unemployment rate fell slightly to 4.2%, bolstering consumer confidence in NJ as well.

NJ added 3,000 jobs in July, and 33,700+ jobs have been added in NJ year to date 2018 as compared to 21,700 for the same period in 2017, and if it continues, NJ could add over 100,000 jobs by year-end.

The level of jobs created was at a much higher level than in the past several years (a silver lining?).

It also should be noted that these jobs are concentrated in the northern half of the state.

 

Rental Market Trends:

We still have an extremely tight rental market!

Prior restrictive mortgage standards nudged Millennials to postpone home ownership in life later than previously seen. These potential buyers live with parents or share rentals. We are starting to see them now re-enter the rental and first-time buyer markets. The average age of our first-time buyer changed from the late 20’s to the mid 30’s over the past five years.  Older Americans impacted by underfunded retirement plans due to the economic downturn rent houses too.

Rental prices in New Jersey rose ~ 5% in 2017, averaging nearly $1,500 per unit. Current vacancy rates in New Jersey rose to 3.8% with the in northern and southern NY and Philadelphia at 4+%.

We have seen a 2Q2018 rise in rental prices in Central NJ of 2.8% alone. With the demand being what it is, we see new construction in this sector rise almost 400%.

The drop in New Jersey’s homeownership contributes to rental demand.  A 12+ year trend shows a decrease from  71% to 66%.  This 7% decrease compared to an 8% national decrease contributes to the slower recovery of home prices in the state and adds over 20,000+ additional renters in our state.  Households with no children stand at 65%, reflecting the decline in our school population.

One article states that the average homeowner has a net wealth of over $230K while the same for a renter is only around $5K.  It also offers a stable place to live, an evident hedge against inflation and way to build wealth (a strong argument for home ownership).

However, the number of renters has increased by 7% over the past 25 years with the less educated leading the way.  And, we are now seeing more educated millennials moving east into higher rent and cost of living areas that eat into to their discretionary income (including savings).  Makes one wonder where this all is heading…

 

New Jersey Foreclosures:

New Jersey continues to face high foreclosure rate filings. Other states have begun to, or already have recovered. In a tight real estate market, these foreclosures sell at a small discount.

Note:  Figures vary by local market, especially those walloped by Hurricane Sandy three years ago and rural and urban areas. We rank #4 in the country at 2.8%, led by FL with 4.3% (mostly hurricane-related) & NY, LA, MS and followed by, ME, DE, and PA.  The national baseline number sits at ~ 1.7%.

2017 foreclosure filings decreased slightly to 70,150+ or -5%, putting pressure on home prices in concentrated areas.  Base on the year to date results for 2018 could fall another 7% to around 65,000 filings.

Tax cuts and Jobs Act effect:

Three specific areas had appeared as concerns:

  1. State and Local Taxes (SALT) are now limited to a $10,000 deduction going forward.
  2. Mortgage and Interest Deductions (MID) are now limited to a maximum principal balance of $750,000.
  3. Home Equity Line of Credit (HELOC) Loan interest deductions is for the most part eliminated

Although it is still too early to tell how these areas will impact total 2018 real estate values in New Jersey, they are sure to have some impact. New Jersey is one of the highest taxed states in the union, and our home values are also some of the highest. How this affects each of us on an individual basis needs to be better understood as there is some trade-off such as higher deductions and overall lower income brackets.

The higher income luxury market is probably most at risk.  But how it affects the overall incentive to own a home is still unfolding.

There were several proposals on the new tax code, and most consumers are not up to date on what passed.  It will take time for this information to be digested.

It also is evident that the out-migration from New Jersey to other more affordable states has continued.

In a nutshell, these changes appear to be having little impact to date, but there will be some very high-end people affected, and that will, in turn, affect that market…

That effect might slow the price growth in higher priced homes NJ and even turn into a deficit in some most affluent areas.

