October 2019 Housing Market Update
Geoff Green, president of Green Team Realty, welcomed everyone to the October 2019 Housing Market Update. The webinar was held October 14 at 2 p.m. on Facebook Live.
National Housing Market Statistics
RECESSION RECESSION RECESSION
Everyone’s talking about it. Geoff thinks probably the impending 2020 US elections have a lot to do with that as well. The simple fact is that more and more people are starting to think that it will happen. .Because of that, we need to address it. No matter how much less impact we feel this recession would have on the housing market than the last one was, it’s still going to have an impact.
The above charts show a survey of different analysts and influencers in the economic world. Most think the recession will come in 2020. Again, it will be interesting to see the affect that the elections will have. Needless to say, the vast majority believe the recession will start within the next two years, 2020-2021.
Recessions don’t necessarily mean a bad housing market
A recession does not mean that there has to be a sharp decline in price. Or an overall reduction in home valuations. The last series of recessions dating back to 1980 and only two of them had negative price appreciation. That’s important to note. Geoff believes that the bottom will not drop out like it did in 2008. That was a very scary time for the real estate industry. There are now a lot of economic fundamentals in place that should lead to a better downturn, if one were to come.
Projected Home Price % Appreciation holding steady
Again, stake holders, influencers in the world of economics are predicting that not only will pricing on a national basis not go down, but it will continue to appreciate. Not at the pace seen in the last few years, but these numbers are probably healthier. The rapid market we were seeing wasn’t going to last forever and could not be sustained. There is nothing wrong with appreciation slowing and growing at a slower pace.
Regional projections
Corelogic shares its forecast for Year-over-Year percentage of change in price, according to markets throughout the U.S. From this it appears the northeast is looking good.
Local Housing Market Statistics
Orange County, New York
Geoff had expected the green line for units sold to be lower for the third quarter. However, it really held out very well. If you look at July, it was above all previous six years. August was a touch below. And September was even. So it was a good third quarter.
Average Sales Price is doing well. It’s well above where it’s been the last 5 or 6 years.
This is the last asking price versus the sales price. The market is becoming a little more competitive. Sellers are having to negotiate a little more off their selling price. Again, as the market is cooling it’s bound to happen. However, we are not seeing a precipitous decline here.
Days on market is still extremely low. Not one month dipped above any of the previous years.
Sussex County, New Jersey
Although the year started out slower in Sussex County, it caught up in the third quarter. The third quarter was strong, which is important.
Average price is holding pretty strong.
Despite a few dips, Ask to Sold Ratio is remaining at a very high level.
Days on market, not one month has risen above previous years, showing that the market is still strong.
Life events determine buying a home, not market data
Buying a home is based on our life events and where our lives are going. This is good advice. As realtors we want you to find a good home in the place you want to be. If the above three items are all in check, it doesn’t really matter what market you’re in. You’ll make a good decision and you’ll buy a good home.
Housekeeping items
Sign up for Housing Market Updates at GreenTeamRealty.com/HMU. And thank you to our sponsor, REALLY. Join the Real Estate Referral Community for free at REALLYHQ.com.
Meet our Panel
From Left to Right: Toni Kreusch of Green Team New York Realty and Keren Gonen of Green Team New Jersey Realty
The Fear Factor
Geoff started the discussion, asking about the fear factor. Should people be afraid? Should they hesitate? Keren replied that in her experience, people are always afraid of the unknown. That’s one of the reasons people are holding back, whether selling or buying. However, what she did with one of her clients who was buying in Highland Lakes, was advise him to review the previous month’s housing market update. After taking all the information in, that client put an offer on a property and wound up getting the house he wanted. Before learning more about the market, he had been apprehensive about even buying at that time.
Also, Keren reiterated that interest rates are really low and should be capitalized on. Whether refinancing, buying, downsizing, this is the time to do it. Geoff agreed that rates have been so low it’s remarkable. Especially now, at the end of the day, Geoff’s advice is that it’s all about monthly cash flow. What is it going to cost me each month to live there? And do I have enough income minus my living expenses to be able to pay my mortgage, save for retirement, etc. So, financing really matters.
Toni agrees that people can purchase more house for their money and often pay the same or less if you are currently renting. By owning a home you’re building wealth. What better way to save money as you move into your future?
Would a buyer’s market not be the ideal time to sell?
It’s hard being a broker because there are always two sides to a discussion: there are buyers and there are sellers. One would think if we were in a buyer’s market then it would not be the ideal to sell. There would be lots of inventory, you’d be competing against other people, downward pressure on the price of your home, etc., as opposed to a seller’s market. Geoff believes it is the right time to sell. If you’re someone at or near retirement who has been thinking about getting out it is the right time. Even though we’ll be seeing price appreciation for another few years, even if it goes flat or goes down a little, we’re not going to see a roaring uptick at any point of time in the very near future. Pricing is probably as good as it’s going to get. He asked if Keren and Toni agreed.
Keren agreed. And Toni said we’re experiencing a special time right now, with low-interest rates and low inventory. It’s a great time to buy and sell. From a seller’s perspective, Geoff would advise sellers to put their home on the market now.
Is the Holiday Season not the ideal time to sell?
With Thanksgiving, Christmas, and Hanuka coming, these are low transaction months. Many people put aside their buying regimen during the holidays. Less people are identifying homes in November, December, January. However, one phenomenon Geoff has seen was the buyer who needed to buy a home in December. There wasn’t a lot of inventory and they paid too much for a house because they had to buy. A few months later lots of inventory rolled out and prices were lower. As we head into the holiday season, there are still buyers out there who haven’t found what they wanted yet. They don’t care if it’s December. They’ll still want to look and will buy the right house..
More than most any year that he’s seen since being in the business, Geoff recommends if you are a seller thinking about selling, if your home is ready, put it on the market. Don’t wait until Spring. It’s very busy now. Right now is a very good time. Toni said they still have people calling in and coming into the office who appear to be serious buyers, not just lookers. Keren stated that November has always been her biggest month. People looking in the winter are serious. You’ll probably get less traffic, but the showings are going to be more serious. If it’s priced right, there is enough intensity in the market to get transactions.
