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Montclair, NJ

Good News for Buyers & Sellers

The April Montclair market brought good news for buyers and sellers.

The good news for buyers was that 60 new listings hit the market, the highest number since March 22.

The good news for sellers (and conversely, bad news for buyers) is that the median sales price remained over $1.3M and the price premiums of 31% over ask flirted with the past record highs of 32% last April, and 34% last June.

Price Premiums

I’ve taken a dive into price premiums and think it’s worth it again as it is a common topic of discussion and often misunderstood.

31% average price premiums, as I’ve mentioned before, is really unique to Montclair, and to a lesser extent, Glen Ridge. Fueling that 31% is the fact that among the 20 closings, 6 sold for 50% or more over asking.

1. Were some listings priced way below market?
2. Were some purchased at numbers the buyer will never see again?

Yes to both, in my opinion. Remember that the 31% is the average sale vs average ask price. The average of the premiums themselves was 35% in April.

Are such high premiums indicative of a healthy market?

I don’t think so, and it does make buyers’ and sellers’ reliance on an experienced agent’s opinion on market value more important than ever.

I was at a broker open today with a list price of $1.4M. Buyer agents better prepare their clients for a price tag closer to $2M. 😳

What do high price premiums mean for taxes?

I’ve talked about price vs assessed value before, but will delve into it again.

Tax assessments in Essex County only change during reassessment years or after capital improvements (permitted). Town-wide reassessments are at the discretion of the town, but no more than 10 years apart, which means Montclair is due in 2027.

The towns keep track of what the ratio of assessed value to market value is annually. This is called the equalization rate. That number is 61.52% for 2024 and can be found here.

• So if your market value is $1,000,000, your assessment should be $615,200. 

“Fun Fact” – the assessors office opinion of market value of all Montclair real estate is $11.7 billion.

Among the April sales, eliminating pre-assessed flips, the ratio averaged 51%, so sales prices continued to increasingly distance themselves from assessed values.

Q – If your assessed value was 40% or less of the purchase price, are you in for a big tax hike?
A – Chances are pretty good that you are.
Q – During a revelation, does the assessor assign your value based on purchase price?
A – It certainly weighs heavily and if it falls in the reval year, and it’s a “normal” transaction, chances are excellent that you’ll be assessed at purchase price.

Best, Rich