Somerset County’s only Monthly Real Estate
Market Conditions Update for November 2012
Somerset County October sales remain active with 266 homes sold
As a Somerset County Realtor, I publish this report on a monthly basis to provide information on Somerset County homes for sale including Somerville NJ and all other areas.
Statistics compiled at the end of October of 2012 show an overall current months’ supply of seven months for all of Somerset County in New Jersey.
You can see how these statistics are calculated here.
These statistics break down as follows:
- Sales under $500,000 were 74% of this total with an average of 6 months Supply
- Sales between $500,000 and $1 Million were 22% of this total with an average of 8 months Supply
- Sales over $1 Million were 4% of this total with an average of 11 months Supply putting further pressure on pricing in these upper price points.
Overall, we recorded 266 properties going under contract in October in Somerset County.
Four areas in Somerset County reported 2 sales or less at all in September:
- Bound Brook
- Far Hills
These four areas accounted for only .5% of our total sales.
At the same time, there are several hot spots:
- Bernards Township with 43 sales
- Bridgewater Township with 42 sales
- Franklin Township with 49 sales
- Hillsborough with 29 sales
These four areas accounted for 61% of our total sales.
New listing came on the market on to the market in October at an average of $528,073 while the average sale in that same month was at nearly $420,299, or about 20% less. Average days on market for the 266 properties going under contract was 94 days.
When these numbers are broken down by price point, they look as follows:
While you could argue that some of these computations do not have enough statistics within them to be representative and are not only factor in measuring the market conditions for a specific area, in general they are a strong barometer of how a particular local market is doing.
Other conditions impacting this statistic, as recently reported by industry experts are:
Demand for home purchases increased in September by 23% vs. the same period last year. And, YTD this number is 24%. September was the 12th consecutive month of increases and there are no signs of a slowdown. Naturally, this varies by market and the markets closest to NYC have fared the best.
At the same time, unsold inventory in NJ has declined 16% in 2012 and has fallen to the lowest level since 2005 resulting in fewer choices in houses for sale.
The loss of homes from hurricane Sandy will also result in fewer home sales over the next few months followed by a surge of activity come spring.
The combined effect of the decline in inventory and the increase in purchase demand will likely result in home prices remaining stable to increasing in the second half of 2012 and will also will vary by market.
In Somerset County this has resulted in the 7 months’ supply of houses on the market that we currently experiencing.
Interest rates remain at the lowest levels that we have ever seen and are around 3.5% (and dropping) for a 30 year conventional mortgage. A fifteen year conventional mortgages are well below 3%.
New Jersey Job Front:
The US pace of job creation remained fairly stable in October adding 173,000jobs in the private sector. It is estimated that over 200,000 are required per month to lower unemployment.
At the same time New Jersey private sector jobs saw a net loss in October of 11,700 jobs. The majority of these were in the leisure sector due to Atlantic City which has continued to struggle.
This market continues being affected by two trends:
More restrictive mortgage standards are forcing younger age buyers to postpone their transition to home ownership until later in life than was previously seen.
And, many older age households are selling their homes and moving into rentals to close their gap in underfunded retirement plans which were affected by the recent economic downturns.
The lifting of foreclosure moratoriums and the recent settlement agreements between the states and the banks have resulted in increased foreclosure filings in New Jersey. In the three month period ending in September foreclosure filings in the state rose 151% vs. the same period last year. That is more than double the year before.
New Jersey has 60,000 foreclosures currently on the book waiting to be resolved.
As this is happening at the same time we are receiving the good news mentioned above, the strength in home purchases will hopefully be able to absorb some of this increased inventory. Yet, it could put increased pressure on prices and this will vary by area as well.
All of these factors combined are putting further downward pressure on NJ home prices.
One positive note is that interest rates are hovering around the 3.5% range and we did sell 266 of the approximately 1,942 properties listed in Somerset County giving us an overall months’ supply of seven.
Houses that are priced properly are selling. There is a current market for them with many active buyers. More than ever, you need to be working with an experienced agent who has a strong grasp if the market conditions specific to your local area.
I can share information on all of these statistics with you. Just call me at (908) 238-0118.
____________________________________________Note: The information presented is deemed accurate but not reliable or guaranteed. Reasonable precautions were taken in the preparation and presentation of this information to ensure accuracy, but the author assumed no liability for any actions taken based on this information. Some opinions expressed represent forecasts of economic conditions as the impact real estate values. All such information is solely conjecture and should be regarded as opinion only and not serve as the sole basis of any financial decision.