Al's July Market Watch
Recent research from the NJ Association of Realtors (NJAR) parallels recent postings in my Market Watch indicating NJ home prices are still on the increase, and that this trend is not likely to change over the summer. However, around the country and in some NJ areas, markets are moving toward a more middle ground between buyers and sellers, meaning the available supply of homes is moving toward 5 to 6 months versus the 3 to 4 months that we have seen in the recent past. According to NJAR month’s supply of homes in NJ is around 5.3.
In some of our local areas, this is still not the case. Bridgewater’s inventory actually dropped from 191 available homes down to 172 in June, and with it the month’s supply of available homes also decreased from 3.47 months to 2.32 months. Hillsborough’s inventory rose from 153 to 155 homes, and its month’s supply of available homes decreased from 3.83 months to 2.87. In both areas, sales are increasing faster than new listings, causing the drop. In both Bridgewater and Hillsborough, sales increased by 35 percent.
Branchburg, however, saw its month’s supply increase from 2.68 months to 5.31 months, a large jump. That was caused by a large increase of homes coming on the market, from 67 homes to 85 homes in June and a drop in overall sales. Sales decreased by 36 percent. Have to watch what next month brings.
Despite the issue of rising prices and affordability, NJAR indicats that buyers are still out in force. Locally, open houses are still well attended and homes priced right are being snapped up quickly. Key factors in continued buyer activity are higher gains in wages and a decrease in interest rates.
In May of 2016 the median sale price for a NJ home was $280,000, increasing to $283,000 the following year. For 2018 the median price was $289,000 and for May of 2019, a significant jump to $310,000. Over this period homes increased by 10.7 percent. Locally, the median price of a home in Bridgewater during the past year was $481,000 Branchburg $451,000 and Hillsborough $405,000.
The Importance Of Pricing A Home Correctly
An analysis of the last three months of sales for Bridgewater and Branchburg show that pricing a home correctly from the start usually means a quicker sale, a shorter time on the market and a higher sale price to list price ratio (SP/LP). In Bridgewater, homes that were under contract in less than 30 days had an average DOM (days on market) of 14 days and a sale price to list price ratio of 98.3 percent. In Branchburg, DOM was also 14 days with a SP/LP ratio of 101.4 percent. For listings that were on the market between 31 and 90 days, the DOM for Bridgewater was 52 and the SP/LP decreased to 95.8 percent. Branchburg experienced the same, with the DOM increasing to 52 days and the SP/LP ratio decreasing to 95.5 percent. When the listings exceeded 90 days, the average DOM for Bridgewater was 176 days and SP/LP was 88.9 percent. Branchburg’s were 181 days and 92.2 percent.
The lesson here is to price the home correctly from the start to receive the greatest gains.