If you’re a Shrewsbury home owner or if you’ve been thinking about buying a home in Shrewsbury, there are 4 things you need to know about the current real estate market there. If you’ve been following my posts you already know what they are: they’re the 4 key objective, measurable indicators for residential real estate.
Here they are for Shrewsbury single-family homes at the end of 2012: (1) sales were up 50%, (2) listings are down 20%, (3) the median selling price was 29% higher, and (4) the real estate absorption rate says we’re in a “seller’s market”.
More sales and fewer listings normally result in higher sales prices, and that’s exactly what we saw this year. The median single-family home price was up by a whopping 29% compared to 2011 (the median is the price at which 50% of the homes sold for more money and 50% for less).
Here’s why we’re in a “seller’s market” in Shrewsbury: the real estate absorption rate. It’s VERY important because it’s an indicator of demand for houses compared to the supply of houses. It’s a calculated value, in months, of the time it would take to sell all of the homes currently on the market, assuming that homes continue to sell at the rate they have in the past 12 months. In a so-called “normal market”, the real estate absorption rate is between 5 and 7 months; numbers higher than 7 months indicate a “buyer’s market” and rates lower than 5 months indicate a “seller’s market”.
The present Shrewsbury real estate absorption rate is 4.0 months, and it was 7.5 months a year ago. In one year we’ve moved from being in a “seller’s market” to being in a “buyer’s market”! In fact, we’ve been in a “seller’s market” (absorption rate less than 5 months) since July. However, we’re still far from the peak $640,000 median sales price we saw in 2006. That’s why I expect buyers will be paying even higher prices for Shresbury homes in 2013. Here are all of the year-end numbers:Shrewsbury Single-Family Home Sales, January 1 - December 31
2011 2012 Comments
Sales (Demand) 32 48 50% more homes sold.
Listings (Supply) 20 16 20% fewer homes on market.
Months Supply (Absorption Rate) 7.5 4.0 At less than a 5 months since July.
Median Sale $ (Value) $372,500 $481,950 29% higher median sales price.
As a real estate professional, I look at the real estate market on a daily basis. The take home message here is that if you live in Shrewsbury and you’ve been thinking about selling your home, 2013 might be a good time to sell. I’d be glad to give you a free estimate of what your home is worth in today’s market. On the other hand, if you’ve been thinking about buying a home in Shresbury, you might want to start looking sooner rather than later. We know that mortgage rates will be staying low for the next year or so, but home prices may take a big jump. A 7% increase in the current median Shrewsbury home price works out to be $33,700; do you want to take out a $33,700 higher mortgage?
Leonard “Len” Dunikoski, GRI
Diane Turton Realtors – Rumson Office
8 West River Road
Rumson, NJ 07760
(732) 239-0739 (cell) (732) 530-6686 (office)