West Essex Neighborhoods and Homes

I've always thought that Montclair had a certain mystique. I've lived in and around Montclair for all of my 60+ years, and I'm amazed at how so many people, from so many places, speak so fondly of Montclair.

However, recently I locked horns with a Montclair skeptic. He was interested in buying a home in the west Essex area, but said he thought that Montclair's reputation was undeserved. A scuffle ensued...not really...but I took what he said as a challenge to prove him wrong. So, using a residential real estate valuation system that I developed called Game Changer, I put together some information that blew both me, and him, away.

My goal was to prove that Montclair's mystique influenced how home buyers spent their money. In order to make the information meaningful, I needed a trial horse so I compared Montclair with West Caldwell, and I did so for two reasons: West Caldwell, like Montclair, is a wonderful place to live, and I happened to have West Caldwell data on hand.

Now, on to the results...
Everyone who sells or buys a house comes face-to-face with Original List Price (OLP)...the price that's floated by sellers to start the marketing process. Sellers hope to get it, and buyers hope they don't. So, why are OLPs important? Well, standing alone they aren't, but when paired with sales prices (SPs), they tell us a lot about how much buyer activity there is in a market. Consider the following table, which reports sales that took place at original list price or more (OLP+) in West Caldwell from 2006 to 2009.

The highest percent of OLP+ sales (25% and 26%) took place when there were more buyers in the market than there are now (great days, weren't they?), many of whom made offers on the same properties. When that happened, sellers had little reason to discount their prices, which led to higher percentages of sales at OLP+.

Well, things are a lot different now, but OLP+ sales didn't go away; they just became less frequent, as is evidenced by 2009, when 20% of sales were at OLP+. We'll revisit this information when we compare it to Montclair's OLP+ sales, but, before we do, take a look at the following table. It uses price-points to analyze homes sold in both West Caldwell and Montclair in 2009. (Price points are a hallmark of Game Changer's market evaluations.)

The table includes all single-family detached homes in both markets, and it divides the prices paid into 20 price points.

It came as no surprise that the Montclair market was far more active than the West Caldwell market; after all, Montclair is a larger town. What was surprising, however, was that while there was virtually no market in West Caldwell for homes priced above $680,000, Montclair had 96 sales above $680,000, 37 of which took place at $920,000 or more!

Okay, here comes the first test of whether Montclair's mystique influences how buyers spent their money. The West Caldwell table (below) is a reprise of the one you just saw. The second table is new. It shows Montclair's OLP+ sales.

During the comparatively slow market of 2009, 31% of Montclair buyers paid sellers their OLP or more, compared with 20% in West Caldwell. Better yet, back in the rarified air of 2006/2007, more than half of Montclair's buyers did so. Hmmm, sure looks like something "mystique-ish" is going on, doesn't it?

You probably saw this coming. The following table combines the OLP+ information with the price points of sold houses. Specifically, the table shows the percentage of sales in a price point that took place at OLP+. This is a really big deal, because a higher percentage of OLP+ sales in a price point means that multiple buyers want the same homes.

Yellow highlights indicate that 25% or more of a price point's sales took place at OLP+.

Take note of Montclair's $600,000 - $640,000 price point. Isn't it remarkable that 69% of sales took place at OLP or more?

The nice thing about this is that it makes sense.
More buyers means more demand, and more demand means firmer prices. The same logic works on the flip side, as well. Fewer buyers means weaker prices. Clearly, information like this...broken out by price point...has great currency for both sellers who don't want to leave money on the table, and buyers who want a deal.

One more fact confirms Montclair's special attraction to home buyers. In fact, it's something that both West Caldwell and Montclair have in common, and it has to do with the speed with which deals get done...specifically, sales that took place in 60 or fewer days.

In West Caldwell's case, all the sales that took place at OLP+ did so in 60 or fewer days (only the percent is shown). Eighty-eight percent sold that fast in Montclair. However, the differences between the towns are noteworthy: because Montclair is a larger town than West Caldwell, the tendency of buyers in Montclair to pay more is confirmed by volume; and, the willingness to pay more is spread across an incredibly wide range of price points...from under $200,000 to many millions of dollars.

So, is Montclair's mystique justified? I sure think so, and so does our skeptic...now. So, for all you Montclair enthusiasts out there, isn't it nice to know that your beliefs are supported by facts?

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Brian McCabe spent 25 years in the magazine business. His associations included Woman's Day, Redbook, New York Magazine and The Reader's Digest. For 12 years he was a principal of Ferret/New Media, Inc., an advertising and sales promotion agency specializing in private banking, media and technology. He is currently a licensed Realtor with Coldwell Banker Residential Brokerage in Caldwell, and his company, Ferret Properties, is rolling out Game Changer^®, a residential real estate market evaluation program.