Red Bank Home Prices Fall While Condo Prices Rise

The Red Bank real estate market is looking different for single-family homes and for condominiums. After 8 full months, the only thing they have in common is fewer sales compared to the same 8-montgh period last year. Let’s first take a look at single-family homes.

Red Bank Single-Family Home Sales, January - August (8 Months Year To Date)

    2011

    2012

            Comment

Sales (Demand)

     30

     40

33% more homes sold.

Listings (Supply)

     58

     42

28% fewer homes on market.

Months' Supply (Absorption Rate)

    15.9

    9.9

Improved supply vs. demand (normal market = 5-7 mos.)

Average Sale $ (Value)

$425,516

$387,400

9% lower average sales price.

Median Sale $ (Value)

$377,500

$332,500

12% lower median sales price.

 Looking at the 4 objective indicators for real estate, we see that 33% more single-family homes sold, and there were 28% fewer single-family homes listed on the market. When we get this combination of more demand and less supply, it tends to predict higher prices, but that’s not what we’re seeing. Median single-family home prices have actually dropped by 12% (the median is the point at which 50% sold for more money and 50% sold for less money).

Now let’s compare this to the Red Bank condominium market.

Red Bank Condominium Sales, January - August (8 Months Year To Date)

    2011

    2012

            Comment

Sales (Demand)

     32

     24

25% fewer condos sold.

Listings (Supply)

     39

     38

3% fewer condos on market.

Months' Supply (Absorption Rate)

    12.0

    12.7

Supply vs. demand stable.

Average Sale $ (Value)

$253,921

$277,416

9% higher average sales price.

Median Sale $ (Value)

$192,500

$267,500

39% higher median sales price.

With approximately the same number of Red Bank condominiums on the market, 25% fewer condominiums have sold this year compared to 2011, and the median selling price has increased a dramatic 39%! The increase in Red Bank condominium prices is significant, because condominium prices have actually dropped significantly in some nearby towns (such as Tinton Falls).

Condominiums are an attractive choice for first-time home buyers, seniors who are down-sizing, and others who don’t want to worry about exterior maintenance or who’d like access to common areas such as a pool, tennis courts or a clubhouse.

 A big factor for condominium resale pricing is whether or not a particular condominium association is approved for FHA low-down-payment mortgage loans. If a condominium is not eligible for an FHA mortgage, fewer potential buyers are interested and prices tend to go down. FHA eligibility depends on having delinquent condominium association payments being below a certain percentage and non-owner occupancy below a certain percentage.

If you’re the current owner of a Red Bank condominium, your unit is probably worth more today than it was a year ago, and you should have no trouble selling it in the next few mnonths to a year if that’s your intention.

Len

Leonard “Len” Dunikoski

REALTOR Associate

Diane Turton Realtors – Rumson Office

8 West River Road

Rumson, NJ 07760

(732) 239-0739 cell     (732) 530-6686 office

ldunikoski@dianeturton.com