Somerset County’s only Monthly Real Estate
Market Conditions Update for January 2013
Somerset County December sales remain active with 206 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 December of 2012 show an overall current months’ supply of eight months (down two from last month) 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 69% of this total with an average of 7 months’ Supply
- Sales between $500,000 and $1 Million were 26% of this total with an average of 6 months’ Supply
- Sales over $1 Million were 5% of this total with an average of 15 months’ Supply putting further pressure on pricing in these upper price points.
Overall, we recorded 206 properties going under contract in December in Somerset County.
Five areas in Somerset County reported 2 sales or less at all last month:
- Far Hills
- Raritan Boro
- Rocky Hill
- S. Bound Brook
These five areas accounted for under 2% of our total sales.
At the same time, there are several hot spots:
- Bernards Township with 23 sales
- Bridgewater Township with 36 sales
- Franklin Township with 32 sales
- Hillsborough with 21 sales
These four areas accounted for 54% of our total sales last month.
New listing came on the market on to the market in December at an average of $453,500 while the average list price for those going under contract in that same month was at nearly $435,000, or about 4% less. Average days on market for the 171 properties going under contract was 111 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:
November sales in NJ were unchanged over a year ago mainly due to hurricane Sandy. Yet YTD sales as of November were up 22% over the prior year.
And, the decline of available inventory continued in November adding up to a 21% decline YTD vs. the over the prior year.
The combined effect of the increase in purchase demand he decline in available inventory will likely result in home prices remaining stable to increasing in the second half of 2012 and will also will vary by local market (eg. the counties closer to NYC usually faring better).
In Somerset County this has resulted in the 7 months’ supply of houses on the market that we currently experiencing.
On a national basis, the extension of the mortgage interest deduction and the mortgage debt forgiveness on short sales should help as well.
Interest rates remain at the lowest levels that we have ever seen and are under 3.5% (and dropping) for a 30 year conventional mortgage. A fifteen year conventional mortgages are now in the upper 2% range.
New Jersey Job Front:
The US pace of job creation remained fairly stable in November adding 146,000 jobs in the private sector. While this is far below the estimated that over 200,000 are required per month to sustain growth abd lower unemployment, it is still an improvement over the 66,600 average which was gained in 2Q.
At the same time New Jersey private sector jobs saw a net loss in November of 8,100 jobs with much of the effect resulting from hurricane Sandy. Also, NJ is projected to lag behind the nation in this critical area for the foreseeable future.
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 moratorium 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 November foreclosure filings in the state rose 236% vs. the same period last year. That is more than double the year before.
And, Gov. Christie has signed a bill that will allow lenders to foreclose more quickly on vacant and abandoned properties. With about one-third of the states delinquent properties in this category, this will surely have an impact as we could see sherif’s sales in as little as two months in the near future.
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 171 of the approximately 1,747 properties listed in Somerset County giving us an overall months’ supply of ten.
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.
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.