At the end of eight months, Fair Haven single-family home sales volume is up by 13 percent, and the median selling price is about the same as it was a year ago.
It’s surprising that home prices aren’t increasing, since the combination of more sales, fewer homes on the market, and a shorter real estate absorption rate normally predict higher selling prices.
Here are the numbers in tabular form:
Fair Haven Home Sales, January - August 2012 (eight months, year- to-date)
13 percent more sales
19 percent fewer listings.
Months' Supply (absorption rate)
Still a "normal market" (5-7 months)
Average Sale $ (value)
5 percent lower average sales price
Median Sale $ (value)
1% lower median sales price.
As I’ve explained in previous posts, using the median sales price is better than using the average sales price as an indicator of the real estate market.
The median is the point at which 50 percent sold for more and 50 percent sold for less, whereas the simple arithmetic average can be skewed by one or two outliers.
Fair Haven home prices have remained stable for the past three years, with an eight month year-to-date median sales prices of $660,000 in 2010, $665,750 in 2011 and $662,000 this year.
You may view this price stability as either being a good or bad thing. On one hand, Fair Haven homes have retained their value, and Fair Haven home prices are still significantly lower than they are in Rumson.
On the other hand, if you bought your home three years ago, you haven’t seen any appreciation on its value.
Let’s put the past three years in perspective. If we look back 10 years (to 2002), the eight month year-to-date median home price in Fair Haven was $400,000.
Had you bought a home at that time, you’d have a lot more equity in your property. What will the median home price be 10 years from now? No one can say for sure, but historically real estate has increased in value between 3 and 5 percent per year.
Isn’t it possible that we may “make up” the 9 to 15 percent increase that historically would have happened in three years? No one knows for sure, and we might have three more years of stable prices.
However, with the massive increases in the money supply over the last four years, my personal prediction is that renewed inflation will force home prices higher, regardless of who wins the upcoming presidential election.
Leonard “Len” Dunikoski
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760
(732) 239-0739 cell (732) 530-6686 office