Rumson and Fair Haven are relatively small towns, and although real estate is in high demand, not that many homes sell in any single year. If you’re thinking of buying or selling real estate here, you’d naturally like to know if this will be a good year for home sellers or for home buyers. Let’s look at the 2016 year-to-date home sales and see if we can make any predictions based on them.
Here are the 4 key statistics that I track every month (Sales, Listings, Absorption Rate and Median Sale Price):
|Rumson Home Sales, January 1 – February 29|
|Sales (Demand)||4||11||X% more sales|
|Listings* (Supply)||74||80||7% more listings|
|Months’ Supply* (Absorption Rate)||8.1||9.2||Weaker Demand vs Supply|
|*based on the past 12 months|
|Median Sale Price||$1,187,500||$1,500,000||X% Higher median sales price.|
I’m a PhD chemist by training, so the scientist in me knows that you need at least 20 data points whenever you’re trying to make a statistically-significant comparison of one data set to another. In terms of home sales, that means I won’t report a percentage change from one year to another until at least 20 homes have sold in each year being compared. As of the end of February, there were only 11 Rumson home sales this year, and only 4 last year (remember all the snow we had last year?). I won’t report a percentage change for either the number of sales or the median sale price based on so few sales.
When I report the number of listings or the real estate absorption rate, I use a rolling average of the last 12 months, so for those indicators, calculating a percentage change is appropriate. 7% more Rumson homes are listed for sale now than there were a year ago– an increase in the supply of homes for sale tends to lower sales prices in the near future.
The real estate absorption rate is a calculated value- it’s the number of months it would take were homes to sell at the rate they have sold in the past 12 months. It takes into account both the number of average sales per month and the number of average listings, and when the absorption rate increases, sale prices tend to decrease as well. Basically it’s a measure of supply vs. demand. When the real estate absorption rate is greater than 7 months it’s a Buyer’s Market. The rate increased from 8.1 months a year ago to 9.2 months now, so this says Rumson is even more of a buyer’s market than it was a year ago.
As of now, 2 of the 4 key indicators are looking favorable for Rumson real estate buyers, because they’re predicting that sales prices will be going down this year. The other 2 key indicators can’t be used because there just isn’t enough information there to make any reasonable projections. In my January 8th post, 2015 Rumson Home Sales and 2016 Predictions, I reported that 3 of the 4 key indicators were favorable for Rumson real estate buyers.
So does that mean you should run out and buy a home in Rumson right now? Not necessarily. I’ve been working with a young couple for several months now, helping them to see homes in Rumson and Fair Haven that are within their price range. They’re in the process of purchasing a nice home in Rumson (the Seller accepted their offer and we’re out of attorney review) for what I feel is very good value for the money. However, they’ve reached this point only after looking at many houses and really getting to know what’s available locally within their budget.
It would be my pleasure to work with you and spend as long as it takes until we find what you feel is the right house for you at the right price. If you’re a first-time home buyer, be sure to read my series of posts on The 5 “P’s” of Buying a Home. Rumson and Fair Haven are wonderful towns- I’ve lived here for over 40 years. My recommendation for home buyers is to take your time, get to know the local market in the area you’re considering, and decide to buy based on your head and not just your heart. You can find a home you love at a price that represents a good investment.
(732) 239-0739 (cell) (732) 530-6686 (office)