Earlier this month we looked sales of single-family homes in Rumson in 2011. Today let’s focus on Fair Haven, and look at how 2011 home sales compared to 2010 and several years prior to that. To repeat what we always say: all real estate is LOCAL, so when we talk about “the (real estate) market”, we need to look town by town instead of looking at New Jersey as a whole or even Monmouth County as a whole. When realtors talk about home prices, we often talk about the median home price rather than the mean or average price. The “median” is the price at which 50% of the homes sold for more money and 50% of the homes sold for less money; it’s less affected by outliers than the calculated average price. So for Fair Haven specifically, did median home prices go down in 2011, or did they go up? Let’s look at the numbers. Note: there are 4 tables of data in this post, so if you’re not a “numbers person” you may want to just look at the first table and then scroll down to the last 3 paragraphs.
Year # Sold Median Price Avg CDOM
2010 58 $ 669,200 105
2011 76 $ 641,250 (-4.2%) 97
Where CDOM = Cumulative Days On Market.
As we can see, more Fair Haven homes sold in 2011 than in 210 (76 vs. 58), and they sold slightly faster (97 days vs. 105 days). The median Fair Haven home price decreased by 4.2% (note: Rumson home prices declined 4.7% in that same time period). Remember, however, that the numbers above reflect all Fair Haven home sales, and before we draw any conclusions let’s explore this a bit further.
There are fewer homes in Fair Haven than in Rumson, but Fair Haven also has waterfront homes, although most are not; some have large properties, others are on small lots. If you’re trying to buy or sell a home in Fair Haven the median sales price for all homes may not be that helpful. Let’s try to drill down and take a closer look. Waterfront properties always command a premium price, so let’s first look at waterfront vs. non-waterfront homes in Fair Haven:
Waterfront Fair Haven Homes
Year No. Sold Median Price Avg CDOM
2010 3 $1,500,000 98
2011 5 $1,500,000 96
I hate to draw any conclusions when we’re dealing with small numbers of sales (in this case 3 or 5). However, what we can say is that the median price of waterfront homes in Fair Haven was very close to the median price of Rumson waterfront homes ($1,435,000 for 2011). Just as for Rumson, waterfront home prices in Fair Haven appear to be stable. The great majority of Fair Haven homes are not waterfront, so looking at those should give us a better idea of what’s happening with Fair Haven real estate:
Non-Waterfront Fair Haven Homes
Year No. Sold Median Price Avg CDOM
2010 55 $663,400 105
2011 71 $625,000 98
Here the numbers say that even though more Fair Haven non-waterfront homes were sold in 2011, and were on the market for fewer days than in 2010, the median price declined by 5.8% compared to the prior year. Again, very similar to the decline (5.2%) for non-waterfront homes in Rumson.
When we looked at Rumson we had enough total home sales to break them down by the number of bedrooms. Let‘s try to do that for Fair Haven. Of the 71 non-waterfront Fair Haven home sales, how many were in each bedroom category? Here’s what the numbers tell us for the homes that most people are interested in:
Fair Haven Non-Waterfront Homes by Number of Bedrooms
Year 3 BRs 4 BRs 5 BRs
2010 $582,500 (n=13) $692,500 (n=24) $925,000 (n=13)
2011 $445,000 (n=19) $685,000 (n=43) $965,000 (n=5)
Now what can we make of this? It looks like median prices for 3 bedroom non-waterfront Fair Haven homes took a beating in 2011, while prices for 4 bedroom homes were pretty stable (-1.1%) and 5 bedroom homes increased slightly (4.3%) in value.
Statisticians like to say that you need a minimum number of data points (usually at least 20) in order to reach any meaningful conclusions. Fair Haven is a small town, and only in the 4 bedroom category do we have more than 20 sales in both of the two years. We can be comfortable that the calculated 1.1% decrease in the prices of 4 bedroom homes is valid. However, with only five 5-bedroom homes selling in 2011 we can’t come to ANY conclusions about that category. What about the 3 bedroom category? Are 13 sales in 2010 and 19 sales in 2011 enough to be statistically significant?
If we drill down and itemize the 3 bedroom homes that were sold, we find that in 2010 the lowest sale price was $399,999 (only 1 sold at that price) and the highest price was greater than $1,000,000 (1 sold at that price). In 2011, there still was one sale at over $1,00,000, but there were 5 homes that sold for less than $400,000. In both years, the majority of Fair Haven 3-bedroom homes sold in the $400,000 – $600,000 range. So did 3 bedroom Fair Haven homes take a beating in 2011 or not? My gut feeling is that they didn’t, but you can judge for yourself.
So overall, what can we say about the 2011 housing market in Fair Haven? In my mind there were a lot more positives than negatives. More homes sold and sold more quickly. Median prices declined by less than 5%. Since 2004, the median Fair Haven home price was higher than 2011’s only in 2007 ($679,000) and 2010 ($669,200). In addition, there’s been a significant improvement in a number that realtors use to judge the market- the real estate absorption rate. The Real Estate Absorption Rate is a calculation estimating how many months it will take to sell all of the houses that are currently available for sale if the current rate of sales remains constant. For more information, look at the November 9, 2011 post: https://rumsonfairhavenhome.wordpress.com/2011/11/09/the-real-estate-absorption-rate/.
In a normal market, there’s a 5 to 7 month supply of homes that are listed for sale. When there’s more than a 7 month supply we say that we’re in a “buyer’s market” and when there’s less than a 5 month supply we say we’re in a “seller’s market”. Here’s what 2010 and 2011 looked like:
10.6 month supply 8.1 month supply
At an 8 months supply of homes, Fair Haven is still in a “buyer’s market”, but it’s a lot closer to being in a “normal market” than it was one year ago. As a comparison, Rumson now has a 9.2 month supply, and Monmouth County as a whole has an 11.6 month supply. If you’re thinking of buying or selling your Fair Haven home in 2012, we’re closer in having a “normal market” than we’ve been for several years. If you’re looking for a Fair Haven local expert to help you buy or sell, please give me a call or send me an email- I’d be glad to help.
Leonard “Len” Dunikoski
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760
(732) 350-6686 (office)
(732) 239-0739 (cell)