This is the first of what will be a series of real estate market reports focusing on the towns of Essex County. These market reports will be largely objective in nature; the raw data underlying the reports has been sourced from the Garden State Multiple Listing Service. It has been further processed using an Excel-based system designed to analyze real estate data in order to provide perspectives what wouldn’t be otherwise available. Any conclusions drawn from the information found in this market report are the sole property of Brian McCabe (REALTOR and author of this report).
It is fair to say that Verona is one of Essex County’s most desirable towns. With it’s combination of quality schools, an attractive commercial center on Bloomfield Avenue, outstanding town services, proximity to NYC, and a varied housing stock, Verona has a great deal to offer buyers of all ages who seek both single family detached homes (fee simple), as well as condos. This report, however, considers only fee simple homes.
A fundamental measure of market health is home prices. Using 2013 as the base year (3 years ago), Verona’s median home prices have risen 5%. Home prices at the lower end of the market…the 25th percentile…rose at a slightly higher rate of 5.4%. But homes at the higher end of the market…the 75% percentile…gained a whopping 13% since 2013.
Here’s what this means going forward. If you are a buyer, the house you could have purchased today could cost more tomorrow. If you are a seller, the house you sell today could be sold for more tomorrow. Of course, there is no assurance that either of these circumstances will actually take place, because other factors are at work…like interest rates.
An important point to remember about home prices is that they are the result of how buyers behave in the market. For example, if buyers believe that there is little competition for houses then there will be less upward pressure on prices. By implication, then, if prices are rising it should be reflected in how buyers behave. And it does…in two ways: how quickly buyers enter into contracts, and how much they offer for homes relative to original list prices. As you will see when buyer behavior in Verona is covered, both of those factors point to continued health of the Verona real estate market.
Market Growth and Change
The real estate market is growing (see following table). Four years ago there were only 104 fee simple sales in Verona. In 2016 there were 162, a 56% increase. Another notable market feature is the sweet spot of the Verona real estate market; homes between $350,000 and $600,000. It’s what buyers expect and they find it.
But what I think is most notable is the growing strength of the $650,000+ market. In 2013, with only 6 homes sold, it was virtually non-existent. In 2016 it accounted for 23 homes sold. These numbers strongly suggest that the upper end of the Verona market will remain strong going forward.
Buyer Behavior: Speed
Here is where we examine the first aspect of buyer behavior that is emblematic of strong real estate markets: the speed with which houses go under contract. In 2016, 6 in 10 houses went under contract in 30 or fewer days and 82% did so in 60 or fewer days. Buyers don’t behave that way unless they believe that they may lose their dream house to some other buyer.
Buyer Behavior: Aggressive Offers
The corollary to speed is price-paid. A total of 123 out of 150 houses that sold in Verona Twp. during the past 12 months sold in 60 or fewer days. The average sales price was equal to the OLP.
Conversely, those houses that took more than 60 days to sell had sale prices that averaged $32,465 LESS than OLP.
If you are a buyer, be prepared to move quickly because quality properties don’t last long in Verona. Have your financial situation well in hand including a mortgage approval letter and liquid funds for a down payment. Property sale contingencies are a serious hurdle to overcome so, if you have a property to sell, you might want to explore a bridge loan to enable you to move forward on your new house before your existing home is sold. Remember, a home owner is taking a risk when an offer is accepted. Your goal must be to minimize the home owner’s perceived risk.
If you are thinking about listing your property for sale, make sure your marketing and your product (your home) are ready to go on day one because the first couple of weeks are so important. Accept only professionally done photography. It makes all the difference in the world. And, perhaps most importantly, hire a REALTOR who knows how to listen and will execute a sales plan based upon your needs.
Questions? Comments? You can reach me at 973-865-1863 or via email at email@example.com. And, keep a lookout for Glen Ridge. It’s up next.