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New York Buyers Buoy Montclair Housing Market

Realtors expect the market to continue picking up throughout the coming year.

 

Montclair's housing market continues to pick up, fueled by growing interest from New York City buyers, according to local real estate agents.

"We saw a resurgence of Manhattan and Brooklyn buyers this past spring and that should continue in the fall though we likely worked through some of the pent-up demand among buyers awaiting the bottoming out of the market," said Richard Stanton, owner of

One trend that continues, he noted, is that buyers are willing to pay top dollar only for those homes that are move-in ready.

"In addition, the walk-to factor also remains a strong selling point and we are fortuante to have six main 'village' areas—Upper Montclair, Watchung, Walnut and Grove, downtown, Frog Hollow, and the South End," he added.

As of Aug. 31, there were 147 homes on the market in Montclair versus 243 at the same time last year, according to the Garden State Multiple Listing Service.

"We have to go back to February 2006 to see such a low number of houses for sale," Stanton said. "August sales activity was down just a bit from July but that was to be expected.

"There were still some eager buyers and on Aubrey Road went under contract its first week on the market," he said.

In total, 26 houses went under contract—and there were 57 closings—in August. The median sales price was $575,000. In August 2011, there were 39 closings with a median price of $690,000.

"Fall markets are hard to predict, but I will venture to say that it will be much improved over last year, while not as active as this past spring," Stanton said. "This is due to normal seasonal patterns and having already worked through some pent-up demand."  

Roberta Baldwin, a partner at the New Keller Williams NJ Metro Group, agreed that the New York City-Brooklyn contingent is returning to Montclair.

"Over the last several years of their relative absence, many local sellers couldn't believe they were gone," she said. "'Where are the New York buyers?' was a question I heard often from disappointed homeowners who felt personally afronted by the disappearance of this important group.

"Were it not for the move-up Montclair buyers and relocations from other major U.S. cities and abroad, things would have been even worse," she said.

But Baldwin reported that she's sold several homes in 2012 to a re-invigorated New York City-Brooklyn contingent as well as to a Hoboken-Jersey City group who had to live through the huge dive in Hudson County fortunes before moving on to Essex County.

"Many from both sectors admit that they contemplated buying here years ago, but nested instead in apartments until their (now often multiple) offspring grew to school age," she said. "This fall and next year I believe a similar buyer energy will emanate from the five boroughs and from New Jersey's Gold Coast.

"So, yes, I have a positive feeling about what's to come for our local housing market," Baldwin said. "Now, mind you, New Jersey real estate as a whole is still digging out of the doldrums, so Montclair sellers must realize this NYC-Brooklyn buyer push alone isn't going to bring us back to the heady days before 2008.

"That will be a process through time that has to do as much with home condition and location, as well as general consumer confidence, Montclair's public school standing, municipal health, taxes, and other important factors that play into why people choose to live where they do," she concluded. "We do have a great NYC commute, which for many is paramount. That heaven for that."

