Our weather was much better this year than it was during the first quarter of 2015, and we might have expected seeing the number of Fair Haven home sales increase. However, that wasn’t the case; in fact, we had one sale fewer than we had the year before. In addition, the median price of homes sold decreased from $766,250 to $655,000. These two facts seem to be good news for Fair Haven home buyers. However, since fewer than 20 homes sold in the first quarter of both years, it wouldn’t be statistically significant to calculate a percentage change from year to year.
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 – March 31|
|Sales (Demand)||18||17||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||$766,250||$655,000||X% lower median sales price.|
I report Year-to-Date numbers for home sales and median price, but use a rolling 12-month average of the number of homes listed for sale and for the real estate absorption rate. Since there are far more than 20 homes listed for sale in a year, it’s valid to calculate a percentage difference for that item. There were 9% fewer listings this year than the year before. Fewer listings indicate a reduced supply, and a reduced number of homes for sale tends to lead to increasing home prices (bad news for home buyers).
The real estate absorption rate is a calculation of 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 sales and the number of 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 considered a “normal market”, and rates less than 5 months are considered 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.
The bottom line: 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 to make any reasonable projections yet.
There’s not just a split in the key Fair Haven indicators, there’s also a split in the demand for homes by price. Homes listed below the median price are in high demand and are selling quickly. On the other hand, homes listed above the median price (and especially those above $1M) are selling more slowly. Buyers of million dollar and higher homes are being more selective, both for existing homes and for new construction.
It would be my pleasure to work with you regardless of the price range you’re considering. 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, and make a decision with your head and not just your heart. You can find a home you love at a price that’s a good investment.
Leonard “Len” Dunikoski, GRI
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760
(732) 239-0739 (cell) (732) 530-6686 (office)