Let’s look at how is real estate doing for the first 6 weeks of 2013.
Most people buy a house during the warmer months. As a result we never have a lot of home sales during the 1st quarter of the year. Because it’s like this, I track Under Contract figures. Under Contracts make much more sense to me. I’ve also found this to be a good forecast of the year ahead.
If you look at the number of homes in the New Jersey MLS that went under contract from Jan 1st through February 15th in 2012, you’ll find 604 units. For the same time period this year, it is 722 which is an astounding rise: 722/604 = 19.5% increase
It makes sense to go further and see if this is an isolated situation or if we really do have a robust market. Let’s take a look at the number of homes for sale versus the number of homes under contract.
Right now in the NJMLS we have 2,458 single family homes for sale and 1,079 under contract. 2458/1079 = 2.28 to 1 which is also quite a turn around. When you are at 2 to 1, it’s a seller’s market and we are esstentiall at 2.3 to 1 now. Not all that far away – not completely a seller’s market but no longer a buyer’s market. Only a few years ago we were in double digits with all towns at or above 10 to 1.
As long as we’re at it, let’s look at January sales data. According to the New Jersey MLS we’re up 13% this year – from 302 in 2012 to 340 in 2013. The average sales price is down from $400,000 to $375,000 but this doesn’t surprise me.
Single family sales data reflects not only pricing but also the mix of homes sold. If more lower priced homes are selling, then the average price will be lower. The coming June 1st tightening of FHA mortgages and the higher mortgage rates (closing in on 4% now), has created a lot of early buying in the under $400,000 market which is the most sensitive to this.
To answer the question “How is real estate doing?” we looked at the data which clearly demonstrates that 2013 is a strong year for Bergen County home sales.