This is the time to buy – and the time to sell
Geoff predicted that if someone is going to buy a home and is planning on living there at least a 7-10 year period, they’re fine. Even if the market goes down during that time, it’s going to come back up and re-appreciate. The last downturn lasted a really long time. Looking at it on a hyper-local level, it lasted 8 years regarding pricing. It dropped precipitously in 2008 and did not restabilize until 2016. Eight years of price declines is rare in terms of the history of the housing market. He just does not see that happening this time around. While the market may continue to soften for some time, he doesn’t think it will drop that low. And he believes it will come up relatively soft, compared to the rapid rise the last time. This follows the principles of physics. For every action, there is an equal and opposite reaction. The markets tend to do the same thing.
Geoff asked Toni and Keren if they agreed with the premise: if a buyer is going to live in a home 7-10 years, they should be just fine in terms of outliving any market turbulence. Keren did agree, and also reiterated that now is the time to sell. If you’re looking to downsize and you’re on the fence, this is it. We have good qualified buyers and low-interest rates but don’t know how long this will last. Like Toni mentioned, sometimes you can purchase with a mortgage less than a rental. That’s important to mention again because it is the time to buy and sell.
Suitable Housing clause
Geoff mentioned that you can structure your listing to make it subject to finding suitable housing. For example, if a retiree worried about finding housing after selling their home a suitable housing clause could be utilized. However, you do have to give buyers reasonable terms on that clause. It is an option to discuss with your Green Team sales associate if this is a concern.
Selling in a bad market
Geoff recounted that a majority of his listings were during a really bad market. Listings would languish and go on and on, very different than the market we’ve been seeing the last 3-5 years here. To those buyers or sellers going through the transaction process, Geoff offers some advice. Sellers may have a home listed and haven’t had any showings, or maybe many showings but no offers, or offers that fell through. Sometimes the reason that sellers are in that place is because the property is priced too high. A lot of people are not willing to admit it, but it is a fact. To those in that situation, what is going to matter most to you when closing is done is not the bottom line on the closing statement. It’s going to be that it’s over and done and you can move on with your life. Far too many people are trying to get an extra $5,000 or $10,000 while they’re spending $1,000 a month on taxes, interest payments, utility costs, maintenance. That all adds up quickly. They’re also not factoring their own well being, factoring in the stress that comes with the whole process. If you’re a seller and you’re thinking of selling, go for it!
Keren’s thoughts
Keren agreed. She stated that sometimes sellers have it in the back of their mind that they are going to get “X” amount of dollars for their listing and they end up being listed for 6, 7, 8 months. As an agent, Keren believes it’s imperative to make clear that we have several different options. If you are looking to sell quickly, this is where we need to be. This is your market value because as realtors, this is what we do day in and day out. For some sellers the home has sentimental value and they are also concerned about the bottom line. There’s a thin line to walk when discussing price.
Toni’s thoughts
Toni said that working with motivated sellers is helpful. So is aggressive marketing, which is done by your agent. And, if your home is not selling, you should certainly consider a price reduction.
Final thoughts
Geoff hoped that this discussion helps people in this position, who may be agonizing over whether to drop their price. Remember, if the house is priced right, you’re going to get a good offer with reasonable terms. Buyers are looking to move on, too. They need a house, need a place for their family.
Reminder: The next Housing Market Update will take place life on Facebook Tuesday, November 19, 2019 at 2 p.m.
To reach our panelists if you’d like to buy or sell a property or learn more about the housing market
Keren Gonen – 551-262-4062
Toni Kreusch – 845-283-2450
Green Team Realty Third Quarter 2019 Sales Leaders
Congratulations from Geoff Green, President of Green Team Realty, to our Third Quarter 2019 Sales Leaders
Congratulations to Jennifer DiCostanzo of Green Team New York Realty and the dynamic team of Charlie Nagy and Ted Van Laar of Green Team New Jersey Realty for taking first prize as our third quarter sales leaders. It’s no secret that Q3 is the biggest quarter of the year in our industry. Therefore, it shouldn’t come as a surprise that we’re seeing these three names at the top once again. The truth is, behind the accolades there is a lot of hard work. All three of these individuals work tirelessly to yield the results they do. So, keep up the great work everyone!
Jennifer DiCostanzo, Warwick
For this hard working Associate Broker, success is not measured by sales numbers alone. Rather, Jen views true success by the clients she’s helped and the satisfaction she gets from doing her best at something she loves. She is constantly striving to enhance her knowledge and skills so that she can provide her clients with an edge in this competitive market.. Jen has earned her Seller Representative Specialist (“SRS”) and Accredited Buyer’s Representation (“ABR”) Designations. In 2016, 2017 and 2018, she received the annual Sales Leader Award as well as the Citizenship award. Further, in 2017 she became the first recipient of the Green Team MVP Award for over $10 Million in sales. Jen is a member of the NYS Association of Realtors, the Hudson Gateway Association of Realtors, the National Association of Realtors, and the Warwick Chamber of Commerce. In addition, as a Warwick resident married to a NYC firefighter, she understands the needs of commuters and has helped many buyers relocate to Orange County.
Charles Nagy and Theodore Van Laar, Vernon
In addition to this Q3 Award, the team of Charles Nagy and Theodore Van Laar earned Green Team New Jersey Realty’s 1st Quarter Sales Leader Award for 2019. That follows their 4th Quarter and Yearly Sales Leader Awards for 2018. The Dynamic Duo, as Geoff Green affectionately calls them, are equity partners in the brokerage. And they are committed to leading by example. They are strong believers in the Green Team’s unique system of training and support which gives sales associates the tools to provide the best possible customer service and experience. Charlie and Ted come from diverse backgrounds in real estate. Yet together they form a productive, successful team. One bond that unites them is their love of resort properties and living. They have been recipients of the Circle of Excellence Award multiple times between 2014 and 2018. That Award requires minimum sales of $2.5 Million and 15 transactions to qualify. In addition, they were Second Quarter Sales Leaders at Green Team New Jersey Realty for both 2017 and 2018.. And in 2018 they became part of the Green Team’s President’s Club, which honors those associates with $5 to $10 Million in sales volume.
