Real Estate Market Update Report Somerset County NJ

Somerset County’s Real Estate Market Conditions | January of 2018

Somerset County’s Real Estate Market Conditions | January of 2018

Real Estate Market Conditions

Get ahead of the real estate market economic and behavior drivers in Somerset County, New Jersey with Coldwell Banker Residential Broker sales associate, Joe Peters.

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

  1. Branchburg
  2. Bridgewater
  3. Somerville
  4. Hillsborough 
  5. Warren
  6. Watchung

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 sold averaged 75 days on the market. 270 properties went “under contract” in December, down from 307 in the prior month. Newly listed properties in the same period totaled 183.

Somerset County Inventory Breakdown by Price for last month:

New Listings Under Contract Active Listings Month’s Supply
Condos/Town Houses * 133 132 358 3
Over 55 Communities* 10 19 50 3
$000K to $199K 33 38 91 2
$200K to $299K 81 94 245 3
$300K to $399K 79 64 199 3
$400K to $499K 40 42 153 4
$500K to $599K 31 33 139 4
$600K to $699K 29 22 122 6
$700K to $799K 21 14 98 7
$800K to $899K 10 12 83 7
$900K to $999K 16 6 73 12
$1,000K and Up 49 13 260 20
Totals for October 389 338 1463 4
Average Price $579,975 $436,420 -24.8%  
Average Days on Market 61
* Included in $ breakdowns

Somerset County Sales Breakdown Overview:

  • 69 % of sales in houses < $500,000
  • 22 %of sales in houses > $500,000 and < $1,000,000
  • 09 % percent of total sales (or 15 in total) in houses >$1,000,000

Somerset County Inventory Breakdown by Municipality for last month.

Somerset County Sales Breakdown Detailed:

Active Listings Under Contract Month’s Supply
Bedminster Twp 72 17 4
Bernards Twp 151 31 5
Bernardsville 88 8 11
Bound Brook 20 6 3
Branchburg Twp 75 12 6
Bridgewater Twp 161 40 4
Far Hills Boro 14 0
Franklin Twp 202 80 3
Green Brook 34 7 5
Hillsborough 123 31 4
Manville Boro 37 6 6
Millstone Boro 2 0
Montgomery Twp 147 20 7
North Plainfield 71 25 3
Peapack Gladstone 30 3 10
Raritan Boro 12 8 2
Rocky Hill Boro 2 1 2
Somerville Boro 32 8 4
South Bound Brook 13 7 2
Warren Twp 125 19 7
Watchung Boro 52 9 6
Totals 1463 338 4

Two areas in Somerset County reported no sales in the past month:

  • Far Hills
  • Millstone
  • Rocky Hill

Three areas reported one or two sales each last month:

  • Peapack/Gladstone
  • Raritan
  • S Bound Brook

Hotspots:

  • Bernards – 24 sales
  • Bridgewater – 33 sales
  • Franklin – 51 sales
  • Hillsborough – 33 sales
  • Montgomery – 16 sales
  • N Plainfield – 31 sales

These hotspot areas equaled 69% of the sales last month. The average new listing coming on the market last month neared $561,667 The average price of a unit going “under contract” neared $435,911 (22% 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 in to 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.

 

New Jersey’s Economic Drivers:

New Jersey Home Sales:

Home purchase demand increased by 5% in New Jersey during November giving the state its 7th consecutive month of increases. (These numbers run a month behind).  The same number were about 9% in 2016.

New Jersey experienced a compounded growth rate of 17% over the past two years. Sales increased by 5% YTD.

Activity concentrates in the <$400,000 market where Millennial buyers transition into home ownership. During the same period, all housing sales showed increases across all price points showing confidence in the new administration’s plans on taxes and deregulation. There has also been some 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 and had recently decreased. The supply decreased by ~ 5,000 homes, compared to a year ago.  Currently, ~37,000 fewer (-50%) homes are on the market compared to the 2011 peak.

Current unsold inventory in New Jersey sits at just under 4.4 months vs. 5.4 months from a year ago.

We have an acute shortage of inventory in both Hunterdon and Somerset county in our more popular price points and locations.

Hunterdon County has ~18% less inventory, and Somerset County also has ~ 16% less inventory than a year 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 at the end of December rose slightly to a level of just over 3.98% for a 30-year conventional mortgage. A fifteen-year conventional mortgage rests at just under the 3.4% range. Five and seven-year arms are just under the 3.5% range.

Consumer fears of steadily rising rates and slowly rising home prices impact the current market. The Fed already instituted 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.

