Single-family home unit sales in Monmouth County, NJ, were up 50% in June relative to the year before (650 homes sold vs 435) - a remarkable increase and hopefully a promising indicator of market improvement. Interestingly, June's figures were an even bigger increase from May - 94%!
Upon seeing this I thought, "Well of course it means that the prices must have been really low..." but the median sale price actually went up by 6%! (from $385,000 to $408,500)... also good news.
And while current inventory is slightly higher than this time last year, the absorption rate is way down due to the number of homes sold... currently there is only about 7.5 months of available inventory. That means that at the current rate of home sales, if no additional homes came on the market, it would take 7.5 months to sell out everything. You may think that sounds like a long time but that's the lowest it has been in at least four years! (Our MLS only provides stats for previous four years so I can't confirm the last time it was that low.)
The next question is "why"? Was it due to the expiration of the First-time Homebuyer Tax Credit (which also provided tax credits for some non-first timers as well)? The original expiration date of June 30 was extended by Congress in the 11th hour for those already under contract because there were so many transactions that needed to be closed and not enough time to get it all done. Banks, title companies, attorneys... many were backed up and couldn't get things closed by the deadline.
So the sales jump was certainly due at least in part to this incentive but many agents I've spoken with reported very little if any impact from the tax credit. I had one client who qualified and was able to close in time but the incentive was not the overriding factor in making an offer (but welcome nonetheless). Similarly, I have other clients who would have qualified but they were not interested in making an offer on something simply to get the credit... they still had to find the "right" house. And haven't. Yet. (Hope springs eternal for us realtors...)
In re-examining last year's sales, the trend was an increase in sales that began in May and really kicked in in June - October. I'm hopeful that we may see a similar trend this year as prices remain attractive (relatively flat overall for the past 24 months) and the mortgage interest rates are great.
So if prices aren't going down and money is cheap... isn't NOW a great time to buy?
Stay tuned...