Jason DeSalvo September 07, 2012 at 10:35 AM
Shelley, was the roughly 17% drop in median price in August 2012 compared to 2011 due to actual price depreciation or was it because the mix of what was being sold was materially different?
W J Ferdon September 07, 2012 at 12:18 PM
The upturn in sales is due to Mr Stanton's support and adds on WFUV. Good move, good groove!
Richard Stanton September 07, 2012 at 04:50 PM
Jason, that was due largely to the mix of houses. 37% of the houses closed in Aug 2012 were 5+ bedroom versus 56% in Aug 2011 WJ, thanks for noticing! like us on facebook for a chance to win Jayhawk tix 9/14 at the Wellmont facebook.com/stantoncompanyrealtors
tryintosurvive September 08, 2012 at 02:59 AM
You gotta love realtors. They are such an optimistic bunch and they are great at spin. They will never admit that things were really bad a year ago (they call it a soft market to make it seem less harsh). Now they are only bad. I would welcome them coming out and being honest by saying that property values in Montclair have declined 15-20% within the last year or so. That seems to be the case, and it has nothing to do with the reassessment. I am not sure how other towns have fared, but that seems to be the case here.
Cary Africk September 08, 2012 at 03:43 AM
Realtors do not earn a living by being pessimistic. I surely would want a realtor who was excited about Montclair! If one is looking for analysis, perhaps there are analysts who can help. The data is certainly there. When I was on the Council I paid for, out of my own pocket, a subscription to Otteau which detailed sales and sales history. The firm also did analyses. My own impression is that house prices have firmed up, but there has been a drop in prices. And many of the higher end homes have seen their taxes go up due to the new assessment which I think did not get the analysis by the town that it should have. Higher taxes on higher valued properties will exert downward pressure on the price, obviously.
jim September 09, 2012 at 01:16 PM
Cary, List your house for research purposes. See how optimistic you are when your Realtor is done with your initial walk through.
Cary Africk September 09, 2012 at 01:28 PM
jim, Realtors are optimistic to BUYERS, people looking to move into Montclair. To sellers, I would imagine that they advise them to be "realistic." Many homes, in this market, are looking at numbers almost half those of the top of the market several years ago. Folks who thought that when they sold the equity would carry them through retirement.
Ron Mullen September 09, 2012 at 02:57 PM
Its great that realtors are optimistic but they should do somehing more tangible to increase their sales. Like "pressure" the new town council to reduce the property tax burden now , not ten years from now.
Richard Stanton September 09, 2012 at 04:34 PM
Here are some “not so rosy” newsletter posts from the past: March 2010- "Website traffic was off almost 25% in March year over year. Still, as spring has arrived, buyers are wary and fickle. There was an increase in purchases in the first 2 weeks of April as 16 houses went under contract, which was met by an increase in sellers with 35 new listings coming on in the same period. Don't like statistics and want specific examples? How about 7 S Mountain Ter bought 10/2/06 for $1,750k and sold 3/19/11 for $1,050k, or 117 Clarewill just reduced to $1,549k after selling 7/31/06 for $1,800k (update- reduced to $1,450k and unsold), or 127 Llewellyn now in att review with an ask of $989k versus a 8/20/05 purchase price of $1,325k (update- sold for $970k)." Dec 2011- “That should bode well for existing home sellers unless buyers continue to dig in their heels, waiting for the perfect house. Projected flat interest rates and prices aren’t going to motivate them.” Jan 2012- “Prices have come more in line with income levels and herein lies the problem- flat income levels over the past few years. For all the hype over employment figures, which fail to capture underemployment, the only stats that matter to housing (or in my opinion the broader economy) is income. Combined flat income and lower household debt make for a weak real estate market.” One can sign up for my newsletter here: http://visitor.r20.constantcontact.com/d.jsp?llr=g787avfab&p=oi&m=1105585926022
Richard Stanton September 09, 2012 at 04:37 PM
Cary, my impression is that, on average, homes at the very high end (1.5 million+) fared slightly better as there were some real white elephants grossly over assessed. I’m trying to get the data in excel to figure it out. In any case, higher taxes will indeed put downward pressure on prices, as will a rise in interest rates. Let’s say the typical house is $600,000, with taxes of $19,518 (scary, I know). A 10% increase in taxes would be $1952 or $163/ month less a buyer can budget toward a house payment. If you pull that out of your mortgage budget (4%, 30yr), the house you can afford is $34,068 lower (about 6%). If on the other hand, rates increase to 5% from 4%, the house you can afford drops approx. $75k. The probability of a tax increase of 10% is much more likely than a 25% jump in interest rates. We don’t exist in isolation though and we are in competition with other places to live. We have already seen an exodus of people (and not just empty nesters), to other parts of the country; notably Texas, Florida and North Carolina. A moratorium on tax increases would go a long way to making us a more attractive option for buyers, not to mention affordable for its current residents who, like the proverbial frog, don't notice the heat gradually being turned up until they are dead. I'll save what the cost of higher education is doing to net worth of empty nesters and college graduates and how it's going to come back to haunt real estate.
Richard Stanton September 09, 2012 at 04:39 PM
My grandfather was probably accused of “spinning” recovery in the late 30’s and my father in the late 70’s. Cary, you are right, ideally we would get sellers to think the market is terrible and buyers to think that values will jump sharply in the near future. I haven’t been able to figure out how to do both in public forums, so I have resigned myself to dealing in facts and some guarded market predictions, which, as luck would have it, has been pretty well received by clients that pay us for market knowledge and expertise. Tryintosurvive- 2010 was a terrible year- the slowest in memory (and we have a 90 year history). Prices last year were down 15-25% from highs circa 2007. However, prices this past spring were definitely improved over last year. Witness one home that we sold in August 2011 for $805k, then again this past June for $880 with 5 offers (after no major improvements). In the end, houses are just places to live. If one could time the market, you'd be able to retire in short order. I'd venture that a homeowner who has been here for 10-15 years has seen about a 4% annual return on their purchase.
Cary Africk September 10, 2012 at 12:17 AM
Richard, I am not accusing you, or any other Realtor, of anything. I am saying two things: 1. I would expect a Realtor that I listed my property with to represent my property and the town in as good a light as possible to any potential buyer I would expect them to speak of all the many good aspects of our town, our schools, and our people. I would expect them to show all the positive aspects of my home, of which there are many. 2. I would expect a Realtor, to advise me, the seller, of the realistic price range I could expect to achieve. I would not want to turn away offers thinking that my property was worth much more.
Richard Stanton September 10, 2012 at 01:12 AM
Cary, no need to explain. I didn't consrue your comments that way at all. PS I have 2 buyers lined up for your house. ;)

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