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

National Job Front:

US unemployment rate is 4.1%. This is the lowest it has been in over forty years ! And, it is a decline of over 70% from the peak which happened in 2009.

On the national level, we reached full recovery in May of 2014 with 2,700,000+ job gains in 2015. Revised figures show a gain of 2,242,000+ in 2016.  Expectations of 2,100,000 jobs in 2017 leave us at  -5% from 2016.

  • The national U-3 unemployment rate stands at 4.1% (the lowest in over forty years)
  • U-6 unemployment rate stands at 8%

Note: Due to full-time and part-time jobs counted equally by the BLS, numbers differ.  The US economy still needs to create an additional 2,600,000 jobs to reach the same employment rate that existed before the start of the 2007 to 2009 recession.

But, the momentum is building and the result is consumer confidence is the highest since 2004. Great news for the housing industry !

New Jersey Job Front:

NJ unemployment rate increased to 5.1%, bolstering consumer confidence remains high in NJ as well.

New Jersy job growth increased by 65,000+ in 2015, the best in 15 years. Projecting on those numbers, New Jersey’s recession losses would recover by 2017.  To date, we reached 96% of projected numbers. Finalized projected numbers showed 59,000 in 2016. Still good!  Although we still trail the nation, we’re on pace to add 39,000 jobs this year vs. 59,000 being added in 2016 (- 34%).

Thru November, 33,000 additional jobs were added YTD vs. 50,900 for the same period last year.

It should be noted that even though these numbers are somewhat disappointing, the levels of the jobs being added at is much higher than in the past several years (a silver lining?).

Rental Market Trends:

Tight Market!

Prior restrictive mortgage standards nudged Millennials to postpone home ownership until later in life 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 29 to 37 years 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 ~ 10% annually, averaging over $1,300 per unit. Current vacancy rates in central New Jersey rest at 2.4%, the lowest in the state (which is at 4.2%) and the nation (which is at 4.5%).

The drop in New Jersey’s homeownership contributes to rental demand.  A 12+ year trend shows a decrease from  71% to 62%.  This 8% decrease compared to an 8% national decrease contributes to the slower recovery of home prices in the state.  One or two-person households with no children stands at 65%, reflected in our school population.

New Jersey Foreclosures:

New Jersey continues to face high foreclosure rate filings. Other states have begun to, or already have recovered. In 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 still rank #1 in the country at 3.8%, followed by NY, LA, MS, ME, FL, MD, PA, MD, RI and DE.  The national baseline number sits at ~ 1.7%.

2016 saw a 3% decrease over the prior year and added a ~ 71,100 filings, compared to 76,800 in 2015.  2017 YTD  foreclosure filings YTD have decreased sllightly with 2016 YTD.  Forecasts project 72,000+ or -4%, putting pressure home prices in concentrated areas.

Tax cuts and Jobs Act effect:

There are two specific areas that are evident:

  1. State and Local Taxes (SALT) have been limited to a $10,000 deduction going forward.
  2. Mortgage and Interest Deductions (MID) has been limited to a maximum principal balance of $750,000.

Although it is too early to tell how these 2 areas will impact real estate values in New Jersey, they are sure to have some impact. This is based on our state being one of the highest taxed states in the union and our home values being some of the highest. How this affects each of us on an individual basis needs to be better understood as there are some trade-off such as higher deductions.

In a nutshell too early to tell…

 Real Estate Market Recap

  • Consumer confidence is extremely high. This is mainly based on the job and stock market increases.
  • 80% of consumers perceive homeownership as part of the American Dream.
  • Millennials make up 24% of homeowners with room for expansion at the lower end of the market with adequate inventory supply.
  • Analysts five-year forecast indicates slow and steady price growth ay an annual 4%.
  • Central New Jersey’s trend for 2016 and early 2017 showed a surge in home sales, but not prices, clustered in < $500,000 market. In 2016, a 1% rise in prices tallied for New Jersey. As inventory builds, prices will rise.
  • In 2017 prices rose ~ nearly 5% in the more popular price points with ideal locations.
  • Houses priced <$400,000 for first-time buyers, and Millennials experience greater pricing fluctuations.
  • 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.
  • People in their home > 10 years think about making a change with a healthy economy.  Home equity built up and a more significant portion of payments applies to principle.  Increases in pricing motives people to make changes or even start a new business with the extra equity cash.
  • Minimal new construction adds additional value to the current inventory.
  • Foreclosures help to offset fewer listings.
  • Also, there is some confidence that the new tax and jobs act will stimulate the economy with more jobs.
  • We have an acute shortage of inventory in both Hunterdon and Somerset county in our more popular price points and locations. This is holding back sales which would lead to more sales as sellers move up or right size.

