In February 2021, Danbrot+Labianca’s newsletter column, The Real Real (Estate), about the real estate market outlook, started like this: “We are two months into 2021, and the market is showing no signs of slowing down” in South Orange, Maplewood, and Montclair.
It’s no surprise that the 2021 landscape of Covid, including the introduction of the vaccine and the Delta Variant, have directly (and indirectly) affected the real estate market. Then add the usual suspects of the economy such as interest rates and the nation’s psychological state. You get the proverbial stew that is market analysis and speculation in 2021/2022.
To wrap our heads around what has transpired in real estate and glean what might be to come, let’s turn to list-to-sale price ratios in a few of the most popular NYC to NJ commuter towns. These are Maplewood, South Orange, and Montclair.
We will review the months from February through September via stats from The Garden State Multiple Listing Service.
The List-to-Sale Price Ratio in Maplewood
- 106% in February ’21
- Rose steadily except for a 1% drop between May and June from 112% -111%
- Spiked at 115% in July – wow! (Summer months are traditionally slower) then fell to 107% in August
- Dipped to 102% in September
The List-to-Sale Price Ratio in South Orange
- 104% in February ’21
- Rose to 112% by April
- Danced from 110% to 111% back to 110% from May through July, and then to 106% in August
- Dipped to 104% in September
The List-to-Sale Price Ratio in Montclair
- 114% in February ’21
- Hung around at 113% and 112% for March and April
- Jumped WAY up to 126% in May (!), then dipped down to 120%, 119%, and 117% in June, July, and August
- Bumped back up a bit to 119% in September
Despite highs and lows, even the lowest list-to-sale price ratios in these Essex County, NJ commuter towns sit squarely over 100%. This clearly exemplifies the continued strong Seller’s market of the region. And from where we sit as Realtors®, the main factors are low inventory, high demand, and low interest rates.
So, what’s the outlook for the future? As per Jeffrey Otteau, a recognized industry expert frequently quoted in Bloomberg, The New York Times, and The Wall Street Journal, the 2021-2022 NJ housing market is predicted to resemble the 2019 housing market – a solid Seller’s market sans COVID pandemonium. That sounds pretty good!
However, it is also predicted that interest rates will begin to rise over the upcoming year. A 1% increase in interest rate equals an estimated 9% decrease in purchasing power.
So keep your ears and eyes open and plan ahead if there is a purchase or sale in your future! And give us a call us. Wink.