Despite a strong month in August, the year-to-date Rumson real estate picture is still mixed. The same number of homes (8) sold this August as did last August, but the monthly median sales price was up 19% (to $1,501,500). There’s a LOT of statistical information in this post, so if numbers and statistics aren’t your strong points, please slow down as you read through this.
Here are Rumson’s 8 month year-to-date real estate statistics:
Sales: 69 in 2012, 81 in 2013 (+17%)
Listings: 67 in 2012, 79 at the end of August 2013 (+17%)
Median Sales Price: $1,195,000 in 2012, $1,100,000 in 2013 (-8%)
Absorption Rate: 9.0 months in 2012, 6.3 months now (stronger Demand vs. Supply)
Of these 4 key, objective real estate indicators, two are positive and two are negative. More sales normally predict higher home prices, whereas more listings predict lower prices. Nationwide home prices are up 12%, but as you can see, in Rumson the median price is actually down 8%. This isn’t what you would expect with a lower real estate absorption rate.
If you remember my previous posts, you know that the absorption rate is a calculation of how long it would take to sell all of the homes that are currently on the market, assuming that homes continue to sell at the same rate that they did during the past 12 months. An absorption rate of 5 – 7 months is considered to be a “normal market”, whereas a rate longer than 7 months is considered a “buyer’s market” and a rate shorter than 5 months is considered a “seller’s market”. Looking at the numbers above, that means that a year ago Rumson was in a “buyer’s market” but now it’s back to a “normal market”.
So is it a good time to sell a home in Rumson, or is it a good time to buy one? To help answer that question, let’s dig a little deeper into the statistics:
Average Sales Price: $1,241,447 in 2012, $1,263,900 in 2013 (+2%)
Average Listing Price: $1,344,510 in 2012, $1,342,170 in 2013 (similar listing prices)
Average Sales/Listing Price Percentage: 92.3% in 2012, 94.2% in 2013 (higher percentage)
Cumulative Days on Market: 112 in 2012, 85 days now (homes selling faster)
At first you might be surprised that the average sales price increased 2% when the median price decreased 8%. To explain the discrepancy, remember that to get the average you just add up all of the sales prices and divide by the number of homes that were sold, but the median is the price at which 50% of the homes sold for a higher price and 50% sold for a lower price. The average price can be higher than the median price when more higher-priced homes are selling, or when a few very high-priced homes are sold. For Rumson, more higher-priced homes sold.
Now look at the last 3 numbers: the average listing price has stayed about the same, but the average percentage of the sales price to the listing price is higher, and homes are taking fewer days to sell.
Although the overall picture is still mixed, these last 4 numbers tell me that, right now, it may be a good time to both sell a house in Rumson or to buy one. It’s a good time to sell because your home will probably sell faster than it would have a year ago and you may sell for a higher percentage of the listing price (assuming, of course, that your listing price correctly reflects the current market). It’s a good time to buy because Rumson real estate still hasn’t had the double-digit price increase that we’ve seen nationwide, and mortgage rates are still historically low.
If you’d like to talk some more about selling or buying a home in Rumson (or if you’d like me to go through the numbers more slowly), just call, text or email me.
(732) 239-0739 (cell) (732) 530-6686 (office)