If you’re a Fair Haven home owner or if you’ve been thinking about buying a home in Fair Haven, there are 4 things you need to know about the current local real estate market. If you’ve been following my posts you already know what they are: they’re the 4 key objective, measurable indicators for residential real estate.
Here they are: (1) sales were up 20%, (2) listings are down 35%, (3) the median selling price was 3% higher, and (4) the real estate absorption rate may be predicting a “seller’s market” in the near future.
More sales and fewer listings normally result in higher sales prices, and that’s exactly what we saw. With such dramatic changes in one year, it’s surprising that the median single-family home price was up by only 3% compared to 2011 (the median is the price at which 50% of the homes sold for more money and 50% for less). I would have expected a bigger increase, especially with the median Rumson home price increasing by 8%.
Here’s the reason why we could be heading into a “seller’s market” in Fair Haven: the real estate absorption rate. It’s VERY important because it’s an indicator of demand for houses compared to the supply of houses. It’s a calculated value, in months, of the time it would take to sell all of the homes currently on the market, assuming that homes continue to sell at the rate they have in the past 12 months. In a so-called “normal market”, the real estate absorption rate is between 5 and 7 months; numbers higher than 7 months indicate a “buyer’s market” and rates lower than 5 months indicate a “seller’s market”.
The present real estate absorption rate is 5.0 months, and it was 6.9 months a year ago. In one year we’ve moved from being on the edge of a “normal market” to being on the edge of a “seller’s market”! That’s why I’m saying that I expect buyers will have to pay significantly higher prices for Fair Haven homes in the near future. Here are all of the year-end numbers:
|Fair Haven Home Sales, January 1 – December 31|
|Sales (Demand)||76||91||20% more sales.|
|Listings (Supply)||43||28||35% fewer listings.|
|Months’ Supply (Absorption Rate)||6.9||5.0||Demand vs Supply much stronger.|
|Median Sale $ (Value)||$641,250||$662,500||3% higher median sales price.|
As a real estate professional, I look at the real estate market on a daily basis. The take home message here is that if you live in Fair Haven and you’ve been thinking about selling your home, 2013 might be a good time to sell. I’d be glad to give you a free estimate of what your home is worth in today’s market. On the other hand, if you’ve been thinking about buying a home in Fair Haven, you might want to start looking sooner rather than later. We know that mortgage rates will be staying low for the next year or so, but home prices may take a big jump. A 5% increase for the median Fair Haven home price works out to be $33,000; do you want to take out a $33,000 higher mortgage?
Leonard “Len” Dunikoski, GRI
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760
(732) 239-0739 (cell) (732) 530-6686 (office)