The Fair Haven real estate market was very strong in 2015, and inventory levels were low. If you’re thinking of buying a home in Fair Haven this year, can the early 2016 home sales give you any idea of where prices are headed? We had an extra day in February (Leap Year), so let’s look at the Fair Haven home sales as of February 29th 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):
|Fair Haven Home Sales, January 1 – February 29|
|Sales (Demand)||11||9||X% fewer sales|
|Listings* (Supply)||37||34||9% fewer listings|
|Months’ Supply* (Absorption Rate)||4.9||3.5||Stronger Demand vs Supply|
|*based on the past 12 months|
|Median Sale Price||$765,000||$655,000||X% lower median sales price.|
The data reflect my bias towards reporting Year-to-Date results for the number of home sales and the median sales price, but a rolling 12-month average of the number of homes listed for sale, and for the real estate absorption rate. As of the end of February, there were only 9 Fair Haven home sales this year, as compared to 11 last year. Guess the extra day didn’t help this year, and neither did the better weather (we had lots of snow in January and February last year). I won’t calculate a percentage change for year-to-date periods unless both years have at least 20 home sales, because fewer than 20 sales don’t produce statistically-significant numbers.
Since the number of listings and the real estate absorption rate are based on a rolling average of the last 12 months, calculating a percentage change for those indicators is appropriate. There are 9% fewer Fair Haven homes listed for sale now than there were a year ago– a decrease in the supply of homes for sale tends to push sales prices higher in the near future.
The real estate absorption rate is a calculated value- it’s the number of months it would take to sell all the homes on the market, if homes continue to sell at the rate they did 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 decreases, sale prices tend to increase. Basically it’s a measure of supply vs. demand. A real estate absorption rate of 5 – 7 months is a “normal market”, and rates less than 5 months are a “seller’s market”. The absorption rate decreased from 4.9 a year ago to 3.5 now, so it’s telling us Fair Haven is even more of a “seller’s market” now than it was a year ago.
As of now, 2 of the 4 key indicators are pointing towards higher prices for Fair Haven real estate. The other 2 key indicators can’t be used because there just isn’t enough information (i.e., 20 home sales in both years) to make any reasonable projections yet.
So does that mean you should run out and buy a home in Fair Haven right now, before prices go up? Not necessarily. Before you consider buying a home in ANY market, you should get to know that market, and look at as many homes as you can in your price range. After a while you’ll know what to expect to find for homes in that price range, and you’ll feel confident making an offer when you find a new listing you like that’s priced at or below the Fair Haven market.
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 to live in- 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 make a decision to buy based on your head and not just your heart. You can find a home you love at a price that’s a good investment.
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