Earlier this week we reported that Rumson single-family home sales were down by 16% compared to last year. This isn’t the situation in Fair Haven, where we have a 13% increase compared to the same period in 2011. The median home price is considerably lower in Fair Haven ($656,000) than in Rumson ($1,200,000), so the local real estate market seems to be showing its greatest strength in the $500,000 – $750,000 range.
The other big difference between Rumson and Fair Haven involves the inventory of homes available for sale. In Rumson there are 20% more homes on the market than there were a year ago, while in Fair Haven there are 33% fewer listings. The combination of more sales and fewer listings usually predicts higher prices in the future, so it will be interesting to see what happens to Fair Haven home prices during the 4th quarter. The latest numbers are good news if you’re thinking of selling a home in Fair Haven, and not such good news if you’re looking to buy in Fair Haven.
If you’ve been reading my columns you know how I’ve emphasized the importance of the “real estate absorption rate”. The absorption rate is a calculation of the number of months it would take to sell all of the houses that are now on the market, assuming that home sales continue at the same rate as in the past year. It’s an indication of the relationship between demand and supply. To refresh your memory, an absorption rate of more than 7 months indicates a “buyer’s market”, a rate of 5 – 7 months is considered a “normal market”, and a rate less than 5 months indicates a “seller’s market”.
Fair Haven’s real estate absorption rate is now 6.1 months compared to 7.0 months at the end of September 2011, so it’s safe to say that Fair Haven is a “normal” real estate market. Rumson, on the other hand, went from an absorption rate of 8.5 months a year ago to an absorption rate of 10.4 months now, so Rumson seems to be trending towards more of a “buyer’s market”. Here are the Fair Haven numbers:
|Fair Haven Home Sales, January – September (9 Months Year To Date)|
|Sales (Demand)||60||68||13% more sales.|
|Listings (Supply)||49||33||33% fewer listings.|
|Months’ Supply (Absorption Rate)||7.0||6.1||Demand vs Supply improving.|
|Average Sale $ (Value)||$712,049||$680,800||4% lower average sales price.|
|Median Sale $ (Value)||$655,250||$656,000||Similar median sales price.|
Although the weather’s turning colder there still are homes that go on the market in the 4th quarter every year. If you’re looking to buy a house, take advantage of the Sunday public open houses and see some of what’s currently for sale. If there’s a “Consumer Information Statement” at the open house, take one and make sure you read and understand it. Remember that the REALTOR® at the open house is acting on behalf of the seller.
What if you see a house for sale that looks good to you? Here’s where I disagree with many of my colleagues. My recommendation is that as a buyer you should NOT call the listing agent (even if it’s me), because she/he has a fiduciary responsibility to get the highest price for the seller. As a buyer, you want to be represented by a REALTOR® who will act as a “buyer’s agent”, and whose fiduciary responsibility is to get the lowest price for you, the buyer. Wouldn’t you agree?
Note: I wrote this article; these are my personal views and do not necessarily reflect the views of Diane Turton, Realtors.
Leonard “Len” Dunikoski, SRES
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760
(732) 239-0739 (cell) (732) 530-6686 (office)