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Montclair Area Real Estate Off to Slow Start in 2022

What can we expect from the local markets over the coming seasons this year?

Montclair housing inventory continues to be in short supply as the Covid spike and wintry weather kept sellers at bay.

There were only 19 new listings in January vs 39 last year, reducing active listings for the month to 36, vs. 89 in Jan ‘21. That’s a significant drop. Note that there are currently only about 9 single family homes available in Montclair, 3 in Essex Fells and 1 in Glen Ridge! 

Not much to choose from, but remember that many buyers have been in the market for a year plus and they will immediately act when the right home becomes available. 

Additionally, it’s no secret that prices are up and we expect sellers to begin entering the market over the next 6-8 weeks. It could be sooner as there is less predictability to timing of the housing market sales cycles since Covid.

Nonetheless, be prepared!

Contact me for tips on how to get prepared for the upcoming seasons.

The Effect of Rising Interest Rates

In theory, an increase in interest rates should temper prices as purchase funds get more expensive to borrow.

Over the past year, 30 year fixed mortgage rates have increased from 2.73% to 3.55% (at the time of this writing). This increase of .82% would reduce an $800,000 loan to $720,500, for the same $3,257 monthly spend. At an 80% loan to value (LTV), house affordability falls to $900,625 from $1,000,000 in this example. That’s a significant decrease in purchasing power. 

A shift in rates can also serve as a tailwind for sellers, as increasing rates typically motivates buyers, spurring higher demand and supporting solid price levels.

Also, we are seeing buyers take out smaller loans relative to home value as they access equity from their own real estate sales or benefited from stock market appreciation.

There’s a lot going on!

Do you want to learn more about the current market and where your home fits in?

Feel free to reach out with your questions.

Best, Rich

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