If you live in Holmdel or if you’re thinking of buying a home there, you need to know what’s happening to the local real estate market. Sure, most people want to know about home values, but sales prices are only one of the 4 key objective indicators that REALTORS® use to evaluate the real estate market.
The other 3 indicators are the number of home sales (demand), the number of homes on the market (supply) and the real estate absorption rate (an indicator of the relationship between demand and supply). Here’s a comparison of the 4 indicators for single-family home sales in Holmdel in 2012 compared to 2011:
Holmdel Home Sales, January 1 - December 31
2011 2012 Comment
Sales (Demand) 107 151 41% more homes sold.
Listings (Supply) 98 86 12% fewer homes on market.
Months' Supply (Absorption Rate) 12.0 8.4 Increased demand vs. supply.
Note: this is based on the latest 12 months Median Sale $ (Value) $712,000 $653,250 8% lower median sales price.
If you’re interested in home values, the bottom line is that the median Holmdel home sales price was 8% lower (the median is the price at which 50% of the homes sold for more money and 50% sold for less). That’s a bit of a surprise in that more homes were sold in 2012 and fewer homes are on the market; normally that combination results in higher prices, not lower.
In addition, the change in the real estate absorption rate is pointing to higher prices. Bear with me, because the absorption rate is important. It’s actually a calculation of how long it would take, in months, to sell all of the houses that are currently listed for sale, assuming that homes continue to sell at the present rate (I use the rate for the past 12 months to account for seasonal changes in the number of sales). When the absorption rate is more than 7 months, we’re said to be in a “buyer’s market” and when it’s lower than 5 months we’re said to be in a “seller’s market”. At the present rate (8.4 months) we’re still in a “buyer’s market”, but much less so than we were a year ago.
What does this mean for you? To me it says that if you’re looking to buy a home in Holmdel, this might be a good time to do it. More sales, less inventory, and a shorter absorption rate objectively all point to higher prices in the future. Unfortunately we can’t say how much higher or how soon in the future. Each month I’ll keep you up to date on what’s going on. If you’d like more information about Holmdel real estate, text or call me.
Leonard “Len” Dunikoski, GRI
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760
(732) 239-0739 (cell) (732) 530-6686 (office)