At various Town Council meetings over the last year, members of the audience have implored the Council to do something about Verona’s taxes, which, in their view, were driving many people to sell their homes here. “Look at all the houses for sale,” one commenter bemoaned recently. “There have never been this many.”
Yes, there are a lot of houses on the market now and few of us would refuse a lower tax bill. Some of us are sitting in houses that are not worth as much as when we bought them. But to understand the true state of real estate in Verona now, you have to dig into listing trends for the last few years. You also have to consider that many factors drive listing levels, and unless we interview each seller, we won’t be able to distinguish who wanted to sell from who needed to sell.
At the end of March 2011, there were 127 active listings of single family houses in Verona, of which 35 were new. Traditionally, March is the beginning of the spring sales season in the real estate market, the time when people list their old houses so that they can be settled into a new house by the start of the school year in September. In April 2010, there were 123 listings, 36 of which were new. The statistics on houses under contract and sales closed was also fairly comparable: 19 houses under contract in March 2011 and 6 closed versus 20 under contract and 13 sold in April 2010.
The listing numbers for 2011 and 2010 are quite a bit higher than those for 2009 and 2008. In April 2009, there were just 73 active listings (34 of which were new), while in April 2008, there were just 47 active listings (30 new). But that doesn’t necessarily mean that Verona’s real estate market is in dire straits now. In 2008 and 2009, home prices were dropping so fast and the market was so uncertain that many potential sellers kept their homes off the market, fearing a rout. The Dow Jones Industrial Average bottomed out at 6626.94 on March 6, 2009 as New Jersey’s unemployment rate skyrocketed to 9.8% for July 2009 from 3.9% for October 2007. The interest rate on a 30-year fixed-rate mortgage was nearly 6.75% in the middle of 2008.
The Dow closed yesterday at 12695.92. Unemployment is still stubbornly high in New Jersey (a new Rutgers University study predicts that employment in New Jersey won’t return to its pre-recession levels until 2016) but home prices have stabilized and the interest rate on a 30-year fixed-rate mortgage is now about 4.47%. In short, pretty favorable conditions for people to list houses that they had been holding off the market, even if they have to list them at prices much closer to their assessed value than they would have in the past.
“We had a very good April and May looks good,” says Leonard Shriber, the broker/manager of the Prudential New Jersey Properties office in Verona. “We are turning inventory at about the same rate we have been for a year or so.” Shriber notes that he is again seeing multiple offers on some properties, though they are not pushing prices they way they did before the recession. “These are houses that are totally move-in ready and appropriately priced,” he adds. “People are buying the houses that are ready to move in to.”
Here’s some of what’s on the market in Verona now.
Virginia- do we have April’11 numbers? Is the trend continuing?
So, if my math is correct-
There were 3% more homes listed/new March ’11 over April ’10 but
35% fewer homes sold/under contract in March ’11 over April ’10.
Susan, your math is correct, but it could lead you to see a correlation that isn’t. Dividing listings by sales produces a percentage, but not a statistic that really indicates the state of the market. Active listings can be active for months: There are houses listed now that were on the listings last year at this time. Contracts and closings are far longer processes now than they ever used to be, for reasons that have more to do with global financial markets than Verona’s finances. And a market with a large number of listings is not necessarily a market in trouble. In the late 1960s, when my dad started in real estate and when Verona houses went for $20,000-$30,000, many of the agents in Verona regularly earned recognition as Million-Dollar salespeople. People wanted to buy here and trade up here.
As a country, we developed expectations of real estate in the wake of the Dot-Com bubble that weren’t logical or realistic. Our real estate market now reflects the implosion of those expectations and is an unwelcome reminder that real estate can be a very illiquid asset, often when we need it most.