 

Real Estate Market Recap 

 

Economic conditions:

  • 2017 was the seventh straight year of 2 million + job gains.
  • Although improving in 2018, the NJ job situation had been declining for the past two years.
  • At 4.2% unemployment, NJ is almost 8% above the national average which is currently 3.9%.
  • The best paying and most attractive jobs are in NYC attracting the millennials in that direction.
  • Interest rates have already risen .5% since the first of the year are forecasted to rise another .25 to .5% by year’s end, taking almost 10% away from buyers buying power.
  • And, house prices are rising 6+ % in the popular housing price points further exasperating the situation.
  • Baby boomers are choosing to “stay put’ and update rather than “move up” to their dream house as it is no longer considered a sound investment (and a lot of times is simply not available) which is causing most of the housing shortage.
  • And there is no entry level construction going on in our area.  Just larger homes and new rentals.
  • As a result of the previous two points, we are experiencing the current housing inventory shortage.
  • Foreclosures are on the decline and to some extent are helping to offset fewer listings.
  • Also, there is confidence that the new tax and jobs act will further stimulate the economy with more jobs as the economy remains robust.
  • The new tax rules appear only to affect our very higher-end buyers.

Changes in lifestyle:

  • Average age at marriage is now in the mid to late 30’s (up 7 years from just a decade ago).
  • Families usually have only one to two children due to costs and ability to choose.
  • 65% of all NJ homes have no children of school age.
  • 50% do not have more than 1 person in them.
  • Demand for larger houses has diminished.
  • As a result of the job situation, buyers are gravitating to areas within 15 miles of NYC with good mass transportation systems.
  • 80% of consumers still perceive homeownership as part of the American Dream.
  • It is just what they want to buy (or rent) that has changed.
  • Builders have been thinking 4 BR center hall colonials on 1+ acre in the country.
  • Buyers are thinking luxury hi-rise close to mass transportation and work.
  • And, for the first time in history, Hunterdon County (which has been declining in population) has reported more deaths than births in 2017.

Market conditions:

  • We are starting to see some warnings of an economic slowdown in late 2020 as the fed raises interest rates to curb inflation, and this needs to be monitored.
  • But, in general, homeowners are sitting with more equity than ever and are no longer using their homes as an ATM.  So, the effect of any slowdown on housing should be minimal (if at all).
  • Consumer confidence remains extremely high nation-wide based on the job and stock market increases.
  • This confidence is reflected in buyer traffic being up at open houses.  However, with lack of inventory, there are fewer houses for sale.
  • Millennials make up 24% of our current homeowners with more room for expansion at the lower end of the market when adequate inventory supply materializes.
  • Central New Jersey’s trend for 2016 and early 2017 showed a surge in home sales but price increases only in houses clustered in < $500,000 market where the first-time buyers and Millennials are focused.
  • The >$600K market holds steady to diminishing slightly, depending on location and price.  Often when a >$600K property goes on the market, it’s competing with a >$700K that needs to sell quickly (etc.). The extreme high-end market has also seen some appreciation in 2018 so far.
  • Minimal new construction, lack of entry-level new housing and COAH restrictions add additional value to the current inventory.
  • Analysts five-year forecast indicates slow and steady price growth at an annual 3 to 4%.  This is higher in the under $400K market.
  • There is an acute shortage of inventory in both Hunterdon and Somerset County. In our more popular price points and locations, this holds back sales.  In general, we have only about 50% of the inventory that we had in 2011.
  • In 2017 prices rose ~ averaging just over 3.5% and depending on price points and locations.  2018 promises to be even stronger (without factoring in any tax impact).
  • Mortgage delinquency is normalizing.

