If you’ve been following my posts you know that there are four (4) key, objective indicators for real estate: number of sales (demand), number of listings (supply), price and absorption rate.
Let’s start with the number of sales. At the end of the 3rd quarter, the sales of single-family homes in Manalapan increased 9% compared to last year. The number of sales is an indicator of demand: more sales tend to drive prices higher, whereas fewer sales typically predict lower future sales prices.
Next is the number of listings. Manalapan has had a low inventory (i.e., supply) of homes on the market all year. As of the end of September there were 20% fewer listings than a year ago. Fewer listings normally result in increased prices, while more listings tend to push prices up since would-be buyers have more houses to choose from.
Find out what's happening in Manalapanwith free, real-time updates from Patch.
The 3rd key indicator is price. To me, the median is the best way to look at sales prices, but some REALTORS® use the average sales price instead. As of the end of September, the median single-family home price in Manalapan was 8% higher than it was a year ago, and the average price was up 7%.
Finally, the 4th indicator is the real estate absorption rate. This is a calculation of how long it would take to sell all the houses that are currently listed for sale, assuming that homes continue to sell at the same rate as they have during the past 12 months. The absorption rate is important because it takes into account both demand (#1 above) and supply (#2 above). If you remember my previous posts you know that REALTORS® consider an absorption rate of between 5 and 7 months to be a “normal market”, whereas more than 7 months is a “buyer’s market” and less than 5 months is a “seller’s market”. A year ago the Manalapan absorption rate was 6.9 months (a “normal market”) and now it’s 4.7 months (the first time this year that it’s been a “seller’s market”).
Find out what's happening in Manalapanwith free, real-time updates from Patch.
Here are Manalapan’s September 30th year-to-date numbers in a table:
Sales: 209 in 2012, 228 in 2013 (+9%)
Listings: 147 in 2012, 117 at the end of September 2013 (-20%)
Median Sales Price: $440,000 in 2012, $475,000 in 2013 (+8%)
Average Sales Price: $471,313 in 2012, $504,360 in 2013 (+7%)
Absorption Rate: 6.9 months in 2012, 4.7 months now (stronger Demand vs. Supply)
The bottom line is that all 4 of the objective indicators are predicting higher prices in the near future.
If you’re thinking of buying a house in Manalapan and find something you like, remember my advice: DON’T CALL THE LISTING AGENT (even if it’s me)! The Listing Agent works for the Seller, and has a fiduciary responsibility to negotiate the highest price. Instead, get a REALTOR® who will work only for you (i.e., a Buyer’s Agent) and who will negotiate the lowest price.
Real estate is fairly quiet from November until February, with fewer homes on the market and fewer buyers actively looking. However, serious buyers and sellers tend to be more motivated during this time of the year, so don’t assume that the market’s not worth while at this time. Call or text me if you’re thinking of buying or selling. Remember, a sale takes place when an informed seller and an informed buyer agree on a price. I’ll keep giving you monthly updates on Manalapan real estate.
Note: I wrote this article; these are my personal views and do not necessarily reflect the views of Diane Turton, Realtors.
Len
Leonard “Len” Dunikoski, GRI
REALTOR® Associate
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760
(732) 239-0739 (cell) (732) 530-6686 (office)