Charlie and Ted are proud of Green Team New Jersey Realty’s growth and achievements. After only two years in business, GTNJR owns their own office building and ended 2018 as the #1 firm in sales volume and transactions in all of Vernon, NJ. They also take pride in the team they are building.
Congratulations to our 2nd and 3rd Place Winners
Green Team New York Realty: Toni Vogel is our second place Q3 Sales Leader, with Nancy Sardo in third place.
Green Team New Jersey Realty: Kristi Anderson is second place Q3 Leader, with Alison Miller in third place.
Sept 2019 Housing Market Update
Recap
Geoffrey Green, President of Green Team Realty, invited viewers to the Sept 2019 Housing Market Update. The update took place on Sept 17, 2019, 2 p.m. on Facebook Live.
National Housing Market Statistics
Recession Worries
According to Geoff, we’re starting to hear the word recession far more than we did a year ago, far more than six months ago. The big buzz is, are we headed to a recession? If so, when? And how dramatic will it be? The bottom line is most people think we won’t be experiencing anything like we went through from 2008 to around 2016.
“The housing crash during the Great Recession left a lasting impression… But as we look ahead to the next recession, it’s important to recognize how unusual the conditions were that caused the last one, and what is different about the housing market today.” Jeff Tucker, the Zillow Economist
Reasons why housing prices and the real estate market should remain strong
- Many people are in a very strong equity position as far as their home goes. That’s the amount of money that is in the value of the home. If you know the fair market value of your home minus the pay off amount of your mortgage, the difference is the equity. Keren Gonen and our Producer, Melissa Bressette, were discussing that over one-third of US households are free and clear of any mortgage. That is a very strong number. From a balance sheet perspective, we’re doing very well as a nation.
- We’ve had good appreciation over the last few years. It continues and most experts agree that despite the market slowing, appreciation is still going to be something that will continue for the next 12 months at least. The question is really by how much.
- Inventory levels are still relatively low. Days on market are low, bidding wars are still happening.
- Mortgage and interest rates are fantastic. Geoff thinks that if you had asked a lot of mortgage professionals a year ago where rates would be now, they would not have predicted how low rates would be. The low rate environment is continuing to fuel the real estate market.
- There is a level of affordability we haven’t seen in a long time. When you package everything together; earnings, mortgage rates, taxes, prices of homes, etc.you get affordability rates that are historically high. That is, how affordable it is for the average American to buy a home.
Equity
Here we’re seeing year over year appreciation growth. It is still very strong. Still where it was a couple of years ago. Percent of negative equity share refers to who is in negative equity situation. That occurs when the mortgage payoff is higher than the fair market value of the home. That has been steadily declining since 2010 and we are now at the lowest level since then. Those are very good signs.
Appreciation
A quick glance at the map of the U.S. on the left side shows nothing is below “0” and everything is still appreciating. Then we review the right side, which examines year-over-year change in price by price range. All price points are in grey. Lower end homes have a bigger market, more demand, which drives up price. However, even the high range homes are experiencing appreciation.
Pricing
Corelogic,a leading provider of statistical data on the housing market is projecting, per the above map, that over the next 12 months the nation will go up another 5.2%. That is a very healthy rate of appreciation. In addition, some other sources, shown here on the right, are predicting a fairly substantial level of appreciation, even into 2021.
Inventory
Historically, left to right, we are still at a very low level of inventory, which means that pricing should continue to increase. or stay strong year over year. Year-over-year inventory levels, we’ve had a bump at the end of 2018, beginning of 2019. Now we can see inventory starting to tighten up again a little.
Mortgages/Interest Rates
Where are they headed? Where are they now? We can see from January 2018 to today the rates that could not have been predicted a few years ago to be so low. And we recognize that this is a good spot that we’re in.
Affordability
On the graph to the left, the yellow line represents median home price while the blue represents purchasing power. It’s evident that there is much less of a variance between the two up to 2005, which was the worst period of time. But we’ve stayed strong. During the crash, home prices went down while affordability went up. And it hasn’t really changed. There is still ta good opportunity for people to secure one of the most important assets they ever will own – a home.
Historical Recession Data
Geoff agrees with everyone who believes that this recession will be much shorter than the last one. The housing market is in a better position. We have better fundamentals in place than we did the last time around. There is not nearly as much sub-prime lending as there was. Of the last five recessions, home prices went down in just two. Home prices went up in the other three.
Having gone through the last recession, it can be hard to believe that prices can actually rise. But maybe this one will go that way as well.
Resource Center
Each month we bring you stats, data and quotes from various trusted industry sources. These resources will now be available to you in our monthly Housing Market Update recap blog post, which can be accessed from GreenTeamRealty.com/hmu/ under Housing Market Recap.
Local Housing Market Updates
Orange County, New York
Units Sold
It’s been a mixed bag this year. The green line is 2019. It’s fair to say the number of units sold is consistent with 2018. We’re definitely seeing a slowing in the number of transactions. But, it’s still a very high historical level. And it’s still a very strong market. So, yes, it’s cooling, but it’s still a very high rate.
Average Sales Price
The average sales price took a little dip this month.That doesn’t mean that prices will ultimately continue to go down year-over-year over 2018. However, units sold has been slowing. Geoff believes we’ll see a softening of the market, rather than a crash.
Ask to Sold Ratio
The last asking price versus what the house sold for and the ratio thereof. As you an see, this year it’s been high, meaning sellers haven’t had to negotiate much off of their asking price. However, recently we’re seeing a dip, which is worth noting.
Days on Market
The days on market have consistently been lower than the previous 6 years, remaining a strong factor in the market.
Sussex County, New Jersey
Units sold
There is a similar situation here in Sussex County; a mixed bag, up and down. However, it’s clear that in the last 18 months or so, the number of units sold has been slowing.
