Imagine reading a headline that said, “Little Silver Home Prices Up 19%”. Well, if you compared the 1st quarter median home sales prices of Little Silver single-family homes in 2014 and in 2013, that’s the percentage you might calculate, but the number would be meaningless. Remember, only about 80-90 homes sell in Little Silver per year. If you’ve been following my posts you know you need at least 20 sales in both years in order for comparisons to be statistically significant. Therefore, I’m only going to give you the raw numbers for home sales and median sales prices, but not calculate any percentage changes. Ten (10) Little Silver single-family homes sold in the first quarter this year, compared to 13 last year (do you think this year’s bad weather had anything to do with it?). The median sale prices for those homes was $596,000 this year and $500,000 last year (but remember, don’t draw any conclusions).
If we look at the past 12 months, 34% fewer Little Silver homes were listed for sale; fewer listings normally result in higher home prices in the near future. In addition, the real estate absorption rate decreased from 6.1 months to 3.1 months. The real estate absorption rate is a calculation of how long it would take to sell ALL of the homes on the market if sales continue at the same rate as they have in the past 12 months. In a “normal market”, there’s a 5 – 7 months’ supply of homes on the market; a supply greater than 7 months is considered a “buyer’s market” and a supply less than 5 months is considered a “seller’s market”. Little Silver was in a “normal market” last year, but now it’s in a “seller’s market”.
Here are the 4 key objective indicators in tabular form:
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Little Silver Home Sales, Jan 1 - Mar 31
2013 2014 Comments
Sales (Demand) 13 10
Listings* (Supply) 35 23 34% fewer listings.
Months' Supply* 6.1 3.1 Demand vs Supply much (Absorption Rate) stronger.
*Based on the prior 12 months
Median Sale $ $500,000 $596,000
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If you’re thinking of buying a home in Little Silver, you’re probably going to have to pay more than you would have a year ago. The warmer, nicer weather makes it easy for you to go to the public open houses on the weekends. Take advantage of these to look at what’s on the market at the present time, and to get a better idea of what you can expect to find within your budget. While you’re there, pick up a copy of the New Jersey “Consumer Information Statement” which describes the 4 types of relationships you can have with a REALTOR® .
However, please remember that the REALTOR® who’s hosting the open house is the Listing Agent, and works for the SELLER. He/she has a fiduciary responsibility to negotiate the highest price for the seller. You want to work with someone who’ll serve as your Buyer’s Agent, and who will have a fiduciary responsibility to negotiate the lowest price once you make an offer on a house. Feel free to call or email me if you have any questions, or if you’d like to interview me to serve as your Buyer’s Agent.
Len
Leonard “Len” Dunikoski, GRI
REALTOR® Associate
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760
(732) 239-0739 (cell) (732) 530-6686 (office)
