Here’s your Real Estate Market Report for Ridgewood for October 2020. The super heated seller’s market continues in Ridgewood as we head into the last quarter of 2020.
Due to the partial shutdown caused by the pandemic in March and April, the usual Spring real estate market was delayed allowing it to gain energy and really take off in the late Spring through the Summer continuing into October.
Since many have been working remotely, more square footage and extra elbow room at home is now a real necessity for many families – especially those living in city apartments. Because of this, many buyers have accelerating their plans to move from the city to suburbs like Ridgewood in search of more living space. As a result, demand for single family homes in our area has increased dramatically over the last few months.
Currently, Ridgewood home sales remain strong while the local housing supply struggles to keep up with demand. Therefore, the competition for the well priced properties has been fierce leading to bidding wars causing many homes to sell for much more than the list prices.
Although the very strong demand has created a sellers market, there is still good news for buyers including the exceptionally low interest rates now and for the foreseeable future. Additionally, homeowners are really motivated to list sooner than later which will, in turn, bolster the supply of new listings for buyers thus sustaining the strong market as we head toward 2021.
A look at the Housing Stats in the Market Report for Ridgewood
Homes Sold and Median Prices
According to the New Jersey Multiple Listing Service (NJMLS), 38 single family homes in Ridgewood sold during the month of September (compared to 56 homes during the month of August). For the month of September, the median sales price remained relatively steady at $959,000 (only a slight increase from $957,875 in August).
Supply and Demand – The Absorption Rate
As a reflection of the heightened demand and the very limited inventory of homes, the absorption rate in September was very low, only 2.04 (calculated in months) – even lower than August’s absorption rate of 2.67. This shrinking absorption rate reflects the imbalance of supply and demand for homes in Ridgewood and indicates a strong sellers market.
At the point of time in September when the absorption rate was calculated, there were only 59 active listings, so based on the fact that 347 homes closed in the previous 12 months there was just a little over a two months supply of listings on the market. For comparison, in August the absorption rate was 2.67 months based on 74 active listings and 333 homes closed the previous 12 months. These low absorption rates reflect the strong demand and the low inventory of homes on the market.
By looking at absorption rates (the mathematical representation of supply versus demand) you can better understand how many homes are available in a give market and how long they are taking to sell. A six month supply of homes is considered a balanced market – when the number of listings roughly equals the number of buyers. Rates over six months generally represent a buyers market while those below represent a sellers market.
What does this data mean? Plus Year Over Year Comparisons
With only 2.04 months of inventory, the strong sellers market continues. Now here’s the interesting part…
When comparing the 2020 third quarter numbers to the same period in pre-pandemic 2019, dramatic increases in the sales prices reveal a very heated real estate market which is great news for sellers in Ridgewood. For instance, 137 single family homes sold in the 3rd quarter of 2020 which is up over 16% from the 3rd quarter of 2019. Furthermore, the year over year median sales price increased 22% to $925,000 in the 3rd quarter of 2020 compared to $758,125 in the 3rd quarter of 2019.
As a refresher: the median sales price is the middle value in the list of all the sales prices in Ridgewood. (Half the properties were more expensive than the median and half were less expensive). On the other hand, the mean sales price is the average of all property sales taking into account both the very high and the very low sale prices which can sway the mean while having little effect on the median number. Therefore, the median sales price is a better indicator of the market.
Now buyers, I know what you’re thinking…
What does this mean if I’m buying a home?
While the elevated sales prices benefit sellers, home buyers should not be discouraged from jumping into the Ridgewood real estate market.
Just to be clear, all homes are not selling for 22% more than they were last year. Instead, these increased numbers only indicate that more homes at the higher end of the market are selling this year compared to last year at this time. Plus it’s important to remember that the traditional Spring market was delayed for a month or so, thus pushing the sales season later into the Fall. Even though the homes are selling at a rapid pace, the Fall market is continuing to provide a steady flow of new listings. Plus the low interest rates are offering buyers more purchasing power in the market,
Wondering what your home might be worth now? Find out instantly with our 15 second home value calculator.
Here are the most recent listings just added to the database in the average price range for Ridgewood. All homes here are priced at $1M or less:
Information based on data supplied by the New Jersey Multiple Listing Service (NJMLS) which does not guarantee its accuracy. Data may not reflect all real estate activity in the market.
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