Average Local Home Prices Continue Climb

….While Sellers Temper Expectations

Local Housing Market Starting to Split

We saw a new high average sale price of $1.29 million in July. (Keep in mind that these closings were under contract 30-60 days ago.) At the same time, buyer traffic has slowed in part due to interest rates increases and a lack of inventory. 

The Montclair estate market continues to split with the $1million plus end holding onto prices, while the $500k – $800k is starting to see the effects of higher interest rates as buyers reassess their budgets.

The higher end of the market has been dominated by cash or low loan to value offers which limits the effect of interest rates. Markets like Bloomfield and Cedar Grove, where the average price is closer to $500k-$600k, should feel more of a pinch from rate increases as buyers are more likely to be borrowing 80% or more.  
 
Contracts in the first week on the market are no longer a given. 

Mitigating Downward Price Pressure

A couple factors should temper any significant price pressures, the foremost being low inventory. Basic economic theory says that 84 active listings in July, versus 123 last year, will result in higher prices. If sellers respond to high prices and inventory grows, we may see prices soften.

Additionally, mortgage rates receded this week as oil prices drop and the Fed hints at slower rate hikes.

Recession fears?

Unless “technical” recession numbers translate into local job insecurity, we shouldn’t see much price pressure.

Reach out to me to discuss questions you have about the local real estate market and what to do. 

Best, Rich

Rich Stanton
Principal Broker
3rd Generation Owner 
(917) 536-8257