Forecast:

  • The economy will continue to prosper with no recession currently in sight for the next 18 + months.
  • Interest rates will Climb to about 5% by year-end further decreasing buying power.
  • Home prices will rise by an average of another 3% during that same period (this will depend on your price point and location).
  • Supply will remain tight in the more popular price points in the residential real estate.
  • Many new jobs seem to be resulting from the Tax and Jobs act.
  • For the first time in memory, the US is reporting 6+ million open jobs and only 6 million unemployed.
  • We now need to match the skills of the unemployed to the job openings to prosper further.
  • The affordability index shows that there is room for much more sales, we just need the increase in inventory.
  • Some decrease in moderate prices home ownership could result in the raising of the standard deduction.
  • Some high-end fall-out could result in the residential real estate from the SALT and mortgage interest changes in the Tax and Jobs act.
  • The commercial real estate market will flourish as a result.
  • Mid-term elections effect is a total unknown at this point.
  • People in their home > 10 years have very positive home equity built up, and a more significant portion of payments applies to principle.  Increases in selling prices should eventually motivate people to make changes in their lifestyle by investing in summer homes or even start a new business with the extra equity cash.

 

Note:  Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. I took reasonable precautions for presenting this information. Please consult with a professional sales agent and take no actions based on my opinions, gathered trends, and statistics.  I assume no liability.

 

 


Presented as a public service by:

Joe Peters Logo
 


Click Here to Real Estate Market Guides

Residential Real Estate Market

Somerset County’s Real Estate Market Conditions | September 2018

Somerset County, NJ

Residential Real Estate Market Conditions | September 2018

Real Estate Market Conditions

Get ahead of the residential real estate market in Somerset County, NJ with Coldwell Banker Residential Broker sales associate, Joe Peters.

This Market Update will not only show you what is happening in your local market area, but it will also explain why it is happening and what is contributing to these results.

“What” it is happening

Based on the last full month’s contract sales, statistics show a supply of approximately four months. Normal market conditions average four to six months in Somerset County.  Units going under contract averaged 57 days on the market. 364 properties went “under contract” in August, down from 423 in the prior month. Newly listed properties in the same period totaled 426.

Somerset County Inventory Breakdown By Price For Last Month:

New Listings Under Contract Active Listings Month’s Supply
Condos/Town Houses * 145 119 382 3
Over 55 Communities* 8 11 23 2
$000K to $199K 35 39 84 2
$200K to $299K 99 80 245 3
$300K to $399K 81 65 223 3
$400K to $499K 53 54 153 3
$500K to $599K 49 42 141 3
$600K to $699K 28 25 111 4
$700K to $799K 19 24 106 4
$800K to $899K 14 12 85 7
$900K to $999K 14 8 89 11
$1,000K and Up 34 15 253 17
Totals for August 426 364 1490 4
Average Price $519,030 $468,431 -9.7%
Average Days on Market 57
* Included in $ breakdowns

Somerset County Sales Breakdown Overview:

  • 65 % of sales in houses < $500,000
  • 30 %of sales in houses > $500,000 and < $1,000,000
  • 04 % percent of total sales (or 15 in total) in houses >$1,000,000

Somerset County Inventory Breakdown By Municipality For Last Month:

Active Listings Under Contract Month’s Supply
Bedminster Twp 69 14 5
Bernards Twp 174 41 4
Bernardsville 84 9 9
Bound Brook 24 12 2
Branchburg Twp 68 14 5
Bridgewater Twp 163 43 4
Far Hills Boro 16 2 0
Franklin Twp 212 85 2
Green Brook 42 7 6
Hillsborough 147 36 4
Manville Boro 35 9 4
Millstone Boro 3 2 2
Montgomery Twp 128 22 6
North Plainfield 56 25 2
Peapack Gladstone 16 4 4
Raritan Boro 13 5 3
Rocky Hill Boro 6 0
Somerville Boro 27 12 2
South Bound Brook 19 3 6
Warren Twp 138 15 9
Watchung Boro 50 4 13
Totals 1490 364 4

Somerset County Sales Breakdown Detailed:

One area in Somerset County reported no sales in the past month

  • Rocky Hill

Two area reported one or two sales each last month

  • Far Hills
  • Millstone

Hotspots:

  • Bernards – 41 sales
  • Bridgewater – 43 sales
  • Franklin – 85 sales
  • Hillsborough – 36 sales
  • Montgomery – 22 sales

These hotspot areas equaled 62% of the sales last month. The average new listing coming on the market last month neared $519,030 The average price of a unit going “under contract” neared $468,431 (10% less).

