A couple of weeks ago, I published the first of a series of real estate market reports focusing on the towns of Essex County. The subject was Verona, a favorite West Essex destination among buyers who are looking for a town that has just about everything. Now, it’s Glen Ridge’s turn in the spotlight.
Glen Ridge ISN’T a town that has just about everything. It has no significant shopping or commercial area, no town pool, one small park (where I played baseball as a kid), and a fine little bistro on Herman Street (aka downtown Glen Ridge) named Fitzgerald’s 1928. That’s it. And that doesn’t matter one bit.
Why? For three main reasons: charming and comfortable homes on quiet streets; convenient train or bus service to Manhattan, which is only 12 miles to the east; and a highly regarded school system, which serves as a hugely powerful magnet for families. These three factors, plus easy access, in surrounding towns, to all of the things Glen Ridge doesn’t have, make Glen Ridge a coveted place to live.
Note: When you go beneath the surface, you will find that home prices 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 little 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: the speed with which buyers enter into contracts, and how much buyers offer for homes relative to original list prices. Those two factors will be examined later on in this real estate market report.
Over the past three years the median home price in Glen Ridge ($653,000) rose 11.8%. Home prices at both the 75th percentile and the 25th percentile rose, as well.
In the Summary of Home Price Changes (below), the average increase per year was 3.9%. If that rate of increase continues for the next 12 months, the projected price of a median priced house in Glen Ridge will add additional $25,685 in value.
Market Growth and Change
Note: As far as this analysis is concerned, sales are considered to have taken place when contracts have been accepted by both buyers and sellers (under contract). However, during the most recent 12-month periods, actual closings may take place after the end date of that 12-month period, in this case 2/24/17. It is for this reason that under-contract properties are included in sales figures since, to do otherwise, would underreport the number of homes that will actually be sold. It does open up the possibility, however, that sales could be slightly overstated should closings not take place.
The distribution of sales by price point in Glen Ridge has remained fairly consistent year over year, and it reflects Glen Ridge’s diversity of housing stock. It is noteworthy that unit sales bounced up 28% over the past two years. Could it be that some homeowners saw the likelihood of rising interest and jumped into the fray? That theory gets some support from the year-over-year doubling of sales of homes in the $1 million-plus category (see yellow).
Buyer Behavior: The Money Value of Time
Note: The following information was drilled from deeply within the mass of transactional data as reported to the Garden State Multiple Listing Service. By disclosing the relationship between speed to contract and price paid, we have a tool that not only enables the town-to-town comparison of real estate markets, it also informs buyers and sellers how best to achieve their respective goals in the market.
Two graphics tell the story. The first covers speed to contract. The second, price paid relative to original list price:
Two-thirds of sales took place within the first 30 days of on-sale, and 90% took place in 60 or fewer days. Now, a homeowner whose property has been on the market for a few of months could argue that time was not of the essence, and that his or her home will sell when the right buyer shows up. That could be. But it also means that the property is not in great demand and demand and price go hand in hand, as the next graphic illustrates.
A total of 112 out of 125 houses that sold in Glen Ridge Boro during the past 12 months sold in 60 or fewer days. The average amount above OLP was $38,675. Conversely, those houses that took more than 60 days to sell had sale prices that averaged $80,169 LESS than OLP!
This is all about perceived demand. If buyers believe that competition for homes is intense, offers will come quickly and offer prices will be aggressive. And, of course, the reverse is true. Knowing how a town stacks up…or even price points within towns…is very valuable information to have for both buyers and sellers.
One More Market Tidbit
I was at ShopRite the other day buying sweet potatoes. (See picture.) Having some experience with this task I knew that symmetrical potatoes…ones that cooked evenly…were available but required some digging if the bin was loaded, as it was at the time. Occasionally (not this day, however), only weirdly shaped potatoes are left after the bin was picked over. Sort of the expired listings of sweet potatoes…the ones that didn’t sell. Ah-ha! A real estate metaphor?
What if most of the bin was sold, even the weirdly shaped ones that were tough to cook evenly? Wouldn’t that be a good indicator of demand? Metaphorically, wouldn’t that be like the ratio between sold listings and expired listings? Here’s what Glen Ridge looks like over a four years span:
Even without much to compare it to, only 33 expired listings over four years is pretty impressive. And 17-plus sales for every expired listing? The only other town that I have looked at in this manner generated 6 sales per expired listing. I’m anxious to see what the numbers look like going forward. Let me hear from you if you have some thoughts about it.
Glen Ridge is a pretty amazing town. Nestled as it is between Bloomfield and Montclair, and only a quarter-mile wide, you could drive through it without noticing. But buyers notice, big time, that Glen Ridge is a great place to live and raise a family. So, buyers would be well advised to know in advance what their top number is and expect a battle. As I write this there are only five, fee-simple homes on the market. Lots of people chasing too few homes can only mean one thing for prices: they’re going up.
For sellers, market for a fast sale. Make sure your agent has everything ready to go on day one, including a robust social media campaign. Have a broker open house followed by a public open house the following weekend. Conduct an email blast to brokers and agents announcing an available listing in a town that doesn’t get many, and then work with your agent to set a strategy in the event that you get multiple offers.
Questions? Comments? I invite your calls. Reach me at 973-865-1863 or via email at firstname.lastname@example.org.
The author is a licensed REALTOR with United Real Estate – North Jersey, one of the fastest growing real estate brokerages in New Jersey.