Location is everything when it comes to real estate. And nothing shows this more than the article in this Sunday’s New York Times titled…Billionaires’ Club Is Set To Grow…The demand for high-end homes is also expected to rise.
“The buying seems to draw traction from the fact that there will be so many more newly minted rich people hunting for properties. Over the next 10 years, some 95,000 more people around the world are expected to see their wealth grow to at least $30 million, according to a forecast by Knight Frank, a London-based real estate company, which puts the current number of such people at 189,835.”
The article ties in an expected worldwide explosion of billionaires, to an already exploding ultra-luxury residential market in key cities, like New York City.
With what is happening in NYC and other major cities, translate into the same trend for the Bergen County, New Jersey market, which is (used to be) tightly intertwined with what goes on in New York City? Do the mega home sales that we’ve all heard about happening in Manhattan spill over into our market, as it used to. Or are these sales, and the overall strength of the NYC residential market taking away sales from the neighboring suburbs, and hindering our recovery.
Their assumptions may be true for specific locations like Manhattan…but it’s not the case in Bergen County, New Jersey, where the number of luxury home sales, are down 60% from the peak, and the dollar volume has seen a 67% hit.
The numbers show that luxury home sales and ultra-luxury home sales are being clobbered in Bergen County. And I would be willing to bet that some of this is attributed to the boom that’s happening in the city on the other side of the Hudson.
There are 94 luxury homes for sale in Bergen County (priced above $3 million):
- 21 luxury homes are for sale in in Alpine
- 12 are in Cresskill
- 9…Franklin Lakes
- 22 are located in Saddle River
- 7 in Tenafly
- The remainder are scattered throughout other towns in Bergen County
The Scary Part:
- 94 homes for sale priced above $3 million
- In 2012 only 25 homes were sold in this price range
- Sales in 2012 decreased by 23% from 2011
- From the peak year of luxury home sales in 2006 compared to 2012, sales of luxury homes decreased by a whopping 60%
- The dollar volume of sales at the peak compared to 2012 decreased by 67%
And there’s no end in sight to this downturn. The demographics are working against the high-end market, and high taxes. And the ego to purchase one of these suburban monsters isn’t there in the volume that’s needed to turn things around.
- In 2012 the most expensive home sale in Bergen County was a $20 million home located in Alpine…a 40% discount from the asking price
- The next most expensive home sale in Saddle Rive was $6,000,000. This home was for sale since 2005 and was listed in 2010 at $9,250,000. It finally sold at a 35% discount…and this was a fairly new home in an incredible subdivision.
The most interesting fact with luxury home sales in Bergen County is that out of the 25 homes that were sold above $3 million, only 1 home was sold to a foreign buyer outside of the United States, and only 5 homes were sold to people outside of New Jersey, and 4 of those were from New York. So much for all the talk about international buyers purchasing homes in our backyard. Yes, real estate is local!
“In the end, the global luxury property market is functioning in its own universe, seemingly removed from general real estate trends. It “remains relatively impervious to these trends and more closely follows the luxury goods market,” Christie’s International Real Estate said in a study released this week.”
Christie’s International…you missed what’s really happening in northern New Jersey…but why let the facts get in the way of hyping the market. And don’t think that what is happening in Alpine, New Jersey is irrelevant, because for the past bunch of years, Alpine has been one of the most expensive zip codes in the Country.
National stats and reports, have noting to do with what’s really happening right in your own back yard
Remember, real estate is local!