In 2006 Montclair area real estate saw price increases, albeit more modest than in recent years. Available inventory has risen to more typical levels compared to the heyday of short supply and intense demand we experienced a few years ago.

While the uniqueness of the Montclair Area market insulated us from the situation faced by markets around the country, it is true that a broad economic slowdown occurred in 2006, partly as a result of a two year campaign by the Federal Reserve to keep inflation under control by pushing interest rates higher. The good news is that the Fed has left rates unchanged since June 2006, with the federal fund rate at 5.25 percent.  In response, commercial banks have kept prime lending rates at 8.25 percent.  Two of the key indicators of where the first half of the 2007 market will take us will be the movement of inventory and interest rates.  We will watch both of these trends closely as the first two quarters of 2007 unfold and keep you informed.

As the first quarter has ended, a quick analysis shows us that sales prices are between 94%  and 101% of list price, depending on the town. Montclair’s list to sales price ratio leads the way at almost 101%.