According to the most recent (February) S&P/Case-Shiller home price index, nationwide home prices are 12.9% higher than a year ago. Nearby in Fair Haven, home prices are up 19%, but in Rumson they’re down 2%. So what’s happening in Red Bank?
If you’ve been following my posts you know I don’t calculate any year-to-year percentage changes until there are at least 20 home sales in both years; calculations based on fewer than 20 data points are not considered statistically significant. Red Bank is a small town, and even after 4 months we’ve had fewer than 20 single-family home sales, so I’m only going to give you the raw data. From January 1st to April 30th, the median sales price was $358,000 this year and $290,000 last year.
The median sales price is one of 4 key, objective indicators I use to assess the local real estate market. When the median price goes down, it’s good news for home buyers but bad news for home sellers. The 2nd key indicator is the number of sales. Year-to-date, 9 Red Bank homes have sold compared to 18 in the same period in 2013. Fewer sales normally predict lower prices in the near future (but remember: don’t draw any conclusions based on fewer than 20 sales).
Find out what's happening in Red Bank-Shrewsburyfor free with the latest updates from Patch.
The number of homes listed for sale declined from 32 to 29, and that’s based on a 12-month average so that indicator is down 9% (fewer listings normally predict higher prices and more listings normally predict lower prices).
The other good news for Red Bank home sellers is that the real estate absorption rate is 5.4 months now, compared to 6.4 months a year ago. The real estate absorption rate is a calculation of how many months it would take to sell ALL of the homes currently listed for sale, assuming that homes continue to sell at the same rate that they have in the past 12 months. It takes into account both supply (i.e., inventory) and demand (i.e., sales). An absorption rate of 5 – 7 months is considered a “normal market”, whereas greater than 7 months is considered a “buyer’s market” and less than 5 months is considered a “seller’s market”. The absorption rate tells us that Red Bank was in a “normal market” last year, and now is still in a “normal market” but with stronger demand.
Find out what's happening in Red Bank-Shrewsburyfor free with the latest updates from Patch.
Here are the 4 objective real estate indicators in tabular form:
Red Bank Single-Family Home Sales, January 1 - April 302013 2014 Comment
Sales (Demand) 18 9
Listings* (Supply) 32 29 9% fewer homes on market.
Months' Supply* 6.4 5.4 Stronger demand vs. supply.
*based on the past 12 months
Median Sale $ $290,000 $358,000
If you’ve been thinking of selling your home in Red Bank you’ll probably get more for your home than you would have a year ago. If you’re a Red Bank home owner you know what your home is worth for property tax purposes. That number may or may not reflect a home’s current market value; that’s the amount an informed buyer is willing to pay an informed seller. If you’d like, I’d be glad to give you a free comparative market analysis estimating what your home would sell for in the current real estate market. No obligation, of course.
Len
Leonard “Len” Dunikoski, GRI
REALTOR® Associate
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760
