Last week we talked about a local newspaper article that said home prices in the Monmouth and Ocean Counties have decreased by an average of 9.9% in the third quarter. A reader asked me if I could provide specific town-by-town information about the local real estate market in the 3rd quarter of 2011. Here are the data:
|Town||Year||Type||Closed||Median $||% Change|
As you can quickly see, the numbers are all over the place, varying both town by town as well as by type of property (single-family homes vs. condominiums) within a given town. For example, look at Sea Bright. At first glance it looks like it was a GREAT quarter for Sea Bright condominiums, with the 2011 3rd quarter median price 27.7% higher than it was in 2010. Then again, it looks like it was an AWFUL 3rd quarter for Sea Bright single-family homes, with the median price decreasing by 28%. The question is whether you can “believe the numbers”, or whether you can draw any conclusions from the numbers.
I’ve often told you that I don’t like to make any conclusions based on just a small number of home sales. The “rule of thumb” for statistics is to have at least 20 data points (in our case, home sales) to look at. Ours are small towns, and that’s why I don’t like to look at monthly home sales, because they often are less than 20. I think quarterly or year-to-date sales numbers are far more valid when we look at any specific town in our local area. Now look back at the 3rd quarter sales of single-family homes in Sea Bright: only 1 home was sold this year, and only 2 homes sold last year. I’m certainly not going to draw any conclusions based on 1 or 2 home sales.
Rumson was the only local town that had at least 20 homes sold in the 3rd quarters of both 2010 and 2011, and I’m very confident that the 3.4% decline in median home prices is statistically significant. In Fair Haven, Little Silver and Oceanport we didn’t have at least 20 homes sold in both years, but enough homes sold that I trust the 8.1%, 6.2% and 12.2% declines as reasonable estimates of the home markets in those 3 towns.
By tomorrow we should have the final numbers for November, and I thin the 11 months-to-date percentage changes will give us more reliable information than the numbers for a single quarter. That’s how I see it anyway. If you have other thoughts, please share them with me and with our readers. Or give me a call and we’ll talk about it over a cup of coffee.
Leonard “Len” Dunikoski, SRES
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760
(732) 530-6686 (office)
(732) 239-0739 (cell)