Note: To get an accurate price point for your property, contact me. Coldwell Banker’s big data technology capabilities will put you at an advantage. Plus, we can now tell you where people are moving into your area from and market to that area directly. Houses priced and marketed accurately sell fast, especially with a real estate industry veteran and local expert helping you navigate the process.

The initial section of this Market Report reported on “What” is happening.

This section will focus on “Why” it is happening

 

New Jersey’s Economic Drivers:

New Jersey Home Sales:

For the first time in three years, we have seen an improvement in the inventory situation (but is still below what is needed).  Let’s hope that it is the beginning of a trend.

An increase of 1% in home sales in NJ in Year to Date. This is being held back somewhat by a lack of inventory.

Activity concentrates in the under $400,000 market where Millennial buyers transition into home ownership. During the same period, all housing sales showed increases across all other price points showing confidence in the changes made on taxes and deregulation. There has also been an improvement at the very high end in towns where rail service to Manhattan is available.

At the same time, the number of homes offered for sale in New Jersey remained low (but has been improving). The supply decreased by ~ nearly 1,000 homes, compared to a year ago.  Currently, ~30,000 fewer homes are on the market compared to the 2011 peak.

Current unsold inventory in New Jersey varies widely by county with some having only three months.  No county presently has more than nine months of supply.  The average was at 4.1 months compared to 4.3 months a year ago.

We still have an acute shortage of inventory in both Hunterdon and Somerset county in our more popular price points and locations which is the under $400k market.

Hunterdon and Somerset County have 1% more and 5% less inventory respectively than a year ago.  And, those counties have about 9 and 15% less inventory respectively than two years ago.

The fear of increasing interest rates based on future increases and the Fed’s slightly loosening lending standards are driving the current market activity.

Interest Rates:

Interest rates are holding.

The economy is strengthening, and Interest rates at the end of July fall slightly to around 4.5% for a 30-year conventional mortgage. A fifteen-year conventional mortgage rests at just under the 4% mark. Five-year arms are just under the 3.825% range.

Consumer fears of steadily rising interest rates and slowly rising home prices are driving the current market demand. The Fed already instituted several initial increases in rates and are talking about additional ones. Industry analysts forecast to be nearly 5% by the end of 2018, and 5.5% by the end of 2019. If the rate increases from 4% to 5%, buyers will lose 9% of their buying power and have already lost 6% with rate increases over the past few months.

Combine this with the steadily increasing prices and consumer confidence, and you have what is driving our current market activity

National Job Front:

US unemployment rate has risen a bit to 3.9%, the lowest it has been in eighteen years! This trend is expected to continue as a result of the recent tax and jobs reform.

On the national level, the US added nearly 1,500,000+ jobs in January thru July of 2018 and is trending towards 2.5 million added jobs by year-end (a sixteen percent increase over the prior year)

At the end of June, there were 6.7+ Million openings compared to nearly 6.6 Million unemployed persons, with unemployment being the lowest since December of 2000.

And the GDP is predicted to keep expanding.

Consumer confidence is the highest since 2004.

Great news for the housing industry!

New Jersey Job Front:

The NJ unemployment rate fell slightly to 4.2%, bolstering consumer confidence in NJ as well.

NJ added 3,000 jobs in July, and 33,700+ jobs have been added in NJ year to date 2018 as compared to 21,700 for the same period in 2017, and if it continues, NJ could add over 100,000 jobs by year-end.

The level of jobs created was at a much higher level than in the past several years (a silver lining?).

It also should be noted that these jobs are concentrated in the northern half of the state.

Rental Market Trends:

We still have an extremely tight rental market!

Prior restrictive mortgage standards nudged Millennials to postpone home ownership in life later than previously seen. These potential buyers live with parents or share rentals. We are starting to see them now re-enter the rental and first-time buyer markets. The average age of our first-time buyer changed from the late 20’s to the mid 30’s over the past five years.  Older Americans impacted by underfunded retirement plans due to the economic downturn rent houses too.