Average Price
It’s interesting that all through this time period average price in Sussex was kind of languishing. And now we see prices taking off,. almost the highest level of prices in the county in almost 8 years. Only July of 2018 was slightly higher.
Ask to Sold Ratio
The ask to sold ratio is again similar to what we’re seeing in Orange County. at 97, 98%, it’s still a strong market with sellers only having to come down a little bit off their asking price.
Days on Market
Days on market are lowest over last 6 years. The market continues to be strong. Further discussion will take place with our panel.
Thank you to our sponsor
Meet our Panel
Keren Gonen is from Green Team New Jersey Realty and is a regular panelist on our Housing Market Updates.
Geoff asked Keren what’s actually happening in the field; if there are signs of the market taking a downturn.
Keren stated that it’s important to note that there are still people buying. still people selling, and there are still bidding wars due to low inventory. On both sides of the border we’re dealing with a lack of good houses. Now that it’s so easy and affordable to buy a good home, it’s really a question of inventory. Some sellers are on the fence, waiting to hear what will happen in 2020. Agents and Sellers would like more inventory to choose from. However, if agents educate their sellers we’ll see a lot more houses on the market in the coming months.
Geoff asked if Keren has found buyers becoming more picky as time goes on. Keren replied that it’s the opposite; Buyers are rushing to put in offers on the houses that they like. She said we want to make sure that good houses on the market do sell quickly, because that makes everyone look good. Whether it’s the listing agent or selling agent, everyone does better in that type of a market.
From the Seller’s perspective, Geoff asked if Keren agreed that we’re not in a market where they can list at any price and sell. Keren stated that surprisingly all the listings she’s had have either come in on point asking price or a few thousand dollars above asking price due to bidding wars. In addition, they’re going under contract very quickly. Attorneys are moving them along, with attorney review much faster than earlier in the year and last year. She had one listing got out of attorney review in literally 48 hours, which was a first for Keren.
Pricing
Geoff said he was sure that Keren was choosing comparables carefully to make sure the information is accurate and she’s setting a good asking price. She replied, absolutely. That’s the first thing – Listing Agent 101. You want to make sure you do your comps properly so that you don’t sit on the market. Geoff stated that ‘s the message to all Sellers. The hardest conversation to have as realtors is price reduction. It’s kind of like having mud on your face. We’re the ones who bring in the comps, make recommendations on what we feel the fair market is for their home, Many Sellers don’t listen and just want to list at the price they want. But many people do listen. However, sometimes a price reduction is necessary. However, no matter what market you’re in, you have to price it right.
Keren said one of the things she does with all of her Sellers is ask them what their time line is for selling their home. Meaning, are we okay to sit on the market for 3, 4, 5, 6 months? Or are we looking to get an offer within the next month to 2 months. Then, according to what they tell her that’s where she prices the house. She has had clients that tell her they don’t care when they move, the house is paid off and they’re not in a rush. And they want a specific amount for their house. So Keren tells them that’s okay as long as they understand that according to her market analysis, they won’t sell until we reach this price. As long as they understand that, she’s fine with listing it at that price. Ultimately it’s always the Seller’s decision.
The recommendation
Price it right from the beginning. Price it to sell from the get go. You’re likely to get a higher price. There is never a better time to sell your home than when you first list it. It’s new, there are buyers out there waiting for the next house to come out on the market. They’ve been out there looking and haven’t found what they’re looking for yet. Now your home is new and it’s on the market.
Bank Inventory
Geoff asked Keren what she is seeing as far as bank-owned inventory. He considers Keren to be a leading expert in Sussex County on the subject. Keren stated that they are not seeing too much being released by the banks. Whatever was out there was sold. She hasn’t seen anything new that’s affordable for an investor or flipper or someone who wants to take on renovations on their own. It has been quite a few weeks since she’s seen those. She has seen some that are borderline, with a few things missing, but those are priced too high. There really isn’t any new release of inventory from them.
Geoff then asked if Keren is still seeing bank-owned properties continue to be rented, an anomaly that we’re seeing over the last 5-6 years. As far as Keren knows, they are, remarking that it seems banks now want to be landlords as well. Geoff mentioned some clients who rented a bank-owned property and once they got in there was problem after problem. It was discovered that there was a lot of substandard that had been done. Caution people buying inventory to make sure that the renovations have been done correctly. The flips that Keren has seen by banks are usually bid out to the lowest bidder and that reflects in the workmanship.People can get caught up in the moment; the price seems right. And they may think they’re getting a better deal because the property is bank-owned.
Wrapping it up
Geoff has been in the real estate industry for going on 15 years. He has worked a lot of hours every week during those years and developed a great appreciation for agents like Keren, working in the field.The housing market in this country would not be what it is without the hardworking agents. They keep data accurate, make sure clients needs are met. Other market places around the world are not nearly as well run as they are here. We are getting into an age where it may be possible to just buy a home from Zillow offers, etc. However, the expertise, knowledge and support offered by real estate agents cannot be duplicated. Geoff’s final word… Find a Realtor!
Keren Gonen can be reached at: 551-262-4062.
July 2019 Housing Market Update
July 2019 Housing Market Update
Geoffrey Green, President of Green Team Realty, welcomed viewers to the July 2019 Housing Market Update, held on Tuesday, July 16 at 2 p.m. He started off by presenting the most recent numbers.
National Housing Market Statistics
Pricing – Where are things headed?
Looking at year-over-year change in price, only one state, North Dakota, is at a 0% price appreciation change year-over-year. Pretty much we’re seeing gains in price throughout the country. Idaho is leading the charge. The northeast is a little weaker than many other areas of the country.
Corelogic is a substantial company that aggregates a lot of data from many sources. They are a player in regards to legitimate statistics in the real estate industry. Essentially they are predicting the year-over-year price change will round out at about 5.6% which is up from the previous prediction of 3.6%. There is enough economic data to support the higher prediction.
