The Real Estate Market in Bergen County, NJ

Market Research by Barbara Weismann
August, 2010

As a whole, Bergen County has performed very well indeed in 2010 – sales are up 17% and it is taking less time to get to the closing table. While the big unknown is the effect of the tax credit, indications are that this positive trend will continue on throughout the year and into 2011.

You’ll find below market trend updates for several towns; if you don’t find what you’re looking for, just email me and I’ll send you the locations you want. There just isn’t enough room to have all 70 Bergen County locations. The data source for this is the NJMLS.

Alpine
The high end luxury home market in Alpine began to suffer in 2007. That year the number of sales in Alpine declined by 29%. By the time the financial crisis was fully apparent in 2008, credit for almost everything had dried up in the late summer and fall. Financing at the luxury level went from zero down to as little as 5-10% down to 45-55% down. That by itself halted the market.

However, so far in 2010 Alpine homes are making a decided come back in the market. As of August 1st, we have had 6 Alpine home sales with another 3 Under Contract and 3 more in Attorney Review. This is a significant step forward as in 2009 through July only 3 Alpine homes had sold.

Average sales prices are lower because fewer homes over $5 million have changed hands in Alpine; the bulk of sales are under this figure. However, that too is improving and I expect the year to end with more homes selling over $5 million in Alpine than we saw last year.

Cresskill
Cresskill cannot be discussed without noting its luxury home market. On the East Hill are Rio Vista, The Esplanade, Tammy Brook Hills and Tamcrest Estates. As is the case elsewhere in Bergen County, unreasonable jumbo mortgage demands (around 50% down payments) devastated luxury homes. In 2010 this market has begun to show life. At this point in the year there were no high end Cresskill homes sold last year; this year we have 2 sales which equals 2008 although still far from 6 in 2007. Still it’s improving and we’re had more client calls to preview homes.

The bulk of Cresskill homes are under the luxury level and here too we see improvement. Cresskill home sales in this market range are up by 31% this year. As of the start of August, 9 more are Under Contract and 1 is in Attorney Review.

Dumont
A town where community spirit is so strong that it’s not unusual to see multiple generations of the same family living here, the strength of the Dumont home market is more than solid because so much of that demand comes from Dumont itself. In 2010, however, Dumont homes also benefitted from the tax credit program because the average sales price for a Dumont home is a very affordable $329,851. Sales through July 31st were up by 14% with a nearly even sales price from the year before. While other towns had a great disparity in how long it took a home to sell, Dumont only needed about one extra week in 2010. Dumont homes also have had multiple offers and bidding wars this year. As always the market for a Dumont home is strong.

Englewood
Englewood has long been known for magnificent estates on it’s East Hill but these Englewood homes have been having a very difficult time of it for several reasons. Well populated with major figures in the financial industry and Fortune 500 companies, as Wall Street began to contract around 2007 so did this market. Additionally the stringent demands of luxury home financing have had devastating effects on these luxury Englewood homes as they have had elsewhere. Add in some of the highest property taxes in the area and you have a perfect storm. As a result there have been few sales although we are ahead of where we were at this point in 2009.

For the bulk of Englewood homes, however, the story is one of decided improvement. Sales are up by 9% and it’s taking less time this year to get to the closing table. The average sales price is up too; more homes at higher pricing are selling in 2010. As of August 1st the ratio of Englewood homes For Sale vs. those Under Contract is 4.4 to 1 in the non luxury market. The rule of thumb is that under 5 to 1 is positive.

Old Tappan
The market for Old Tappan homes so far this year has been good but as a luxury home location, it has had a few rocky points. Luxury homes have suffered universally due to mortgage requirements which went from allowing zero down multi-million dollar home sales to requiring half of the purchase price in cash. Not only did this have a disastrous effect in 2008 and 2009 but new construction financing also stopped and many Old Tappan home sales at the luxury level are new construction. The net effect of this was to virtually put a halt to the high end Old Tappan home market in 2008 and 2009. Today, however, you are beginning to see a return of this market.

For the rest of the Old Tappan market through July 31st it’s been a very good year. Through July 31st for the same period last year, sales are up a whopping 39% and the time it takes to get to closing is down by 17%. This is a tremendous improvement over 2009. Because Old Tappan homes are above the First Time Home Buyer Tax Credit market range, we can only expect this positive trend to continue.

River Vale
River Vale homes have been moving this year in fits and starts. Through July sales are up 11% which is not quite as strong as the other Pascack Valley towns and correspondingly it’s taking longer this year to get to closing as the fall through rate has been significant. Pricing has been trending lower too. At the same time River Vale homes have been reducing to where the market is and so the future actually looks much brighter.

As of August 1st the ratio of River Vale homes For Sale vs. Under Contract is an excellent 3.16 to 1. When this ratio is under 5 to 1, things are positive. River Vale home sales should continue this trend because with both median and average sales pricing at over $600,000 the influence on the River Vale home market from the tax credit could only be slight.

Tenafly
Tenafly home sales improved dramatically in 2010 – up by 18% through July 31st for the same time period last year and dollar volume rose by 17%. However pricing was virtually flat – down by 1% which showed the effect of the tax buyer credit as more lower priced Tenafly homes sold. Lately there has been a buildup in inventory as some homeowners have mistook this activity as a signal that pricing will increase – consumer demand in 2010 will not translate into higher pricing. As a result, homes are beginning to stay on the market longer but this will work itself out.

At the same time, the Tenafly East Hill is experiencing a resurgence of luxury new construction. The demand for a new high end Tenafly home has resisted the economic collapse, high down payment jumbo financing demands and the near extinction of new construction financing. New luxury home projects are seen throughout the East Hill. While many are ordered homes, some are speculative ventures too.

Westwood
One of the most sought after destinations in the Pascack Valley, Westwood always represents excellent value to consumers and this is reflected in a very solid sales performance for Westwood homes this year. Through the first 7 months of the year, Westwood sales are up by 5%, dollar volume is up by 20% and the average sales price is up by 14%. What’s happened this year is that Westwood homes have been selling in higher price ranges than they did last year.

August 1st shows an even better future with a blistering 3 to 1 ratio of For Sale to Under Contract units. Add in a huge 42% drop in the time it takes to get to closing and there can be no doubt that the market for a Westwood home has not only turned the corner – it’s improving significantly.