March 2023 Newsletter

Happy March!

February flew by and as the weather warms up, the housing market is doing the same.... 

WHY LISTING PRICES ARE USELESS FOR BUYERS BUT VITAL FOR SELLERS

How Understanding Absorption Rates and 2022 home sales will help buyers win offers and sellers to “right price” their homes in 2023

How is the market? Real estate agents can’t escape this question, not from our family, friends, and of course, clients. What you should be asking is: “What's the absorption rate?". It sounds so “real-estatey”; a term you would only use if you were a tik-tok flip-bro. But it’s a critical term for buyers and sellers to understand – especially if you are considering buying or selling in the near or medium term.
 
Absorption rate refers to the rate at which available properties are sold in a specific area (town) over a specific time (30 days). Essentially, it is the number of months it would take for all the available properties to be sold if no new properties were to come on the market. A lower absorption rate (<5 months) indicates that properties are selling quickly and there is a strong demand for housing in the area, while a higher absorption (>5 months) rate suggests that properties are sitting on the market for longer and buyers have more power.

How Absorption Effects Housing Value
 
As the absorption months fluctuates, the cost of property rises and falls. Using the chart below, for example if your town has an absorption rate of 2 months, that means the cost of property increases by 1.3% a month. That’s critical information!

Current Essex County Absorption Rates
 
Before the pandemic, Essex county properties were around 3 months absorption rate and in need of inventory. The pandemic increased demand for single family homes so sellers who were considering moving in the near future rushed their homes to market to capitalize on the demand. This briefly increased inventory but reduced future supply. This is our current market situation.
 
Recently, Montclair has been hovering in the 1 month range, as have the many of the surrounding towns (Glen Ridge, Verona, Maplewood, South Orange). The rates on the chart below are from the past 90 days, a typically low inventory season, however, when I expanded the time frame to 12 months, the absorption rate was similar.

2022 SFH Home Sale Summary
 
Use this chart to inform you for this year’s housing market. Home prices in Northern NJ are still on the upswing. And remember the Glen Ridge and Montclair. unique underpricing strategy it is visually apparent in the percent of list price.

Steps to a winning offer

Ignore the list price. It's a marketing tool.
Understand the past year’s local sales market (see chart above).
Check the local absorption rate.
Understand the current market by asking me for the most recent comps. Prices are changing on a weekly basis.

Pricing Your Property For Success

Sellers want to attract multiple buyers for healthy competition, but you also want a smooth offer process resulting in compelling bids for your home. Knowing the previous year’s home sales and understanding the current absorption variable rate will guide you on where your homes value is. 
 
Once we settle on the target price, we want to be sure that we attract as many buyers as possible, so we strategically price the house to expand the buyer pool. We want everyone in there: the overreachers, the bargain buyers, the over spenders, and most importantly, the savvy and qualified buyers who did their homework. The more interest the better! 
 
Essentially, you want competition, and pricing your house within range but just below its value will simultaneously expand the interest pool while securing qualified offers. I find this method gives my sellers the least stressful experience with the best offer results.

Local Happenings

Vanessa German at Montclair Art Museum

See Vanessa German's "..please imagine all the things I cannot say.." exhibit at the Montclair Art Museum. Previous to MAM, German has been featured at Museum of Contemporary Art Chicago, the Wadsworth Athenaeum and New York City's Kasmin Gallery. Her dramatic sculptures and large format installations created from found objects are thought provoking and engrossing. Don't forget to tour the rest of the museum's distinguished collection of contemporary art from George Inness to Louise Nevelson.

Lifestyle Tips and Tricks

Trend Watch 2023: What's Hot for Homes

Comfortcore, color, contrast, and more: quick hits on today's top interior styles to watch from an Atlanta-based staging professional.

Courtesy of National Association of Realtors

Featured Listings

I will have several listings coming on in the coming months. The following properties are currently exclusives but will hit the public market soon They include:
 
5 BR, 3.2 BTH SFH in Montclair's beloved Watchung Plaza Neighborhood. A stones throw from the Manhattan direct train, all new mechanicals, a temperature controlled wine cellar, a finished studio above the 2 car garage and .5 acres of land, this is a rare opportunity.
4 BR 1.1 BTH SFH in Bloomfield just across the Glen Ridge border. This property has almost a half an acre of land and is walking distance from the Glen Ridge Train. An amazing opportunity to make this a down-sizer playground!
4 BR, 3.2 BTH 2-unit Multi-family in downtown Montclair that can be converted to s SFH 
 
If you are interested in any of these properties, please reach out to me directly for pricing and details.

SOLD!

SOLD! Downsizing isn’t easy but listening and working closely with buyers, we are sure to find solutions. For my clients, we searched for a property where they were not sacrificing comfort for convenience. After a year of renting and banking the money they made from selling their property, we found a spectacular condo in the Vizkaya West Orange that had many features that reminded them of their former estate-style home AND had added amenities and services! It was like their home but in a full-service condo version. From floor-to-ceiling windows and mountain views to cozy family rooms with fireplaces, this place really had it all.

Thanks for reading and subscribing! Ready to achieve your next real estate goal?

Reach out to chat!

Meredith Bergmann
 
Sales Associate
M: 917.355.4074
O: 973.310.7360
MeredithBergmannHomes.com
[email protected]

Office: 973-310-7360

Compass RE is a licensed real estate broker. All material is intended for informational purposes only and is compiled from sources deemed reliable but is subject to errors, omissions, changes in price, condition, sale, or withdrawal without notice. No statement is made as to the accuracy of any description or measurements (including square footage). This is not intended to solicit property already listed. No financial or legal advice provided. Equal Housing Opportunity. Photos may be virtually staged or digitally enhanced and may not reflect actual property conditions.