House Appreciation
Over 100 economists, real estate experts and market strategists made predictions on cumulative house appreciation by 2023. The Bulls predicted 27.7%, the Bears 6.7%, while all projections indicated 16.8%. It is significant that even the Bears, the most cautious participants, did see some level of appreciation.
Optimism regarding future price appreciation
The most optimism lies within the middle income of the country.. The higher end is also optimistic. However, people at the lower income level are more pessimistic. The graph show historically how optimistic people in these income levels were, compared to where they are now. People in the upper third income group are a little less optimistic than they have been historically. Higher end sales seem to be dragging; there is a lot of inventory available. Perhaps there is a correlation there.
Seller Traffic
Traffic is up since February, and things are busy. The panelists will speak to this later.
February 2019 June 2019
30 Year Fixed-Rate Mortgage Rates
30-year fixed-rate mortgages are at their lowest rate for 3 years, which is important. Mortgage rates have plummeted this year, leading many to anticipate the market will continue to increase as money becomes cheaper. The lower rates make it more affordable to own a home.
Quotes that tell us the second half of 2019 is on a path to be extremely strong
Danielle Hale, Realtor.com’s Chief Economist
“Lower mortgage rates, higher wages, and more homes for sale have helped counteract rising home prices, and ultimately, made it so that buyers are able to afford more than last year.”
Ralph McLaughlin, Deputy Chief Economist at CoreLogic
“With mortgage rates flat and inventory picking up, we expect more buyers to take advantage of easing housing market headwinds.”
Sam Khater, Chief Economist at Freddie Mac
“The drop in mortgage rates over the last two months is already being felt in the housing market. In the near term, we expect the housing market to continue to improve from both a sales and price perspective.”
Ivy Zelman and the “Z” Report
“Key metrics tracking existing home sales demand have been on an upward trajectory so far in 2019. This portends positively for our forecast for existing home closings to increase by 1% in 2019, despite a 3% decline though the first five months of the year.”
Local Housing Market Statistics
A Quarterly look for the last 5 years of the Combined Counties of Orange, Rochester and Westchester, New York
Units Sold
How many homes are selling is what Geoff calls the “mother’s milk” of the industry. With this bigger data sampling, trends can be more telling. There is no question that the market has been going down The market has been softening when you combine the three counties. In fact, outside of 2015 it is the weakest second quarter we’ve had in four years.
Average Selling Price
Prices are still strong, at or above the last four years per this chart. We should continue to see some appreciation, but Geoff does expect the numbers to get lower, despite predictions to the contrary by some others.
Average List to Sell Price Ratio
Basically this is the last asking price of the home versus what it sold for. The higher the number is to 100%, the hotter the market is. While it’s down a little from last year, the percentage is still good. However, it does indicate a softening of the market.
Days on Market
Here, the lower the number, the hotter the market. Here you can see that this number is softening, too, as it intersects with where it was last year at this time.
A Quarterly look for the last 5 years of the Combined Counties of Sussex, Morris and Passaic, New Jersey
Units Sold
Things are definitely a little bit slower on the New Jersey side. We’re down significantly in the first two quarters of 2019 in these counties. We’re only above 2015 and below the last three years. Again, indications of a softening market.
Average Price
Price was up first quarter of 2019, but we’re now starting to see prices soften as the average price is near even with 2018 second quarter number.
Average List to Sell Price Ratio
This number is going up, consistent with what is happening in New York.
Days on Market
In New Jersey, there is a marked decline in days on market, as opposed to New York, where that number was inching up. This indicates a more competitive market.
And now a word from our sponsor…
Meet our Panel
Geoffrey Green, Moderator, President, Green Team Realty
Jennifer DiCostanzo, Green Team New York Realty
Keren Gonen, Green Team New Jersey Realty
Momentum
Jen feels very good about momentum on the Orange County side. She feels it’s a great playing field for both buyers and sellers. Furthermore, having interest rates so low is an incentive for buyers. Some buyers who might have used cash are deciding to finance instead because of the low rates. We are fighting low inventory. But if the house is priced right and is in good condition, it’s sold. However, it still is vital to get inventory up.
Keren finds buyers much more educated than in the past. But they are also hesitant. She thinks some of that stems from deciding if this is where they really want to be. If you’re ready, have done your homework, then find a house, doubt can set it. Perhaps that it shouldn’t be this easy. She’s had situations where she’s told buyers that this is a hot market and if they’re interested they need to put an offer in that same day. Tomorrow the house will be gone. By waiting a week, they lost the house.
High End Market
Geoff asked Jen if she sees a lot of high-end inventory on the Orange County side. Jen replied that she’s seeing more of the $500,000/$600,000 in her own inventory and others. There is definitely an increase in the higher end homes. However she sees that market starting to soften. New construction has an impact on pricing of resales. Therefore, the higher-end homes are feeling that hit from the competition. The new property tax implications also impact the larger, high-end homes. She believes that ultimately we’ll see more downsizing.
Geoff responded that there could be interesting opportunities to buy high-end homes over the next five years for people who are looking for a weekend home or retreat. Jen has definitely seen an increase in purchases of second homes.
Geoff asked Keren about the situation in New Jersey. Keren feels that the stats on homes that haven’t sold more than previous years is more from Passaic and Morris Counties. Keren does business in those counties and in ones further south, but a lot of high-end houses in Bergen are being rented. Keren is also finding buyers looking for a second home in the $400,000-$500,000 range. And while we might consider that high-end, to them it’s just a home.
Bidding Wars
Geoff stated, “At the end of the day, we’re still there. There are still bidding wars. If something is priced right, it’s in the middle of the market, it’s well located, it’s gone. There are multiple offers immediately.” Keren thinks that homes that are more affordable in Sussex County have had above priced offers. She still sees a hot sellers market.
Geoff asked Jen if she is seeing the same thing in New York, with intense bidding wars. Jen replied that, again, if the product matches condition and pricing, it’s gone. Especially in the median price-points, Especially anything in the $200,000 to mid $400,000’s.
