According to the most recent (February) S&P/Case-Shiller home price index, nationwide home prices are 12.9% higher than a year ago. In Manalapan, however, the median home price is “only” up 6% compared to one year ago. If you’re a Manalapan home owner you’re probably wondering what’s going on with the local real estate market.
The median sales price is one of 4 key, objective indicators I use to assess the local real estate market. When the median price goes up, it’s good news for home sellers but bad news for home buyers. The 2nd key indicator is the number of sales. Year-to-date, 3% more Manalapan homes have sold compared to the same period in 2013. More sales normally predict higher prices in the near future.
The number of Manalapan homes listed for sale declined 18% (fewer listings normally predict higher prices and more listings normally predict lower prices).
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The last bit of good news for Manalapan home sellers is that the real estate absorption rate is 4.1 months now, compared to 5.8 months a year ago. The real estate absorption rate is a calculation of how many months it would take to sell ALL of the homes currently listed for sale, assuming that homes continue to sell at the same rate that they have in the past 12 months. It takes into account both supply (i.e., inventory) and demand (i.e., sales). An absorption rate of 5 – 7 months is considered a “normal market”, whereas greater than 7 months is considered a “buyer’s market” and less than 5 months is considered a “seller’s market”. The absorption rate tells us that Manalapan was in a “normal market” a year ago, but now is in a “seller’s market”.
Here are the 4 objective real estate indicators in tabular form:
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Manalapan Home Sales, Jan 1 - Apr 30
2013 2014 Comment
Sales (Demand) 61 63 3% more homes sold.
Listings* (Supply) 131 107 18% fewer homes on market.
Months' Supply* 5.8 4.1 Stronger demand vs. supply.
*based on the past 12 months
Median Sale $ $445,000 $470,000 6% higher median sales price.
If you’re a Manalapan home owner, all 4 objective real estate indicators are pointing to higher home prices in the near future. You know what your home is worth for property tax purposes. That number may or may not reflect a home’s current market value; that’s the amount an informed buyer is willing to pay an informed seller. If you’ve been thinking of selling your home, I’d be glad to give you a free comparative market analysis estimating what your home would sell for in the current real estate market. No obligation, of course.
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
