A reader of the first part of this article asked me to compare this year’s Fair Haven home sales prices to those of 2005-06; or to show how prices have trended over time since then. Here are his/her comments:
Len, it would be interesting for you to compare this year's numbers with 2005/2006 or show the trend over the years. I think alot of people have just given up even trying to sell there home in this poor economy. And many people CAN'T even try, because they're under water, and would have to take a huge loss.
Len, here's the 2005 data:
81 homes sold in the Jan-Aug period...so FH is still way down.
Avg price was $748K, so versus your $689K number now, that's pretty dismal, too.
I know realtors love to show things are looking up!! But it seems obvious that the only reason why sales likely ticked up a tad is because prices are continuing to trend DOWN. Happy buyers, sad sellers.
My response ...
I’ve lived in Fair Haven for over 30 years, so I have more than an academic interest in what’s happening to home prices in our town. We’ve had our ups and downs, but in the last few years real estate prices have been remarkably stable.
In a small town like ours, the median price (i.e., the price at which 50 percent of the homes sold for more money and 50 percent sold for less money) is a better indicator of the real estate market than the average price.
This is because a few “outliers” (i.e., sales for much higher/lower than the median) can really distort the calculated average.
Let’s look at the median Fair Haven sales prices for each of the past six years:
Median Sales Price
These are prices for the entire year, Jan. 1 to Dec. 31. Since the 2012 eight-month median sales price is within 1 percent of last year’s at this time, it’s reasonable to expect that the 2012 year-end median will be very close to what it was for 2011.
When I look at these numbers I see a remarkably tight range, with no trend either down or up.
I wish I could show you the numbers in a graph so you could see what I mean. There shouldn’t be very many people who are “under water," assuming that they didn’t pay way over market price when they bought their homes.
No one in Fair Haven should have given up on selling their home. There are buyers out there who’d love to live in a great town like Fair Haven, but they’re savvy buyers and they aren’t going to pay above-market prices.
As is always the case in real estate, while the buyer is trying to sell their home for the highest price, the seller is trying to buy the home for the lowest price.
That’s why it’s important to know the local market thoroughly, so that when you do a comparative market analysis you’re comparing recent sales, and comparing “apples-to-apples."
I give my clients as much objective data as possible, including price per square foot, number of bedrooms, baths, half-baths, fireplaces, garage spaces, etc.
I have that information in an Excel spreadsheet for every Fair Haven home that sold this year, and you definitely can see differences in four-bedroom homes vs. three-bedroom homes vs. two-bedroom homes.
The picture is also obviously different for waterfront vs. non-waterfront, newer home vs. older home and small lot vs. large lot.
SmallTownAntics, I hope this addresses your concerns. I’d be glad to talk about this with you over a cup of coffee, and I’ll be glad to change my mind if you show me some key information that I’ve overlooked.
Leonard “Len” Dunikoski
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 0760
(732) 239-0739 cell (732) 530-6686 office