Rental prices in New Jersey rose ~ 5% in 2017, averaging nearly $1,500 per unit. Current vacancy rates in New Jersey rose to 3.8% with the in northern and southern NY and Philadelphia at 4+%.

We have seen a 2Q2018 rise in rental prices in Central NJ of 2.8% alone. With the demand being what it is, we see new construction in this sector rise almost 400%.

The drop in New Jersey’s homeownership contributes to rental demand.  A 12+ year trend shows a decrease from  71% to 66%.  This 7% decrease compared to an 8% national decrease contributes to the slower recovery of home prices in the state and adds over 20,000+ additional renters in our state.  Households with no children stand at 65%, reflecting the decline in our school population.

One article states that the average homeowner has a net wealth of over $230K while the same for a renter is only around $5K.  It also offers a stable place to live, an evident hedge against inflation and way to build wealth (a strong argument for home ownership).

However, the number of renters has increased by 7% over the past 25 years with the less educated leading the way.  And, we are now seeing more educated millennials moving east into higher rent and cost of living areas that eat into to their discretionary income (including savings).  Makes one wonder where this all is heading…

New Jersey Foreclosures:

New Jersey continues to face high foreclosure rate filings. Other states have begun to, or already have recovered. In a tight real estate market, these foreclosures sell at a small discount.

Note:  Figures vary by local market, especially those walloped by Hurricane Sandy three years ago and rural and urban areas. We rank #4 in the country at 2.8%, led by FL with 4.3% (mostly hurricane-related) & NY, LA, MS and followed by, ME, DE, and PA.  The national baseline number sits at ~ 1.7%.

2017 foreclosure filings decreased slightly to 70,150+ or -5%, putting pressure on home prices in concentrated areas.  Base on the year to date results for 2018 could fall another 7% to around 65,000 filings.

Tax cuts and Jobs Act effect:

Three specific areas had appeared as concerns:

  1. State and Local Taxes (SALT) are now limited to a $10,000 deduction going forward.
  2. Mortgage and Interest Deductions (MID) are now limited to a maximum principal balance of $750,000.
  3. Home Equity Line of Credit (HELOC) Loan interest deductions is for the most part eliminated

Although it is still too early to tell how these areas will impact total 2018 real estate values in New Jersey, they are sure to have some impact. New Jersey is one of the highest taxed states in the union, and our home values are also some of the highest. How this affects each of us on an individual basis needs to be better understood as there is some trade-off such as higher deductions and overall lower income brackets.

The higher income luxury market is probably most at risk.  But how it affects the overall incentive to own a home is still unfolding.

There were several proposals on the new tax code, and most consumers are not up to date on what passed.  It will take time for this information to be digested.

It also is evident that the out-migration from New Jersey to other more affordable states has continued.

In a nutshell, these changes appear to be having little impact to date, but there will be some very high-end people affected, and that will, in turn, affect that market…

That effect might slow the price growth in higher priced homes NJ and even turn into a deficit in some most affluent areas.

Real Estate Market Recap 

Economic conditions:

  • 2017 was the seventh straight year of 2 million + job gains.
  • Although improving in 2018, the NJ job situation had been declining for the past two years.
  • At 4.2% unemployment, NJ is almost 8% above the national average which is currently 3.9%.
  • The best paying and most attractive jobs are in NYC attracting the millennials in that direction.
  • Interest rates have already risen .5% since the first of the year are forecasted to rise another .25 to .5% by year’s end, taking almost 10% away from buyers buying power.
  • And, house prices are rising 6+ % in the popular housing price points further exasperating the situation.
  • Baby boomers are choosing to “stay put’ and update rather than “move up” to their dream house as it is no longer considered a sound investment (and a lot of times is simply not available) which is causing most of the housing shortage.
  • And there is no entry level construction going on in our area.  Just larger homes and new rentals.
  • As a result of the previous two points, we are experiencing the current housing inventory shortage.
  • Foreclosures are on the decline and to some extent are helping to offset fewer listings.
  • Also, there is confidence that the new tax and jobs act will further stimulate the economy with more jobs as the economy remains robust.
  • The new tax rules appear only to affect our very higher-end buyers.

