12-Month Absorption Rates Since 2011 for NJ Towns
Continuing from my recent post: Current Absorption Rates in Maplewood and South Orange
I recently wrote about the current, 3-month absorption rates in Maplewood and South Orange to explain, in data points, today’s market pressures of low inventory and strong demand. I received such a great input that I wanted to expand the data to answer a few questions that I received, including how SOMA absorption rates compare to other NJ towns as well as how they’ve changed over time.
The chart below details 12-month absorption rates ending each September in a number of northern NJ towns. The towns are either located along the Morris & Essex NJ Transit line or the Montclair-Boonton NJ Transit Line.
Peruse the data below and scroll down for a few key takeaways.
A few observations:
In 2011, all towns in this data set but two — Millburn and Westfield — had absorption rates above 6-months. In 2016, zero towns had absorption rates above 6 months. In 2016, the closest town to having the balanced market indicator of a 6-month absorption rate is West Orange at 4.92 months.
The town exhibiting the most consistent figures in this data set is Westfield with a range of 1.38 months while the town with the greatest range is Bloomfield with 9.88 months. In 2011, Bloomfield had an absorption rate of 14.25 months while the town’s 12-month absorption rate as of the end of September 2016 was 4.37 months. While Westfield’s data proves to be the most consistent, it’s not linear. It’s highest absorption rate was 5.06 in 2011 and its lowest absorption rate of 3.68 was just two years later in 2013.
While the ranges above identify Bloomfield and Westfield as the towns exhibiting the most and least change over this period of time, another figure to consider is the percentage of change between 2011 and 2016. Here again, Westfield proves to have the most consistent data from start to finish with a 7.1% change between 2011 and 2016. On the other end of the spectrum, Maplewood exhibited the greatest with a 72.6% change from 2011 to 2016.
Overall the towns in this data set are all experiencing the market pressures of high demand and low supply. These are all sellers’ markets that are being fueled by low interest rates, affordable home prices, as compared to other tri-state markets, and consumer preference for New York City accessibility.
Stay tuned for next week’s post where I’ll examine the markets behind these these absorption rates, including average sales price and size to better understand the demand behind these figures.