There are the 4 key real estate indicators that I track every month (Sales, Listings, Absorption Rate and Median Sale Price). Each of them is an objective measure of the current real estate market, and each of them helps predict whether the real estate market is becoming better or worse for a buyer (or a seller). Here’s what the indicators are telling us about Fair haven real estate at the end of May, 2016:
|Fair Haven Home Sales, January 1 – May 31|
|Sales (Demand)||43||34||21% fewer sales|
|Listings* (Supply)||36||35||4% fewer listings|
|Months’ Supply* (Absorption Rate)||4.3||3.9||Stronger Demand vs Supply|
|*based on the past 12 months|
|Median Sale Price||$765,000||$780,000||2% higher median sales price|
The indicator that’s underlined and in bold italics is good news for home buyers.
This month only one of the 4 objective indicators is positive for Fair Haven home buyers. There were 21% fewer sales in the first 5 months of this year compared to a year ago. Fewer sales means lower demand, and lower demand means home buyers can negotiate lower prices more easily.
However, the other 3 indicators are bad news for home buyers. Fewer listings means home buyers have fewer choices (less supply), and that makes it easier for the seller to negotiate a higher price. The median year-to-date sales price is up 2% compared to what it was this time last year. Finally, the real estate absorption rate is shorter than it was 12 months ago. The 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 (demand) and the number of listings (supply).
When the absorption rate is between 5 and 7 months we’re in a “normal market”. When the absorption rate falls below 5 months it’s considered a “seller’s market”. Last June the Fair Haven absorption rate was 4.3 months (a “seller’s market”) and now at 3.9 months it’s even more of a “seller’s market”.
If you’re thinking of buying a home in Fair Haven, you’re probably going to have to pay more for a home than you would have a year ago. Even though fewer homes sold in the last 5 months than they did during the same period last year, demand is still high and homes that are priced at the market are selling fast. Often several home buyers are bidding on the same house, and this means that some homes are selling at or above their listing prices.
There is one area of the Fair Haven market that’s showing weakness: existing homes that are assessed at more than $1,000,000. A lot of new construction is coming on the market in the $1.0 – $1.5 million range, mostly consisting of 2,200 – 2,900 sq ft homes on small lots of 0.2 – 0.5 acres. Much larger existing homes (some on much larger properties) are available in “move-in” condition in that price range offering excellent value for the money. Some have been updated with high-efficiency heating and cooling systems, and have high-quality materials and workmanship that in my opinion are superior to what you’ll find in new construction.
If you’re thinking of buying a home in Fair Haven or the surrounding towns 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.
(732) 239-0739 (cell) (732) 530-6686 (office)