Somerset County October sales active with 310 homes sold
(Below is a market update on the real estate and property activity in Somerset County – including Branchburg, Bridgewater, Somerville and Hillsborough– as of the end of October of 2015. This information is provided by courtesy of Somerset County Realtor Joe Peters.)
In October of 2015, 310 properties went “under contract” in Somerset County, down slightly from the 311 “under contract” properties in the prior month. Also 421 properties were newly listed during the same period. As a result statistics show an overall current supply of about 6 months (4 to 6 months is a normal market) for Somerset County, with an average of 76 days on the market for the units that were sold. Sales broke down as follows:
- 74 percent of sales were in houses under $500,000
- 22 percent of sales were in houses between $500,000 and $1 Million
- Only 4 percent of sales were in houses more than $1 Million
Two areas in Somerset County reported no sales last month:
- Rocky Hill
And only two areas in Somerset County reported 2 or less sales or less at all last month:
- Far Hills
At the same time, there are the usual hot spots:
- Bernards Township with 26 sales
- Bridgewater Township with 42 sales
- Franklin Township with 59 sales
- Hillsborough Township with 29 sales
These four areas combined for nearly 54 percent of total sales last month. The average new listing coming on the market last month was at nearly $594,000 while the average price of a unit going “under contract” was at nearly $416,027 or about 30% less.
Houses that are priced properly are selling. There is a current market for them with many active buyers. But more than ever, buyers and sellers need to be working with an experienced agent who has a strong grasp of the market conditions specific to your local area. I can share information on all of these statistics with you. Just call me at 908-238-0118. I can offer you knowledgeable and proven advice based upon my more than 20 years of experience, with a special emphasis on Somerset County. Meet Joe Peters (short video)
Other conditions impacting sales in our area are:
New Jersey Home Sales:
Home purchase demand increased in New Jersey during September, rising by 8,000 home purchase contracts 0r 17% as compared to one year earlier, which marks the 13th increase in a row and the largest increase in September since 2005.
Another encouraging statistic is that there was an increase of 17% by first time buyers. This is good news as the sellers will now be able to typically move up and buy larger houses themselves.
Current steady interest rates (combined with the fear of higher interest rates in the future) combined with the Fed’s slightly loosening lending standards seems to be driving the current market activity. This is projected to give NJ home prices a 3 to 4% rise in 2015 vs. about 1.5% in 2014.
At the same time, the number of homes being offered for sale in New Jersey, has remained low, but has recently decreased. The supply has decreased by some 1,400 homes vs. one year ago. Still, there are currently 19,000 fewer (-26%) homes on the market in New Jersey than there were at our peak in NJ in 2011.
The current level of unsold inventory state-wide is about 6.7 months’ supply (vs. 7.9 months a year ago).
The result this increasing demand and slowly decreasing inventory is the prices of homes has started rising again in many areas, and based on the above should continue to accelerate.
Interest rates are holding and are at about the 3.75% level for a 30 year conventional mortgage. A fifteen year conventional mortgages have crept up to the low 3% range. Five and seven year arms are in the very low 3% range.
The combination of fear of higher rates and slowly rising home prices is driving the current market. And, we have seen several industry experts state that the economy could support a 6 to 7% interest rate making you wonder what is coming down the pike. And, the Fed is already talking about an increase in rates (but has postponed it due to current stock market activity). Most industry experts are forecasting an upper 4% number for this time next year (which would decrease buying power by about 9%).
New Jersey Job Front:
On the national level the US reached full recovery in May of 2014 and is on pace to increase 2,400,000 non-farm jobs this year.
It should be noted, due to full-time and part-time jobs being counted equally by the BLS, these numbers are misleading. Actually, the US Economy still needs to create an additional 3.3 Million jobs to achieve the same employment situation that existed prior to the start of the recession.
NJ job growth increase by 4,700+ jobs in September after an increase of 15,000+ jobs being created in August. This would give NJ a good pace of recovery if it holds for the balance of the year. As a result, the state is on pace to recover 36,000+ non-farm jobs in 2015 and recover jobs lost in the recession by 2018 (4 years later than the national level) and has only recovered 68% of those jobs to date.
Rental Market Trends:
Restrictive mortgage standards have forced younger age buyers to postpone their transition to home ownership until later in life than was previously seen. The average age of our first time buyer is reported to have risen from 29 to 37 years over the past five years.
And, many older age households are selling their homes and moving into rentals to close their gap in underfunded retirement plans which were affected by the recent economic downturns.
The net result of these actions are continuing to cause rental prices to rise in New Jersey and keeping rental inventory extremely low (we currently have a 2.4% vacancy rate) along with rents continuing to increase.
NJ continues to face a very high foreclosure rate filings while other states have begun to, or already have recovered.
This figure varies widely by local market. It is also impacted greatly in areas hit particularly hard by hurricane Sandy (which was just about three years ago).
The percentage of delinquent mortgage loans in NJ has declined slightly to 8.1 percent (which is down from 10.8% two years earlier). This ranks NJ as number one in the country followed by NY with 6.6% and then FL, MI , ME, MD and RI. Nationally this number is just around 3.5%.
NJ is experiencing an increased rate in foreclosure filing while most states are seeing the reverse of this. In 2104 there was a 66% increase over the prior year and in 2015 it is on pace to add an additional 75,000+ filings. These foreclosures will add pressure to home prices (especially in areas where they are concentrated).
The positive news is that in a market starved for inventory, these foreclosures are now only selling at a small discount.
We still have fewer listing (but improving), an active buyer market for mid fall, stable to increasing prices in some of the most popular price points and steady interest + slightly loosening lending standards. The result is a mixed market based on location and price point, but very active for this time of the year. The foreclosures are to some extent helping to offset the fewer listings. As a result, prices have continued to rise..
Note: The information presented is deemed accurate but not reliable or guaranteed. Reasonable precautions were taken in the preparation and presentation of this information to ensure accuracy, but the author assumed no liability for any actions taken based on this information. Some opinions expressed represent forecasts of economic conditions as the impact real estate values. All such information is solely conjecture and should be regarded as opinion only and not serve as the sole basis of any financial decision.