The time has come for some home sellers to raise their prices. And it’s time for others to lower theirs
I’ve been hearing a lot of chatter out there from realtors, proclaiming how great the market is in the luxury side, and I knew from my research that I wasn’t quite seeing that. So I decided to check out the numbers once again to see what the real facts are.
This is what I found for luxury sales:
- Luxury home sales…$2 million +…is down 22% in 2013
- It’s really yucky, in that only 14 homes have sold thus far in this price range. 18 homes sold in Bergen County for the same time period in 2012
A 22% sales decline on already anemic sales volume isn’t considered a great market. In fact it borders on a market condition that sucks.
Here we are soooo close to the hyper active market in Manhattan and the borough’s, yet the Bergen County suburbs is on life support. We’ll talk about why this is happening in future post, but for now let’s just say that it’s bothersome at best.
As for the market below $2 million…it’s a different world…night and day:
- For overall homes priced up to $2 million the number of sales have increased by 14%. That’s a huge number!
- Homes priced to $499k…home sales increased 9%
- Homes priced between $500k-$999k…sales increased by 26%
- For homes priced $1.om-$1,999M…home sales increased by 31 %
Tell me that this isn’t great news!!!
So…if your home is for sale in this price …it’s time to raise your price!
Go for it!
For the first time in a long time, sales of homes priced from $500k-999k outsold homes priced below $500k. But from what I can see, this is due to a lack of inventory of homes for sale below $500k…so people have to gravitate to higher priced homes if they want to live in Bergen County
It’s time for the realtors to see the light and start raising sales prices.
In the past they have used negative sales data as scare tactics to deflate prices, but now they have the ammunition to increase prices.
If raising prices creates less sales, then that’s fine, because higher prices leads to higher values, and higher appraisals….and given the complaint that appraisers are low with their value estimates, this will help to end that practice.
- dramatic increases in sales volume means there’s more demand
- more demand means more sales
- more sales means…the market is improving and people are more confident to make a big purchase
- Low inventory means more competition, and more competition brings higher price
And best of all…price increases creates confidence in the market.
If prices don’t start increasing then why would anyone want to risk their money with such an investment. At that point you’d be better off putting tou money into the stock market.
Eating Real Estate 
You are living in a bubble dude. Home prices should be proportional to living wages. Average home income in Bergen County is 75K, how can this family afford a 500K home? High income professionals like doctors, investors make only a small percentage of the population and they buy homes in good school districts. Bergen County has good schools, but not the top in the State. I guess you think everyone is a doctor or an investment banker.
Great comment John, and one that I could spend hours discussing with you. And believe me, I agree with your point. Housing affordability is something that is rarely talked about in Bergen County, and it’s one of the prime examples why New Jersey desperately needs to continue pushing the Mt. Laurel program, and why towns need to reevaluate their zoning, so they can attract new residents and keep their existing ones from relocating to other states.
I agree with you that home prices in our area are insanely high compared to where they need to be so that everyone who wants to live in New Jersey can afford to do so. But we’re not remotely close to this happening.
To your point, we can’t create affordable housing by decreasing the value of our existing homes. We need those homes to keep and increase in value. That’s the foundation for a solid housing market and economy. We can only create affordable housing, which every town in northern New Jersey so desperately needs, through smart zoning…but that won’t happen anytime soon because of politics.
We are in one weird market, and in a region where the average family os single person isn’t able to find affordable quality housing as a norm.
Though I make the case as to why most home sellers should raise their prices, this has nothing to do with housing affordability. The fact is, home sales and sales prices have increased, and have even bounced back in some cases to their highs leading up to the crash. Is this a good thing…I don’t know. This is a product of the market-place…we can’t control consumers.
However we can control zoning and new development to create much needed affordable housing. But again, politicians don’t know how to deal with this.
Is a high flying market a good thing for us? No. It wasn’t good when the economy was soaring and prices climbed to all time highs…and employment was flying high. And it’s not good now, as the economy is still limping along.
But prices are up, and demand is high..in many areas…so why shouldn’t sellers take advantage of the situation.
Will home prices will continue to rise…yes
Will demand continue…yes
Will rentals continue to be strong…yes
Will New Jersey become more affordable…no
Will more affordable homes be built…yes…and it’s happening now
Do we need more affordable housing…YES
I know how confusing this is, and I don’t admit to understanding all of it…and no one else does either.
What we all have to do is look at each component of the market as a separate entity, because you can’t talk about affordable housing in the context of existing homes. That needs to be separated so that you can look at creating new housing and making it affordable.
This is a huge topic that every major developer is dealing with when they plan new communities. Our old way of living, working and commuting isn’t what it used to be…so where we live and how we live is is an outdated concept. And it needs to be changed.
John, you really picked a mind boggling topic, that we could write a book about. So keep the conversation going, both here and with you local and State politicians. A solution is a key to our future success.
We need more voices like yours!
Also, percentages are misleading…what is a 26% increase??? if four 1MM homes were sold over 2012, it simply takes the sale of one more 1MM home in 2013 (5 in total) for sales to increase 25%…this is sad, very sad. The reality is that only a hand full of homes have been sold over the past year in townships like Lyndhurst, North Bergen, Rutherford…people simply don’t make enough money. It not a question of market value is a question of arithmetic…
Once again you are correct. Numbers and percentages are misleading…and that’s why I presented both on this post. And I usually do that in all of my posts.
Realtors have a way of misleading the public, which harms all of us, and that’s why I go to great lengths to present all of the information.
Yes, when 1 home was sold last year, and now 2 homes are sold…a 50% increase…it real is meaningless and misleading to use a percentage because it looks great. But if it was “your” home that was sold, it then becomes a very big deal.
To make your point, check out my posts on Alpine. This is the case where sales are up, but at the same time the market in Alpine still sucks.
Just so you know…I break down my numbers by price point…rather than combining everything. This way, people can see exactly where the market is at their particular price. This is the most honest and accurate way of analyzing the data. You can’t skew the numbers one way or another, if all of the facts are presented.
This is something you won’t find anywhere else
You have some great observations. Thanks