The housing market in Bergen County, New Jersey, is far from immune to the ills that are plaguing housing markets throughout the country.
High mortgage rates have locked homeowners into the significantly lower rates they got years ago. The result is a low level of inventory that’s pushing home prices ever higher.
“It’s the same story, I hate to say but people just aren’t moving yet,” said Lisa Comito, president of Greater Bergen Realtors and a broker at Howard Hanna Rand Realty. “They’re still sitting still. So, when the houses do come on the market, there are many offers — if it’s priced right. If the home is overpriced, it’ll sit.”
But is the market starting to turn away from sellers and toward buyers? There’s a flicker of data from Altos Research to suggest it might be.
First, inventory in the county has risen 32% since the beginning of March. Second, the share of listings with price increases has been declining since February, when it was at 1.7%. It now sits at 0.9%.
At the same time, the percentage of listings with price cuts has risen from a low point of 9.5% in May to 11% today. Taken together, this could signal a turn in the market.
But some context is needed around these numbers. For-sale inventory is still less than one-third of what it was in the summer of 2019, so recent gains would have to sustain for the market to be truly pushed in the other direction. The ratios of price cuts and increases are also blips relative to the huge swings seen since the beginning of the COVID-19 pandemic.
And the historic lack of inventory is still giving sellers the upper hand. The county’s Market Action Index score from Altos Research sits at 52, up from 48 in March. The index considers anything above 30 to be indicative of a seller’s market.
“We sound like a broken record because every year we say [inventory] will be lower than the previous year,” said Liliana Militaru, an agent at Redfin. “And this is indeed the biggest problem that we are facing, in fact, because we are next to Manhattan. The quality of life in Manhattan has declined in the last couple of years, and this drives a lot more families to the suburbs, especially families with young kids.”
It’s worth noting that a new report from Douglas Elliman and Miller Samuel shows that Manhattan is turning into a buyers market.
Agents are seeing a lot of cash buyers. If a house on the market is priced appropriately, it might receive as many as 30 offers in a short period of time, creating a bidding war. In almost all instances, agents say the seller will prefer the cash offer to avoid a potential problem with the buyer’s mortgage killing the deal.
The cash buyers — some of whom are deep-pocketed Manhattanites — temper the effect of high interest rates on the market because they don’t need a mortgage. This has helped push the median home price in Bergen County from $700,000 at the onset of the pandemic to $925,000 today.
“Historically, every time interest rates would rise, there would be a little bit of a slowdown in market activity, but as you can see in the stats, that’s not true at all,” said Attilio Adamo, a veteran Bergen County broker who joined SERHANT. in June.
