The 2nd quarter statistics are in, and as of June 30th the median price of a single-family home in Rumson is up 10% compared to what it was a year ago. The change in the median price is one of the 4 key, objective indicators you should know if you’re following Rumson real estate. An increase in the median price is a good sign for home sellers and a bad sign for home buyers.
The 2nd indicator is the number of homes that have sold so far year-to-date. For Rumson, there have been 8% fewer sales this year compared to the same 6 month period in 2013. A decrease in the number of sales indicates a decrease in demand, and lower demand normally results in lower prices in the near future.
The 3rd indicator is the number of homes that are listed for sale. Here I look at an average of the past 12 months, and I find that we’ve had 2% more listings than we did one year ago. More listings indicates an increase in supply, and more supply also results in lower prices in the near future because buyers have more choices.
The last indicator is an important one: it’s the real estate absorption rate. This is a calculation of how long it would take to sell ALL of the homes currently listed for sale, assuming that homes continue to sell at the same rate as they have in the past 12 months. The reason that it’s so important is that it takes into account both supply and demand. For this indicator, it’s important to look at both the number itself and the change from one year ago. An absorption rate of 5 – 7 months is considered a “normal market”, more than 7 months is a “buyer’s market” and less than 5 months is a “seller’s market”. One year ago the Rumson absorption rate was 6.4 months, and currently it’s 5.3 months. Both numbers are within the range for a “normal market”, but now it’s closer to a “seller’s market” than it was a year ago.
Here are the 4 objective indicators in tabular form:
|Rumson Home Sales, Jan 1 – Jun 30|
|Sales (Demand)||52||48||8% fewer sales.|
|Listings* (Supply)||54||55||2% more listings|
|Months’ Supply* (Absorption Rate)||6.4||5.3||Stronger Demand vs Supply|
|*based on the past 12 months|
|Median Sale $||$953,750||$1,050,000||10% higher median sales price.|
The bottom line is that the 4 key indicators are split right down the middle: 2 are predicting higher prices in the near future and 2 are predicting lower prices. If you’re considering buying a home in Rumson, I’d be glad to help you find the right house within your price range. I’ll also negotiate as low as purchase price as possible. This is one reason why I always advise home buyers not to call the Listing Agent (even if it’s me). The Listing Agent has a fiduciary responsibility to the Seller to negotiate the highest possible selling price. I’d be glad to act as your Buyer’s Agent, where I’ll be working only for you, and not for the seller.
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(732) 239-0739 (cell) (732) 530-6686 (office)