Monmouth County NJ - Inventory vs Sales

Comparing the fourth quarter of 2008 with the fourth quarter of 2007 shows average days on market is slightly higher than this time last year.  Inventory is slightly higher than this quarter last year and number of sales are significantly lower.  Median home prices have also declined, by about 10% in the last year.

2008 vs 2007 Sales Compared

We are currently at almost 17 months of inventory. This means that at the current rate of sales it would take 17 months to sell off the current inventory.  We are not at the bottom yet. 

For a detailed analysis of your town, contact me.

Sales are on the decline after being on the rise for the first half of the year, this is a normal seasonal trend, but shows no sign of a market turn around.

Days on marking is hovering around 94 and we are currently at 14 months inventory. This means that at the current rate of sales it would take 14 months to sell off the current inventory.

The conclusion is that prices are still coming down, so if you are planning to buy this is a great time because interest rates are also low.

If you have to sell, you will need your home to be in good condition and at a lower price than the competition.

Call me and I will help you figure it all out and get the best price in today’s market in the least amount of time, with the least amount of hassle.

*Data is compiled from Monmouth Ocean MLS.

First the good news: The number of home sales in Monmouth County has been steadily rising throughout the first half of 2008, but sales still lag behind those for the previous 6 months.  Even so, this is still good news.  We need sales to increase to reduce supply.

In addition, the Days on Market of houses that are selling has gone down slightly.  This could be related to a number of factors including:  more realistic pricing, and/or more buyers who are motivated to buy.

The bad news is that prices are still declining and inventory is still rising so the competition is increasing rapidly.  Only the homes with the best value are selling.  Buyers want more for their money (more features, more space, better condition).  If you are a seller you need to price your house so it is giving the buyer more than the comparable houses, for the same money, or if both houses are equal, your price needs to be lower to get the buyer to see value and choose your home.

Current inventory is the highest since August 2006, a staggering 4900 single family homes on the market in Monmouth County as of June 30, 2008.

Buyers are in a market of opportunity, but it won’t last forever.  With interest rates low and prices down, now is the time to buy.  When rates go up, the window of opportunity will close for many buyers.

Remember, if you want a copy of my market report for your town or would like a printable copy of these charts contact me through my agent website (link above.)

Data is complied from the Monmouth Ocean MLS. 

Let’s say you can buy the house you want today for $400,000, you have a 20% down payment ($80,000) and you can get a loan at 6%.  Your mortgage amount would be $320,000 and your payment would be $1919.

You feel that the price of the houses will go down, so you wait.  Say a year from now the price goes down by 4%, which brings our example house down to $384,000.  You put the same $80,000 down and your mortgage will be $304,000.  But rates have risen and you get 6.5%, your payment is now $1921.  You will actually be paying a higher payment for the same house that you could have moved into a year ago.

Wait another year and it is even worse.  A rise in interest rate always makes a bigger difference in your payment than price.

So don’t wait, buy now.  Your new home is waiting for you.

Some highlights:

The median sale price for an existing single-family home in Monmouth, Ocean, Middlesex and Somerset counties was $385,100, down 0.1 percent, or $200, from $385,300 in the same quarter last year, the National Association of Realtors reported Wednesday. The median means that half of the homes sold for more, the other half for less.”At best we are stagnant in the market,” said economist James Hughes, dean of the Edward J. Bloustein School of Planning and Public Policy at Rutgers University. “The market is really a weak one, and it is likely to remain weak for an extended period of time.”

Looks like we are in for the long haul. Sellers, if you need to sell you need to get an accurate comparative market analysis (CMA), your house needs to put on its Sunday Best (declutter, remove personal articles: photos, non-neutral art), paint in neutral colors, get a stager (I know a great), and then price below the competition.

You would think as an investor, I would not be susceptible to these things. I should be looking at this from a purely business perspective. I am trying, but I am struggling. The problem my husband and I have is that if we go much lower we will have lost money on this house that we so carefully remodeled to resell. Ouch.

I ran the numbers, I looked at the comparable properties and I still think compared to other homes it is priced well. But in the small town it is in, it is entirely possible that the whole town is overpriced. Other homes have also lowered there price, but with none selling.

As Jeffrey Otteau of Otteau Valuation Group, Inc in East Brunswick, NJ says, one of the “undesirable effects of Over Pricing is that marketing time becomes extended, which serves to delay the sale, eliminates all sense of urgency and will eventually lead to price reductions.” Otteau offers workshops for real estate professionals with market forecasts and other helpful topics.

I have heard this from Jeffrey a number of times, and my broker has coached me. I know that the best way to price a house is what Jeffrey Otteau calls “right pricing”. You set you price lower than the competition and you will end up with a faster sale and a higher price. It is tough to swallow, but studies show it to be true.

So did I practice what I preached? Not too well. What will I do? I will make another price reduction on Monday. Check back here for the closing party when I sell it.

After bottoming in the fourth quarter of 2006, existing-home sales are forecast to gradually rise through 2007 and into 2008, while new-home sales should turnaround by summer, according to the latest forecast by the National Association of REALTORS®.

David Lereah, NAR’s chief economist, said annual totals for existing-home sales will be fairly comparable between 2006 and 2007. “We have to keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation,” he said. “We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it’ll be pretty much of a wash in terms of annual totals. The good news is that the steady improvement in sales will support price appreciation moving forward.”

Source: realtytimes.com

Good ole David Lereah, bringing us some good news. We can be optimistic about the future, but we must be realistic about pricing. Sellers listen to your Realtor. Price realistically. That means price low. Your agent should show you closed sales and also show you which houses are in competition with yours. You also need to get your house ready for sale. Declutter and maybe get a stager.

I will be posting on staging soon, but it you want more info now, contact me.