Appraisals
Geoff then asked about appraisals, if they are coming in okay, or if they are not valuing. Jen hasn’t had an issue with appraisals. She is starting to see some sellers’ concessions inching their way back in. Providing a cushion for buyers, that’s some equity there that they haven’t seen in awhile. That’s a good indicator.
Keren also finds that appraisals are coming in okay. She has also seen a lot of sellers’ concessions. According to Keren, 90% of offers she puts in on the buyer’s do get some concession from the seller.
Having done the Housing Market Updates for some time, Geoff finds that appraisals haven’t seemed to be an issue for the past 12-18 months. However, he recalls that it was a problem a few years ago. As the market was really taking off as prices were jumping it was hard for appraisers to justify comps. It seems that that has evened off.
What are banks doing with foreclosures?
Geoff asked Keren about the situation with bank foreclosures, REO’s. Whether they were releasing more inventory or hanging on tand renting them. Keren replied that they are flipping them, flips are not done well because work goes to lowest bidder. In the end it’s the buyer who gets the short end of the stick. They’ve bought a renovated home, they’re happy, and then she gets the call… This broke and this happened, but there is nothing that Keren can do at that point.
The panel turned the discussion towards the importance of trades people. Plumbers, contractors, etc. The more poorly done renovations there are, the more repairs will be required. Keren did point out that unfortunately there seems to be less people going into these trades. It can be challenging to find labor and materials are expensive.
Wrapping it up
Jen’s final words…. “Keep buying!” According to Geoff, rates are declining, inventory is pretty good. Units sold is trending down, prices are softening. So if you’re a buyer, this is an interesting time. And Jen pointed out that even if someone is not interested in selling at this point, it’s a good time to refinance.
To contact the panelists:
Jennifer DiCostanzo – Cell #917-916-9995
Keren Gonen – Cell #551-262-4062
Next Housing Market Update
August 20 at 2 p.m. Stay informed – sign up for our Housing Market Updates at
April 2019 Housing Market Update
The April 2019 Housing Market Update was held on Facebook Live Tuesday, April 16 at 2 p.m. If you missed the live webinar, you can view it at your convenience by clicking here. You can also sign up for updates at GreenTeamRealty.com/HMU.
Geoff Green, President of Green Team Realty, began the update with some national statistics. Discussions have been going on for months as to what the 2019 would look like. And, for the most part, it’s roaring. At least that is the case in our area, the northeast.
National Housing Market Statistics
Total Existing Home Sales
This chart shows the total existing home sales for every two months, year over year. There was a dip, with things trending down, from the end of 2017 through 2018 nationally. But there is a bump at the beginning of 2019. And it seems to be busy for everyone right now. The thinking is that this may be another banner year.
Median Price of Existing Home Sales
Prices have very consistently increased over the last 3 to 4 years. And there doesn’t seem to be a reason to anticipate any change in that trajectory any time soon.
Existing Home Prices by Region
Breaking down existing home prices in terms of regions, this shows where we are now versus last year. The Midwest is leading home prices increases, followed by the Northeast.
% Change in Sales
As prices have risen, there are fewer homes across the nation in the $0-$100,000 range. This low inventory has resulted in the change in sales for that price range. However, it is also interesting that on the very high end, transactions of $1 Million+ have faltered and slowed down. When you start to get into those metro areas where $1+ Million is not unusual, people may be starting to find it’s a little out of reach.
Housing Supply at the National Level
The lack of inventory has been seen as a reason for why the number of transactions was softening for the last 12, 14 months; The supply level peaked in 2018 and then came down towards the end of 2018. But it now looks like it may be coming up again. We really need this to happen to keep the transactions going.
Projected Home Price Appreciation
A panel of over 100 economists, real estate experts and investment and market strategists were interviewed for the most recent Home Price Expectations Survey. These experts have raised the projections they made in the 4th quarter of 2018 for 2019 and 2020. They are anticipating a better year than they first thought.
Mortgage Rate Projections
Despite a zooming market and a very solid economy, rates in Geoff’s view are still remaining low. Someone who was looking for a home a year and a half ago may now see rates up a point and think that they are now “high.” However, Geoff says that rates are still historically low.
Local Housing Market Update
Orange County, NY – Units Sold
We seem to be holding even compared to last year. Perhaps a tick better. This is good news.
Orange County, NY – Average Sales Price
So far this year we’re basically even with last year.
Orange County, NY – Ask to Sold Ratio
Ratio at which a home sells versus the last asking price. The ratio seems to be trending higher which means that demand is still very high. People are willing to pay at or near asking, if not over asking. Bidding wars are still continuing.
Orange County, NY – Days on Market
The days on market continue to drop consistently. Homes are still selling fast, selling quicker each year. All signs point to a continued Seller’s Market.
Sussex County, NJ – Units Sold
Units sold in January and February were lower than in 2018. However, in March the number rose, coming in a tick higher than March 2018.
Sussex County, NJ – Average Price
Sales prices in Sussex have been a bit of a conundrum. Price hasn’t taken hold and there has been a significant one month drop from February to March. This will be an interesting analytic to watch as the year goes on.
Sussex County, NJ – Ask to Sold Ratio
Again, the higher the number, the closer things are selling towards the asking price and the less sellers are having to negotiate off those prices. We’re looking at some very strong numbers here.
Sussex County, NJ – Days on Market
Again, here the lower the number the stronger the market. Here was have a steady pattern of fewer days on the market. Homes are selling faster and faster.
Meet our Sponsor
This Webinar is sponsored by REALLY – A real estate referral network for Agents. REALLY Easy Referrals are as Easy as 1, 2, 3…
- Enter your referral in 5 minutes or less
- REALLY notifies you of all willing Agents
- YOU choose the Agent and legally bind with one tap!
The best part – No fees on commissions exchanged between Agents. Join for FREE.
Meet the Panel
Laura Moritz,
Classic Mortgage
aura Moritz has been with Classic Mortgage for 18 years.
