2010 Market Report Confirms Importance of Hyperlocal Market Analysis
Sales of single-family (fee simple) homes in the nine West Essex towns of Caldwell, West Caldwell, North Caldwell, Essex Fells, Roseland, Verona, Cedar Grove, Fairfield, and Montclair fell 13 percent between 2009 and 2010.
Essex Fells experienced the sharpest sales decline (-45%); while Fairfield dropped 39%; Verona, 27%; and North Caldwell, 19%. The gainers were Caldwell (+14%) and West Caldwell (+3%).
In commenting on 2010 sales, Brian McCabe, north Jersey Realtor and developer of hyperlocal market analysis, which was used to prepare the 2010 Market Report, notes that numbers like these contribute to the belief that houses are difficult to sell. Yet, he said, they tell only part of the story. "Markets do not move uniformly up or down. There are big differences between towns and between price points within towns. Hyperlocal market analysis identifies those differences, and they tell a very different story."
For example, from 2007 to 2010 median home prices in all nine West Essex towns declined, however the amount of decline varied greatly from town to town: Verona and Roseland pretty much held their own, losing only 3 percent and 4 percent, respectively, while Essex Fells' median home value lost 25 percent. On the other hand, from 2009 to 2010 six of the nine West Essex towns posted gains in their median home values. The biggest gainer was Essex Fells (+34%) followed by Verona (+8%), Caldwell (+6%) and Montclair (+5).
Another market measure is how quickly buyers go under contract to purchase a home. When looking at all West Essex sales, 57% of the homes sold in 2010 went under contract in two months or less. When hyperlocal market analysis dug deeper into the numbers, it was found that 72% of Verona's sales went under contract in two months or less. Montclair came in at 68%; West Caldwell, 64%; and Cedar Grove, 61%. For those buyers, the shopping was over and they were ready to pull the trigger on deals.
So, while overall sales might have dropped, median home prices rose, and the houses that sold did so quickly. "That's a big difference from the common perception of what this market is about," notes McCabe, "and an even bigger difference emerged when hyperlocal market analysis looked at price points."
Every town has both weak and strong price points. A strong price point is one where the likelihood of a listing being sold…rather than expiring or remaining active…is high. An example of strongest price point information follows, and it answers this question: What would have happened to a house in Montclair that was fairly valued between $600,000 - $650,000 if it had been listed for sale in 2010?
Town Montclair Price Point $600,000 - $650,000 Listings in Price Point 25 Sales in Price Point 21
Strongest price point information for each West Essex town, plus more information about hyperlocal market analysis, can be found at www.wessex-homes.com.
Company: Coldwell Banker Residential Brokerage
Phone: 973-865-1863
Email: bmccabe362 at wessex-homes dot com
