If you’ve been reading my blogs you know there are four key, objective indicators for real estate. Whether you’re a buyer, a seller, or just a current home owner, you should know what these indicators are predicting for future home prices. You can’t rely on national or state-wide trends: remember that you need LOCAL information. The latest real estate data for Rumson are mixed- let’s take a look at them:
January 1 – November Rumson single-family Homes:
Sales were up 23% (113 in 2013 compared to 92 in 2012)
Listings were up 26% (73 at the end of November 2013 compared to 58)
The median sales price was down 8% ($1,100,000 in 2013 vs. $1,200,000 in 2012)
The real estate absorption rate was shorter (5.9 months in 2013 vs. 8.2 months in 2013)
If you’re not a “numbers person”, all this information may seem a bit overwhelming. I’d be glad to sit down and go over it with you- no obligation, of course.
Here’s how we interpret the data: When sales go up, it indicates that demand has increased, and prices normally go up. However, when more homes are on the market (inventory higher), sellers have more “supply” and prices tend to go down. When the median sales price (the price at which 50% of the homes sold for more and 50% sold for less) goes down, home prices also tend to go down.
Finally, the real estate absorption rate (the calculated time, in months, it would take to sell ALL of the current listings, assuming that homes continue to sell at the rate they have for the past 12 months. This calculation includes both supply (listings) and demand (sales). A year ago the absorption rate was 8.2 months, and now it’s down to 5.9 months. An absorption rate of between 5 and 7 months is considered a “normal market”, and less than 5 months is considered a “seller’s market”. According to the absorption rate, last year Rumson was in a “buyer’s market” and now it’s in a “normal market”; this is a positive change.
The bottom line: two of the indicators are predicting higher future home prices in Rumson and two are predicting lower home prices. This is rather surprising when next door in Fair Haven and Little Silver, all 4 indicators are pointing to higher home prices. In fact, both Fair Haven and Little Silver are in “seller’s markets”, having some of the lowest real estate absorption rates in the state.
If you’re thinking of buying a home in Rumson, it’s good to have this kind of information. I love to provide home buyers with monthly updates about the local real estate market, and if this interests you, I’d be glad to add you to my mailing list.
If you’re planning to buy a home, ask yourself:
Do you think Rumson home prices will get any lower than they are now?
Do you think mortgage interest rates will get any lower than they are now?
Do you think mortgage lenders/underwriters will ease their lending standards?
To me, the answer to each of these questions is:” NO!”. You may want to act sooner rather than later. Just remember my advice: if in searching the internet you find a Rumson house you really like, DON’T CALL THE LISTING AGENT (even if it’s me). The Listing Agent (and his/her office) works for the Seller and has a fiduciary responsibility to get the highest price. I’d be glad to serve as your Buyer’s Agent, where I’d work only for you, and my fiduciary responsibility would be to negotiate the lowest price.
Call, text or email me!
(732) 239-0739 (cell) (732) 530-6686 (office)