Middlesex County NJ Market Commentary - November 2011
Reporting period: October 2011
Source data is from the prof. Middlesex County Multiple Listing System database.
Calculated on Friday 11/11/2011.
Only includes residential homes within Middlesex County NJ (do not include condos, townhouses, adult commun., commerc. ...).
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Active Inventory
The Active Inventory also called current supply or unsold homes as tracked in the Middlesex County Multiple Listing System (MLS).
The Active Inventory as we follow it (Active homes for sale not under contract and not under attorney reviews) in October has slightly decreased to 3039 homes for sale in Middlesex County NJ after keeping on increasing following the industry seasonal effect and the local and national current trends. This number is only for residential single family homes in Middlesex County NJ and does not include condos, townhouses, multi dwellings, adult community, commercial real estate, etc…Also it may not include for sale by owners. It does not include either any type of Shadow Inventory. The inventory is 3.4% smaller than last month. Typically winter months have a lower inventory due to the seasonal effect and holidays (i.e many home sellers take their homes off the market during this season and wait for the spring market to relist, etc…) and the inventory rising with the spring market.
The shadow inventory is mostly made of foreclosed homes not yet listed on the market and also includes more subtle different types such as the “Accidental Landlords” and the folks who put their plans to move (retirement, etc…) on an indefinite temporary hold.…The oversupply and the shadow inventory especially in New Jersey is one of the concern leading many experts to expect a continuity of the down trend this year. Another 2 months and we will be able to release the stats for 2011. We expect a price decrease between 5-10% in average versus 2010 in most local markets in Middlesex County NJ. We will release the 2011 yearly stats and visual trends by the end of January 2012.
Pending Sales
Number of homes under contract, not including homes under Attorney Review. This is a newer statistic we are including in our monthly reports. Until now we always have been focused on Sold Homes data to calculate the average/median home prices, SP/AP, DOM and DOI. However Pending Sales because they are captured 1 to 2 month in average prior the Sold time stamp they do offer a more timely view of the market.
For the month of October we had 242 homes coming under contract (as tracked in the Middlesex County MLS). It represents an increase versus September (22.8%). We are not able to compare it YoY as we have not tracked this specific Middlesex County stat until recently.
Buyers per 100 Sellers
This represents the number of buyers per 100 sellers. It is calculated using the Active Inventory and the Pending Sales. This is also a newer Real Estate statistic we are introducing in our monthly Middlesex County market report. As time goes we will be able to trend it and better compare it. For the reported period (October 2011) we had 8 buyers for every 100 home sellers in Middlesex County, NJ which is an increase versus the previous month (6 buyers for every 100 sellers). This statistic also confirms our current soft market conditions and also reflects the industry seasonal effect.
New Homes Listed
For Middlesex County NJ, the number of new homes listed in October has slightly increased versus new homes listed in September (1.3%) (559 new homes listed in Middlesex County). Year over year it has decreased 12.1%. New homes listed keep on adding to the already extremely high supply.
Number of Sold Homes
In October, the number of sold homes was 284 and has increased 5.6% versus September. It is also up versus last year (247 or 15%). The monthly number of sold homes since the beginning of 2011 remains historically low and reflects the overall local slower market with very few “willing and able” buyers.
Median Sold Price and Average Sold price
The average (mean) sold price ($307,717) has decreased versus last month (-4.0%) and year over year the average sold price has also decreased -13.1%.
The median sold price ($270,000) has also decreased versus last month and decreased versus last year (-16.9).
Sold Price / Asking Price (SP/AP) Ratio
SP/AP ratio is 93.11% which also decreased versus September and versus last year. We can see very clearly the direction of the pressure on home prices. In average, sellers are negotiating and accepting offers at 93.11% of their last asking price. Please note that I mentioned "last asking price" and not "original asking price" which is very different and could take a few price reductions to get there if pricing is not properly set from the start. At the end the Sale of a home should really be considered as a business transaction and as such the various business decisions such as pricing be made in a knowledgeable fashion based on current and local data.
Days on Market (DOM)
Another real estate statistic is Days on Market or DOM which increased to 98 days versus last month and increased versus last year. A word of caution with this indicator as it is NOT a cumulative DOM. Meaning the clock re-starts with any new listing contract for the same home. Thus this statistic does not indicate to home sellers the average time on the market before going under contract. This is a good example of the better value of looking at those statistics, which is more in the trend analysis and local markets comparison than in a specific number at a specific given time.
Days of Inventory (DOI) or Absorption Rate
Days of Inventory (DOI) which is a derived number of the Active Inventory and Sold Homes has increased. At 332 days, it means it would take about 11 months to sell all existing inventory with no additional inventory coming on the market. A market with over 6 months supply would usually qualify as a buyer's market. A market with less than 6 months of supply would usually qualify as a seller's market. DOI does not take into consideration the shadow inventory.
That’s the end of our local market commentary based on Middlesex County NJ real estate statistics. As always, contact me if any questions.
Cathy Chaudemanche Team, Friday 11/11/2011
P.S.
In real estate as in business, what you don’t know can cost you! Whether you are selling your home, a first time home buyer or a seasoned investor, I can help you by providing you with the knowledge and facts you need to make sound decisions in our current and local markets. Read what others have to say, then when you are ready contact me-
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Piscataway real estate , Metuchen real estate, North Edison real estate, Fords real estate, Iselin real estate and Woodbridge real estate in greater Middlesex County, New Jersey.
Catherine "Cathy" Chaudemanche Team
Local Realtor Associate
NJAR Circle of Excellence Sales Award - 2009, 2010
Certified Luxury Home Marketing Specialist
Short Sales and Foreclosures Specialist
Agent Leadership Council
Keller Williams Elite Realty.
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