Today we’re going to look at the neighboring town of Little Silver According to the most recent (February) S&P/Case-Shiller home price index, nationwide home prices are 12.9% higher than a year ago. I’ve already told you that Fair Haven home prices are up 19% and Rumson prices are down 2%. So what’s happening in Little Silver?
If you’ve been following my posts you know I don’t calculate any year-to-year percentage changes until there are at least 20 home sales in both years; calculations based on fewer than 20 data points are not considered statistically significant. Little Silver is a small borough, and even after 4 months we’ve had fewer than 20 sales, so I’m only going to give you the raw data. From January 1st to April 30th, the median sales price was $523,500 this year and $500,000 last year.
The median sales price is one of 4 key, objective indicators I use to assess the local real estate market. When the median price goes down, it’s good news for home buyers but bad news for home sellers. The 2nd key indicator is the number of sales. Year-to-date, 14 Little Silver homes have sold compared to 19 in the same period in 2013. Fewer sales normally predict lower prices in the near future (but remember: don’t draw any conclusions based on fewer than 20 sales).
The number of homes listed for sale declined from 33 to 24, and that’s based on a 12-month average so that indicator is down 27% (fewer listings normally predict higher prices and more listings normally predict lower prices).
The bad news for Little Silver home buyers is that the real estate absorption rate is 3.3 months now, compared to 5.7 months a year ago. The real estate absorption rate is a calculation of how many months it would take to sell ALL of the homes currently listed for sale, assuming that homes continue to sell at the same rate that they have in the past 12 months. It takes into account both supply (i.e., inventory) and demand (i.e., sales). An absorption rate of 5 – 7 months is considered a “normal market”, whereas greater than 7 months is considered a “buyer’s market” and less than 5 months is considered a “seller’s market”. The absorption rate tells us that Little Silver was in a “normal market” last year, but we’re now in a “seller’s market”. 3 of the 4 Little Silver homes that sold in April sold in less than 2 weeks.
Here are the 4 objective real estate indicators in tabular form:
|Little Silver Single Family Home Sales, Jan 1 – Apr 30|
|Listings* (Supply)||33||24||27% fewer listings.|
|Months’ Supply* (Absorption Rate)||5.7||3.3||Demand vs Supply much stronger.|
|*Based on the prior 12 months|
|Median Sale $||$500,000||$523,500|
If you’ve been thinking of buying a home in Little Silver, you need to know that we’ve been in a “seller’s market” since last July, so you’re probably going to have to pay more for a home than you would have a year ago. Continue using the internet to search for homes in your price range. Drive by houses that look interesting, and get an idea of what the neighborhood is like. However, if you find a house you’d like to visit, I strongly recommend that you DON’T CALL THE LISTING AGENT (even if it’s me). The Listing Agent works for the Seller, and has a fiduciary responsibility to negotiate the highest sales price for the owner. You want to be represented by a Buyer’s Agent who will work only for you, and who will have a fiduciary responsibility to negotiate the lowest sales price for you.
The first time you meet with a real estate agent in New Jersey, he/she should give you a copy of a “New Jersey Consumer Information Statement” and explain its contents to you. Read it carefully- if you have any questions about it give me a call. It would be my pleasure to be your Buyer’s Agent, whether you’re a first-time home buyer or one who’s owned several homes.
(732) 239-0739 (cell) (732) 530-6686 (office