Geoff Green began the panel discussion by asking about the trends they’ve been seeing in the Housing Market Updates and in the market itself. Geoff recalled that the numbers were softening during 2018. Therefore, there was a lot of uncertainty about how the market would be in 2019. However, the numbers seem to be indicating a very good year.
He asked Vikki and Keren what their experiences were in the field. Vikki said that the general market conditions she sees in Orange County, specifically the Warwick, Goshen, Middletown area, indicate a really strong market. There is still a shortage of inventory, which feeds the demand. She has received several new buyers recently coming from outside the area. Plus, many sellers are staying in the area, adding to the number of prospective buyers.
She has noticed more For Sale by Owner signs lately, and has had buyers request to see some of those. Vikki noted that that’s fine; she’s able to show her clients the homes and guide them through the home purchasing process. She then asked if Keren was seeing the same thing in Sussex County and if it’s a new trend. Keren said they are seeing the same thing in New Jersey. With today’s technology, some sellers are thinking they can do it on their own. And as Vikki mentioned, there are no issues approaching a FSBO and arranging a showing for their buyers.
In regard to home prices plummeting in Sussex, Keren said a new wave of REO’s has been released. This hasn’t happened in a while. They’re also being more logical in their pricing. That may be why we’re seeing that drop. In addition, there is that same problem of inventory. Recently Keren had buyer request to see a newly listed home over the weekend. However that home had an accepted offer on it before her clients could see it 4 days later. It’s still a seller’s market.
New Construction
Geoff agreed that there is clearly an inventory shortage. There is real, organic growth in the market. There are many people who can afford a home, and qualify. Yet there are more prospective buyers like this out there than there are suitable homes. In Warwick, in particular, there is a lot of new construction going on. He wondered if around our local counties there is enough new construction yet. He asked what the panelists were seeing. Had they noticed new subdivisions offering more options for their buyers?
Keren said in Sussex, there was Crystal Springs. A large halted construction site there had just been bought up, and there is new things going up. And there are a lot of people interested in them because there is not that much construction around. They also have those houses that have burnt down and had to be totally gutted. Those houses are getting a lot of activity as well.
Vikki is seeing a lot of new construction in the Warwick area specifically, and also in Goshen, Cornwall. She feels it’s a result of the lack of inventory. Geoff noted that he reads a lot of articles from economists, etc. He received an email from a loan company which urged homeowners to become more reasonable in their pricing. There has also been a lot of talk by economists about the importance of municipalities needing to loosen up their zoning requirements and do what they can to speed up municipalities.
Geoff’s response to these? “Welcome to my world!” Planning boards have gotten tighter and tighter and people are concerned about their communities growing too fast. Regulations have gotten tighter, rather than loosening up. And while Geoff doesn’t believe these things are bad, he’s just saying it’s harder to develop in today’s day and age than it was 50, 60 years ago. There’s just a lot more red tape involved.
Geoff said it will be really interesting to see. America is the place to be. Globally, our economy is far outpacing any other country out there. We’re the “shining city on the hill” again and many people want to be here. Also, many people just don’t want to move.
What’s happening with mortgage financing?
Geoff then asked Laura Moritz where we are with mortgages and where she see rates going, Further, he noted there seems there is a lot of loan of money available, and a lot of loan programs. He doesn’t think that’s the problem. Laura responded that she really doesn’t see a problem at all as far as qualified buyers getting financing. Even a few mortgages were done this month for people with credit scores in the 500’s. Underwriting guidelines have really loosened up. Borrowers may also have what’s called in banking compensating factors = their credit is not so great, but they have other factors, Laura is really not seeing any rejections. She also is not seeing houses not appraising for value. The market has been very steady.
Interest rates are very low now. She has locked in and closed some 30 year loans recently at 4-1/4% with 20% down and good credit. With 15 year loans , you’re looking at high 3’s%.
Geoff mentioned that we’ve talked about the appraisal situation often on the housing market updates. He said it was maybe a year or more that it wasn’t so certain that things would appraise and it was difficult. Now that we have in this steadily increasing medium price market appraisers can buy into the fact that this house is worth more than the one down the street because it’s selling six months later and it’s an increasing market. Where it’s hard on appraisers is on the turn, when the market is on its way up or on its way down.
Laura added that some high end properties with “fluff” amenities may not translate to an appraisal. However, ever her high-end appraisals have been coming in on point because they have the comps.
She doesn’t believe that rates will move in either direction very much over the next 6 to 9 months. However, as we know, one catastrophic event or something in the global economy can shift the bond market and it can change on a dime. It does look like rates will hold steady over the summer months.
Laura closed the discussion by noting that it’s a great time to buy a house. She’s seeing a lot of young people and couples trending towards buying a home before getting married in order to skip the renting stage. She loves hearing from them a few years later that they appreciated $70,000 gain and can now buy their forever home. It’s a great time to buy a home in the Northeast. Geoff added that even speaking to average price we’re still really not back to 2006 levels. As much as it’s a seller’s market now, there is still lots of room for growth in price appreciation in our local markets.
May Housing Market Update
The next Housing Market Update will be held on May 21 at 2 p.m. You can stay informed and sign up for Housing Market Updates. Just click here.
January 2019 Housing Market Update
The Green Team’s January 2019 Housing Market Update was held on Facebook Live Tuesday, January 15 at 2 p.m. If were unable to view the webinar live, you can watch it at your convenience here. You can also sign up for future updates at GreenTeamHQ.com/hmu.
This month’s panelists…
Geoffrey Green, President/Broker of Green Team Realty, moderates the monthly webinars. He also presents national statistics, together with local updates for Orange County, NY and Sussex County, NJ. This month he is joined by Carol Buchanan of Green Team New York Realty, Keren Gonen of Green Team New Jersey Realty and Patrick “PJ” Keelin of Family First Funding.
The National Outlook
The above charts are raw numbers – the number of homes that were sold from 2014-2018. It appears that things are softening a bit, but it doesn’t appear that it will be drastic.
