First Quarter Update on the Real Estate Market in Red Bank and Shrewsbury

Last week we looked at the 4 key objective, measurable real estate indicators and compared the annual statistics (2011 vs. 2010) for Red Bank and Shrewsbury. This week we’re going to see what the 4 key real estate indicators looked like at the end of the first quarter of 2012. Just as a review, those 4 indicators are:

1. Sales Activity (Demand) - How many properties sold in the 2012 quarter compared to the same quarter in 2011). If sales are increasing, prices are likely to increase as well; if sales are declining, prices may continue to decline.

2. Listing Activity (Supply) - The number of homes for sale in your area. If the number is increasing using the same year-over-year comparison as above, prices are likely to drop to absorb the additional inventory; if the inventory is dropping, it may not be long before prices increase.

3. Months’ Supply of Homes for Sale (Absorption Rate) – A calculation of the number of months it would take to sell the current supply of homes if home sales continue at the present rate. A “normal market” is usually 5 - 7 months for average priced homes, and tends to increase as you move into the higher price ranges. We’ve been in a “buyer’s market” (greater than 7 months) for the past few years. If the supply is trending back to the 5 -7 months average, home prices may be increasing.

4. Average or Median Sales Price (Value) - The prices of homes sold last year/quarter compared with the previous year/quarter. If prices have dropped, they may continue to drop in the future. If prices have stabilized or have started to increase, an increase in the future may be at hand.

Here are the data for the first quarter:

  Town             Year     Sales    Active Listings   Months’ Supply         Average Price  Median Price

Red Bank         2012      9                   48          13.8 months               $   405,888      $   363,000

                        2011     12                   52          25.3 months               $   379,291      $   370,000

Shrewsbury      2012     10                  21        6.2 months                  $   389,638      $   348,000

                         2011      5                   26        9.3 months                  $   407,980      $   365,000

Monmouth       2012    822             3,755        14.0 months                $   443,881      $   345,000

County             2011    729             3,411        13.7 months                $   438,784      $   359,000     

(Data believed to be accurate but not guaranteed)

Positive signals are indicated in bold font and negative signals are indicated in italic font; if neither bold font nor italic font was used, the numbers were too close to be statistically significant.

 For Monmouth County as a whole, there were both more sales (positive) and more listings (negative), with little change in the other 3 indicators. Not that many single homes sell each month in Red Bank and Shrewsbury, and I always hesitate to come to any conclusions if we’re talking about less than 20 sales. Therefore I don’t put a whole lot of faith in the Red Bank or Shrewsbury indicators thus far this year, so I haven’t put anything in bold font or italic font. I’ll keep you up to date every month as more Red Bank and Shrewsbury homes are sold and the year-to-date data grow.

-Len