If you’re looking to buy a home in Rumson, you have more choices than you had a year ago. If we look at the year-to-date statistics, we find there are 4% more single-family homes listed for sale. The number of listings (or “Inventory”) is one of the 4 key, objective indicators I use to look at the local real estate market. More listings normally result in lower future home prices, and while that may be good news for home buyers, it’s bad news for anyone trying to sell a home in Rumson.
There’s more bad news for home sellers: 21% fewer homes sold in the first 7 months of 2014 than in the same time period in 2013. Fewer home sales indicate lower demand, and lower demand also produces declining prices in the near future. Again, if you’re looking to buy a home in Rumson this may work to your advantage.
The median Rumson home sales price is down 1% compared to what it was a year ago. A 1% decline may not seem like much, but any decline in prices represents bad news for home sellers (and good news for home buyers).
The 4th indicator I use is the real estate absorption rate. You may remember from my previous posts, that the absorption rate is a calculation of how long it would take to sell ALL of the homes listed for sale, if homes continue to sell at the same rate as they have during the past 12 months. The absorption rate is important because it takes into account both supply and demand. An absorption rate of 5 – 7 months is considered to be a “normal market”, while greater than 7 months is a “buyer’s market” and less than 5 months is a “seller’s market”. Rumson’s absorption rate is currently 5.8 months, and it was 5.7 months at this time last year. To me those numbers are similar, so this indicator is neutral right now.
|Rumson Home Sales, Jan 1 – Jul 31|
|Sales (Demand)||72||57||21% fewer sales.|
|Listings* (Supply)||53||55||4% more listings|
|Months’ Supply* (Absorption Rate)||5.7||5.8||Similar Demand vs Supply|
|*based on the past 12 months|
|Median Sale $||$1,085,000||$1,077,500||1% lower median sales price.|
So, of the 4 key indicators for Rumson real estate, we have one which is neutral, and 3 that are predicting lower prices in the near future. If you’ve been thinking of putting your home on the market you may want to do so sooner rather than later, and I’d be glad if you’d let me be one of the REALTORS® you interview to list your home.
If you’re interested in buying a Rumson home and you can pay for it in cash, you may want to wait and let prices go down before you jump in. If you’ll be needing a mortgage the decision becomes more difficult: even though mortgage rates are rising at a slower pace than the “experts” predicted they would, the trend is definitely towards higher rates. Make sure you have a letter of pre-qualification from at least one mortgage lender. You’re not committed to use that lender, but if you submit a copy of the letter when you make an offer on a house it strengthens your position with the Seller.
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