The analytic showing inventory levels is important. It has been difficult to find homes for buyers over the last few years. However, it appears that inventory levels may be coming back a bit. Lower demand should yield more inventory, but hopefully what some inventory may do is bring some people back into the game who may have been been frustrated previously.
This survey of experts, market analysts, etc. addressed the question, “What Will Home Prices Do in 2019?” 100 people were surveyed and 94% projected that housing prices on a national basis will continue to appreciate. Geoff aligns himself with that 94%. He believes that in 2019 prices will come up again in spite of the fact that activity went down. Price always lags activity.
According to Geoff, this quote from Goldman Sachs is a good one. “Despite the headwinds facing the housing market going into 2019, we expect U.S. house prices to generally achieve a soft landing. We expect national average price appreciation to remain positive.” If this comes true, it’s music to Geoff’s ears. He lived and worked through the last downturn, where 50% of the number of homes that sold went away within a 2-year period of time once the market starting declining. It was a difficult time
The percentage of Americans who believe homeownership is a good investment continues to increase. The market is at a peak and confidence continues to increase. However, Geoff finds that people tend to buy high and sell low. They should be buying low and selling high. The bottom of the market, 2011, 2012, and 2013 would have been a good time for investment.
However, people are confident that it’s a good time to buy now. And one thing that will never change is that homeownership is a good thing.
January 2019 Local Housing Market Update for Orange and Sussex Counties
Units Sold
Five year look back. The thick green line is 2018 and while it’s been a mixed bag throughout the year, we ended up just a tad bit lower than the past two years.
In Sussex County, Units Sold was also a mixed bag, with one of the lowest totals in almost 4 years.
Average Price
In Orange County, prices were up substantially for a good part of the year. However, there was a cooling-off period towards the end of the year.
Sussex County never saw as much of an appreciation as Orange County did. However, 2018 was still a leading year over the past 5 years.
Asking to Sold Ratio
What price do homes on average sell for versus the last asking price? The higher towards 100% the hotter the market. The numbers have been strong for Orange County throughout the year.
Sussex County was strong in this category throughout the year. However, it hit its highest point in December 2018 with a ratio of 98.50%.
Panel Discussion
Geoff asked Carol Buchanan and Keren Gonen what they think of the market, as it appears a softening is underway. Carol stated that inventory is still low, and January and February are common months for the market to slow down. Carol does believe that 2019 is going to be a very good year. People seem undaunted by higher interest rates. Still a lot of buyers; just not enough homes.
Keren also agrees that 2019 will be a very good year. She thinks that people will start listing homes for sale within the next few months. Right now buyers are looking but there is still not enough inventory. She feels there are sellers sitting on the fence, not sure what to do and just holding out for a few more weeks or months. Geoff commented that the bread and butter of the season is March through August. So it’s natural for many homeowners to wait until March to list their homes.
Talking with Keren regarding foreclosure activity, Geoff asked if she see a decline? Banks are fixing up houses and putting them up at market prices. If the quality of work was good, that would be fine. However banks are bidding jobs out and the resulting work is not necessarily good work. Buyers expect to see good quality and are disappointed with what they’re finding. They often would prefer to pay more for a house that is in good shape. Therefore, many of these homes being sold by the banks are just sitting on the market. Banks are now competing with flippers who, generally speaking, do a better job at fixing up homes than the contractors. Buyers most often prefer paying full price for a home that was “flipped” well than on an REO that was not done well.
Geoff mentioned that this was not the trend in the past. Banks would not fix up their properties and try to sell them for more money. They’d just try to unload them at lower prices and buyers could get a good deal. Over the course of time we’ll see if banks decide to go back to the way they used to handle foreclosures.
Regarding the financing environment, Geoff asked Patrick “PJ” Keelin what we’re looking at for 2019. As Geoff put it, at the end of the day we’re really in the land of the banks, dependent on what they’re willing to do. And how many times the Federal government is willing to let banks leverage their money. PJ indicated that on a global scale, at the end of the year there was talk of the Feds raising the interest rate. That usually indicates a stronger economy; stronger aspects coming from the financing angle and mortgage-backed securities, etc. Unfortunately, at the end of the year there was a huge difference and the Dow dropped significantly. The drop in the Dow affected reports of things they were coming out with. So trends and thoughts of increased interest rates by the end of the year through that New Year boom fizzled out. There are reports that there is potentially going to be a decrease in interest rate for the year 2019. PJ believes that is something being put out there for a little bit of hope.
However, the biggest thing we’re competing with is the lack of inventory and what people will be able to purchase. Looking at an average household income of $60,000 to $70,000, that probably puts a person on average of what they can afford in terms of a property at $1,500 to $1,600 range. That gives them a certain price point that they have to stay in, and with increases in interest rates that is going to affect their eligibility to be able to purchase properties within a certain price range.
Geoff stated that all signs point to Fed raising interest rates. He asked PJ if he thinks that won’t be the case in 2019. PJ replied that there will be a lot less than they were expecting in 2018. They may skip the first interest rate rise. Hopes on the industry side are that there will be a potential interest rate drop. That may push that boom for people who are still sitting on the edge. He sees a stronger trend with the amount of people who are actually motivated in purchasing. They may finally be believing the reports that interest rates are not going to stay historically low and will go up. So many reports are going in different directions that it’s unsure what to make of it. Industry leaders are saying the market is staying relatively steady, but be prepared. There could be a drastic change.
Right the now trend is slow and steady. PJ commented that Geoff is proactive in all that he does; communicating with his sales associates and with the lenders they work with. Because ultimately these transactions need to happen quickly in order for them happen. When they remain open, bigger changes are coming.
Geoff wrapped up, saying that at the end of the day, interest rates are impacted by bond markets. As long as there is no major economic collapse, the housing market should be fine. He predicts a good 2019. PJ agrees, that it will be a good, strong year. People are getting more motivated.
Join us for the next Market Update
The next Housing Market Update will be held on Tuesday, February 12 at 2 p.m., when the Green Team will again be going live on Facebook. Sign up for updates at Greenteamhq.com/hmu.