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A Hyperlocal Market Comparison of Montclair and Livingston NJ
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Montclair
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Livingston
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Population: 38,977
Median Age: 37.5
Median Household Income:$74,894
Housing Units: 15,607
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Population: 27,391
Median Age: 40.6
Median Household Income:$98,869
Housing Units: 9,457
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Source: USA Citylink
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As you move down the page,
two sets of data will be presented. The first will be for Montclair and the second, Livingston. Due to space limitations, you will see a significant though limited amount of the information available for each town. For a complete market analysis call me, Brian McCabe, at 973-865-1863.
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Montclair
Fee simple (single-family detached) and condo sales over the past 4 years.
As you can see, sales volume dipped in both housing categories in the past year, with the most dramatic decline being in condo sales. In general, sales will increase or decrease with the level of buyer activity in the market. Take special note of how closely the sales totals in Montclair and Livingston match one another.
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Livingston
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Montclair
Four-year sales trends by price point.
Price point analyses like this are fundamental to Hyperlocal Market Analysis, because price points are where sellers market their homes and buyers buy them. More importantly, price-point defined markets have their own supply and demand profiles. Knowing how a price point behaved in the recent past is key to developing sound marketing and buyer strategies.
Consider, for example, the highest price point range of homes (>$1,820,000). During the 12 months ending 6/8/2011 there were 6 sales in that price point. By comparison, there were 19 sales 4 years ago. Given the current economic environment it is common to see declining sales in the highest price points and stable or even increasing sales in the middle and lower price points.
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Livingston
Note that Livingston sales are more concentrated than they are in Montclair; the $380,000 - $470,000 price point illustrates that concentration. This is because Livingston's housing stock, which is newer than Montclair's, was targeted to the middle price points by builders and developers. Note also that except for the >$1,820,000 price point, which has remained strong, sales in the higher price points have all but vanished.
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Montclair
Home prices have stabilized.
I’m sure you’ve seen plenty of instances where home price changes were described in terms of median price (the 50th percentile). This is where half of the homes sold above the median and half sold below it. When I started conducting detailed analyses of markets I wondered whether prices at higher and lower percentiles moved the same way as median prices. The reason is that if you were selling a home that was closer to the 80th percentile, for example, you wouldn’t care much about what the middle of the market was doing. This table, then, compares home prices over the past 4 years and it does so across 5 percentiles: the 80th (where the sale price is higher than 80% of the homes sold), the 60th, median (50th percentile), 40th and 20th percentiles.
The data show that both Montclair and Livingston prices have remained steady over the past 3 years.
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Livingston
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The Myth of Comps
Buyers and sellers are often shown comps of recently sold homes as if they represent the real estate market. That’s like seeing a Ford Edsel on the road in 1959 and assuming that Edsels, which the Washington Post called “America's most-hyped failure,” were selling like hotcakes. So, just as one sold Edsel most assuredly didn’t represent the market for Edsels back in '59, neither does a comp or two represent the real estate market.
The point is that comps, important as they are, exist in a market context. I developed Hyperlocal Market Analysis to provide buyers and sellers with access to that context.
Before looking at the following charts, consider this metaphor.
Suppose you manage a baseball team, and you have to decide which of two players should be in the lineup, Each player has 100 hits. Player A collected his 100 hits in 200 at-bats. Player B required 500 at-bats to do the same. Which player would you select? Player A, of course.
That metaphor helps to explain the hyperlocal real estate market, because it's not just the number of sales that matter, it's the number of sales in comparison to total listings, each of which represents a potential sale, or hit, as in the metaphor. Higher percentages of total listings are sold in sellers' markets and lower percentages are sold in buyers markets.
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Montclair
There are 4 things that can happen to a listing:
(1) it can sell; (2) it can go under contract; (3) it can expire; or, (4) it can remain active. Between 6/9/2010 and 6/8/2011 there were 509 total listings in Montclair: 173 (34%) sold; 67 (13%) went under contract; 177 (35%) remained active; and, 92 (18%) expired. A couple of things to note: Nearly half (47%) of the total listings were either sold or went under contract. That's clear evidence of a seller's market, and it's confirmed by the ratio of sold listings to expired listings, which is nearly 2:1. By way of comparison, Belleville, which is a buyers market, has a sold/expired ratio of nearly 3:4.
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Livingston
The similarity of these two pie charts makes it clear that both Montclair and Livingston are sellers' markets.
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The logical next step in the analysis...
is to look at total listings and sales by price point, and to develop sales and buy strategies based upon that information. If you wish to take the analysis to that next step call me at 973-865-1863.
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My name is Brian McCabe. I am a licensed Realtor with Coldwell Banker Residential Brokerage (973-226-2577) and I am available to speak to church and civic groups about residential real estate markets in North Jersey and, of course, I invite your business.
You can reach me directly at 973-865-1863 (cell), bmccabe362@wessex-homes.com (email), or at 973-226-2577 (office).
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