As Inventory Rises, More Towns Make the ‘Cold’ List

Back in the day (say, two years ago or more), a list of the hottest communities was published each month in the Otteau Valuation Group’s report to subscribing real estate professionals. Sometimes, more than two dozen towns would be on that list, each with just four months’ worth of inventory or less to burn; six months’ inventory is considered the threshold for health.

In late 2009, after inventory swelled precipitously in New Jersey, the “hot” lists stopped coming.

Today, few towns would qualify for the now-extinct list: Chatham, for instance, had just three months’ worth of listed homes to sell, according to the December report from Otteau Valuation, which is based in New Brunswick. But analysts tend to compile statistics based on developing trends — and hotness is no longer, well, hot.

In fact, today’s trend should perhaps be called “coldness.” Using the statistics reported by Otteau, it is striking how starkly the coldest communities stand out.

As Jeffrey G. Otteau, the president of the analytic group, pointed out last fall, it is almost unfair to lump the southern half of New Jersey with the northern part when weighing relative market health. This is mostly because of the south’s greater distance from the economic engine of the New York metropolitan area.

But even within the northern half, narrowing focus to half a dozen counties within the metropolitan area — Bergen, Essex, Hudson, Morris, Passaic and Union — plenty of spots are in the grip of a fierce chill.

Beyond a doubt, the coldest is in the Essex County city of Irvington, which has an estimated 52.5 months’ worth of unsold inventory. In other words, it would take more than four years to sell all the houses currently listed.

At the end of November, when the last Otteau sampling of sales statistics was done, 210 houses were on the market in Irvington, with only two sales contracts signed that month, and six sales in October. The number of listed houses was way up from January 2010, when 120 were for sale and inventory was pegged at 20 months’ worth.

Inventory in Irvington, an older city near Newark Liberty International Airport with a worrisome crime rate, never got lower than 13.9 months’ worth in the last year. It hit that low point in March, when the federal tax credit was playing a role in attracting buyers for lower-priced houses, which Irvington offers in abundance. But the tax credit had expired by May.

Interestingly, the municipality in northern New Jersey with the second-largest inventory is a small and affluent one, the borough of Ho-Ho-Kus in Bergen County.

Like its county neighbor Alpine — the nation’s wealthiest ZIP code, according to Forbes Magazine — as well as nearby Franklin Lakes, Ho-Ho-Kus has a high median household income ($164,000, according to census projections from citydata.com) and house values ($1.2 million).

But as in those two small and exclusive communities, relatively few houses are put up for sale at any time — and those few are taking longer to sell. With 33 homes on the market in October and November, two contracts were signed in November and none in October. That put the inventory rate at 33 months’ worth. In Alpine, it was 28 months, and in Franklin Lakes, 21.4.

Bergen County’s other cold communities were: Cliffside Park, with 18.9 months’ worth; Englewood, with 17.7 months; and Fort Lee, with 16.2. One of the county’s most populous communities, Fort Lee had more than 500 homes on the market, the majority of them condominiums.

In Essex, home of Newark, the state’s largest city, communities that ranked just below Irvington were: Essex Fells, with 38 months’ worth; North Caldwell, with 25.5 months; East Orange, with 23.6 months; and Belleville, with 23. Newark itself had 19.8 months’ worth.

In Hudson County, which includes the string of Hudson riverfront towns facing Manhattan, West New York had the highest inventory: 23.3 months’ worth. This mostly middle-class community is home to part of the high-end Port Imperial riverfront residential complex, which saw slacker condominium sales — especially resales — despite its two light rail stops and ferry station.

The second- and third-biggest inventories were in the Journal Square section of Jersey City and in Weehawken.

In Passaic County, the places with the biggest backlogs were Pompton Lakes, with 29.3 months; Haledon, with 24.7; and Bloomingdale, with 17.7. Wanaque’s inventory was almost the same as Bloomingdale’s, 17.5 months.

In Union County, which over all had the lowest inventory of any county, at 9.6 months, those communities with the highest were Roselle, at 19.6 months; Plainfield, at 18.7; and Linden, at 14.1.

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