Somerset County

Net-Net

Either as a seller or buyer, navigate this real estate market with me!

  • Still low-interest rates
  • Much pent-up demand
  • Anactive market with increasing prices in the more popular price points and locations
  • High consumer confidence

Call me at 908-238-0118 to discuss your situation, and I’ll put my expertise and access to big data to work for you.

Note:  Presented as a public service by Joe Peters of Coldwell Banker Residential Brokerage. I took reasonable precautions 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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USAA members and their families can receive a substantial reduction on their next real estate transaction.

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The Top Ten Events in Somerset County, NJ This Weekend December 1-3, 2017

The Top Ten Events in Somerset County, NJ This Weekend December 1-3, 2017

  1. Festival of the Trees, Somerset County Environmental Education Center
  2. Edible Jersey’s 3rd Annual Holiday Market, The Willow School
  3. Somerville Holiday Art Crawl, Downtown Somerville
  4. Holiday Lights Parade, Downtown Somerville
  5. The Best Christmas Pageant Ever, Somerset Valley Playhouse
  6. Winter Wonder Lights Laser Concert, RVCC Planetarium
  7. Grain House Cookie Brunch, The Olde Mill Inn
  8. The Irish Tenors, State Theatre New Jersey
  9. The Ultimate Christmas Show, The Theatre at RVCC
  10. 10. It’s A Wonderful Life Live Radio Play, Brook Arts Center

Check out full calendar of events


 

 


Presented as a public service by:

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USAA members and their families can receive a substantial reduction on their next real estate transaction.


 

 


 

 

The Top Ten Events in Somerset County, NJ This Weekend November 17-19, 2017

The Top Ten Events in Somerset County, NJ This Weekend November 17-19, 2017

  1. Thankful Lights, Leonard J. Buck Garden
  2. 2017 Int’l Juried Exhibition – Opening Reception, The Center for Contemporary Art
  3. Farm to Table Indoor Winter Market, Duke Farms
  4. Nobuntu, RVCC Arts
  5. National Acrobats and Martial Arts of China, State Theatre New Jersey
  6. Fireside Chat: 1940 – A Doorway to the Future, Van Lieu-Suydam House
  7. Laser Modern Rock, RVCC Planetarium
  8. Turkey Talk, Scherman Hoffman Wildlife Sanctuary
  9. Bear Says Thanks Storytime, Barnes & Noble Somerville Circle
  10. Arboretum Tree Hike, Duke Farms

Check out full calendar of events


Presented as a public service by:

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USAA members and their families can receive a substantial reduction on their next real estate transaction.


 

The Top Ten Events in Somerset County, NJ This Weekend November 10-12, 2017

The Top Ten Events in Somerset County, NJ This Weekend November 10-12, 2017

 

  1. Arboretum Tree Hike, Duke Farms
  2. The California Guitar Trio, Farmstead Arts Center
  3. Moscow State Symphony Orchestra, State Theatre New Jersey
  4. Perceptions Artist Reception with Peter Fiore, Studio 7 Fine Art Gallery
  5. The Skies Over Hogwarts, Planetarium at RVCC (Reopened!)
  6. Lantern Walk, Fairview Farm Wildlife Preserve (Postponed from 11/5)
  7. Photos with Santa, Bridgewater Commons
  8. Open House, Jacobus Vanderveer House & Museum
  9. Crankie Storytelling, Theatre at RVCC
  10. Brit Floyd: Immersion World Tour 2017, State Theatre New Jersey

 

Check out full calendar of events

 

 


Presented as a public service by:

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USAA members and their families can receive a substantial reduction on their next real estate transaction.

The Top Ten Events in Somerset County, NJ This Weekend October 27-29, 2017

The Top Ten Events in Somerset County, NJ This Weekend October 27-29, 2017

 

  1. Fall Festival, Lord Stirling Stable
  2. Halloween Party, Branchburg Sports Complex
  3. Mischief Night Madness, Colonial Park Putting Course
  4. MISH Presents the Glenn Miller Orchestera, USET Headquarters
  5. Haunted Walking Tour of Basking Ridge Village, Basking Ridge
  6. Halloween Brunch, The Grain House Restaurant
  7. Jazz Club Supper Series, The Bernards Inn
  8. Brad Garrett and Rita Rudner, State Theatre of New Jersey
  9. The Capitol Steps, Theatre at RVCC
  10. Allison and Carlos Franzetti Concert, Farmstead Arts Center

 

Check out full calendar of events

 

 


Presented as a public service by:

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USAA members and their families can receive a substantial reduction on their next real estate transaction.