The year is half over, and it’s a good time to take an assessment of the local real estate markets. Yesterday we looked at Fair Haven, where the median price of a home increased 7% (to $725,000) compared to a year ago. In addition, 3 of the 4 key real estate indicators are negative for Fair Haven home buyers.
Today we’ll look at Rumson, where the data, though mixed, have some better news for home buyers. First let’s see the numbers and then we’ll asses them:
Rumson Single-Family Home Sales, January 1 – June 30
2014 2015 Comment
Sales 48 41 15% fewer homes sold.
Listings* 80 69 14% fewer homes on market.
Months Supply* 7.5 8.5 Weaker demand vs. supply. (Absorption Rate)
Median Sale $1,050,000 $1,075,000 2% higher median sales price.
*based on the previous 12 months of listings
Fewer home sales are good news for home buyers in that they indicate decreased demand, which tends to push prices lower. In addition to the percentage change, it’s significant that fewer homes sold in Rumson than in Fair Haven (in most years the opposite is true). The market appears to be weaker for the higher priced listings.
On the other hand, fewer homes on the market indicates lower supply, which tends to increase sales prices and thus is bad news for Rumson home buyers. With fewer choices available, a buyer can’t negotiate a lower price as easily as when more choices are available.
The real estate absorption rate is a calculation of how long it would take to sell all the houses on the market, assuming homes continue to sell at the same rate as they have for the past 12 months. There are two things to note about the absorption rate this month. First, an absorption rate of 5 – 7 months is considered to be a “Normal Market”, and over 7.0 months is considered a “Buyer’s Market”. A longer absorption rate is good news for home buyers, since it’s taking longer for homes to sell. Rumson’s absorption rate has been rising steadily since the end of 2014, and 8.5 months is longer than it was a year ago, so we’re in even more of a “Buyer’s Market”.
The last indicator is the median home price, which is 2% higher than it was a year ago. Any price increase is bad news for home buyers, but at the end of May, April and March, the median price was lower than it was a year ago, so I wouldn’t get too upset with this month’s number.
The 4 key indicators are evenly split: two are positive and two are negative. To me, I’d give a slightly higher emphasis on the 8.5 month real estate absorption rate and say that the Rumson real estate market is good for buyers right now. If you’re looking for a home in Rumson I’d be glad to show you everything that’s available in your price range. If you’re out of the area and can’t come to see a new listing personally, if I’m your Buyer’s Agent I’ll go photograph anything significant that isn’t shown in the listing photos. I also can do a video walk through for you, although it won’t be as polished as one that I’d make for a Seller. If you really want to buy a home in Rumson, I’ll do whatever it takes to see that it happens. Give me a call.