Changes in lifestyle:

  • Average age at marriage is now in the mid to late 30’s (up 7 years from just a decade ago).
  • Families usually have only one to two children due to costs and ability to choose.
  • 65% of all NJ homes have no children of school age.
  • 50% do not have more than 1 person in them.
  • Demand for larger houses has diminished.
  • As a result of the job situation, buyers are gravitating to areas within 15 miles of NYC with good mass transportation systems.
  • 80% of consumers still perceive homeownership as part of the American Dream.
  • It is just what they want to buy (or rent) that has changed.
  • Builders have been thinking 4 BR center hall colonials on 1+ acre in the country.
  • Buyers are thinking luxury hi-rise close to mass transportation and work.
  • And, for the first time in history, Hunterdon County (which has been declining in population) has reported more deaths than births in 2017.

Market conditions:

  • We are starting to see some warnings of an economic slowdown in late 2020 as the fed raises interest rates to curb inflation, and this needs to be monitored.
  • But, in general, homeowners are sitting with more equity than ever and are no longer using their homes as an ATM.  So, the effect of any slowdown on housing should be minimal (if at all).
  • Consumer confidence remains extremely high nation-wide based on the job and stock market increases.
  • This confidence is reflected in buyer traffic being up at open houses.  However, with lack of inventory, there are fewer houses for sale.
  • Millennials make up 24% of our current homeowners with more room for expansion at the lower end of the market when adequate inventory supply materializes.
  • Central New Jersey’s trend for 2016 and early 2017 showed a surge in home sales but price increases only in houses clustered in < $500,000 market where the first-time buyers and Millennials are focused.
  • The >$600K market holds steady to diminishing slightly, depending on location and price.  Often when a >$600K property goes on the market, it’s competing with a >$700K that needs to sell quickly (etc.). The extreme high-end market has also seen some appreciation in 2018 so far.
  • Minimal new construction, lack of entry-level new housing and COAH restrictions add additional value to the current inventory.
  • Analysts five-year forecast indicates slow and steady price growth at an annual 3 to 4%.  This is higher in the under $400K market.
  • There is an acute shortage of inventory in both Hunterdon and Somerset County. In our more popular price points and locations, this holds back sales.  In general, we have only about 50% of the inventory that we had in 2011.
  • In 2017 prices rose ~ averaging just over 3.5% and depending on price points and locations.  2018 promises to be even stronger (without factoring in any tax impact).
  • Mortgage delinquency is normalizing.

Forecast:

  • The economy will continue to prosper with no recession currently in sight for the next 18 + months.
  • Interest rates will Climb to about 5% by year-end further decreasing buying power.
  • Home prices will rise by an average of another 3% during that same period (this will depend on your price point and location).
  • Supply will remain tight in the more popular price points in the residential real estate.
  • Many new jobs seem to be resulting from the Tax and Jobs act.
  • For the first time in memory, the US is reporting 6+ million open jobs and only 6 million unemployed.
  • We now need to match the skills of the unemployed to the job openings to prosper further.
  • The affordability index shows that there is room for much more sales, we just need the increase in inventory.
  • Some decrease in moderate prices home ownership could result in the raising of the standard deduction.
  • Some high-end fall-out could result in the residential real estate from the SALT and mortgage interest changes in the Tax and Jobs act.
  • The commercial real estate market will flourish as a result.
  • Mid-term elections effect is a total unknown at this point.
  • People in their home > 10 years have very positive home equity built up, and a more significant portion of payments applies to principle.  Increases in selling prices should eventually motivate people to make changes in their lifestyle by investing in summer homes or even start a new business with the extra equity cash.

Note:  Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. I took reasonable precautions for presenting this information. Please consult with a professional sales agent and take no actions based on my opinions, gathered trends, and statistics.  I assume no liability.

 


Presented as a public service by:

Joe Peters Logo
 


Click Here to Real Estate Market Guides