Westfield NJ Real Estate Market News…”What’s Happening Out There?”
With all of the news media reports about the ‘national’ economy, and the ‘national’ real estate market, it is very difficult to decipher exactly what that means for towns like Westfield. There really is no such thing as a “national” real estate market, as people who purchase homes in a community often work in that community, or within commuting distance. This means that they earn money locally, and usually spend that money locally. The national media often reports on national statistics, and while they can be helpful to uncover trends in the macro-economy, it is important to understand that the Real Estate market, and even the economy are highly localized, and can vary tremendously from one state to the next, or even one town to the next.
In this month’s Market News, I thought it would be helpful to share what’s happening now, while also comparing it to historical data, to illustrate how Westfield real estate has performed from its peak of 2005-2006 to the present. Whether you are buying or selling, or just live in Westfield, this information can help you better understand how the recent recession has affected the local picture.
**All information is taken from the Garden State Multiple Listing Service Statistics**
Here are some Westfield, NJ Real Estate statistics:
Year to Date 2009 (through November 30)
Active Listings: 2408
Closed Transactions: 276
Average Days on Market (DOM): 78
Average Sold Price: $686,876
Sales Price to List Price Ratio: 96%
These statistics don’t mean much unless compared with other periods in time, to see how the market is trending. So, let’s compare with the same period 2008
January through November 2008
Active Listings: 1530
Closed Transactions: 274
Average DOM: 77
Average Sold Price: $772,436
Sales Price to List Price Ratio: 96%
What does this mean? Well in looking at the averages, here are some factual conclusions:
-Average Sales Price declined by approximately 11
-Number of closed transactions remained almost the same
-Number of active listings increased by 57%
In summary, the average sales price in Westfield declined moderately in 2009. This can be attributed to the substantial increase in homes actively for sale over last year, but with no change in the number of closed sales. This means more supply, with the same demand, which leads to price decline.
Overall, 2009 has been much more of a buyers market in Westfield, especially in the price ranges between $650,000 and $900,000, but towards the end of this year, there has been a balancing of supply and demand, perhaps indicating the market is in a bottoming process. Home prices on average for first time buyers ($400,000 to $550,000 on average) have declined, but by less. This mirrors what happened in nearby Cranford in the same price ranges.
In fact, in the first time homebuyer range, the prices actually showed a slight increase at year’s end, because there was actually a short supply of these homes, resulting in many multiple offer situations.
Examining the numbers in more detail showed a steep decline in listings sold in January, February and March of 2009, as compared to last year, as this was the height of the financial crisis on Wall Street started by the collapse of Lehman Brothers in September of 2008. The fear and uncertainty in the economy at the end of last year, translated to less closed sales in the start of this year.
Here is one more comparison. When we compare the 12 months ending November 2009 data with key data from the peak of the market in the 12 months ending March 2006, here is how the 2009 market compares:
Number of Closed Transactions: Decline of 29% since peak
Average Sold Price to List Price Ratio: Decline from 98% to 96%
Active Listings for Sale: Increase of 124%
Average Days on Market: up from 53 to 76 days
What this means for Westfield is that while prices may not have dropped as rapidly or heavily as other parts of the country, the buyers have had much more inventory from which to choose. So homes are still selling, and selling well, as long as they are priced correctly, and priced better than the competition. In fact, homes that are priced competitively in Westfield are selling often with multiple offers. The difference between now and 2005-2006, is that if a buyer gets outbid on a home they like, or finds a seller who will not accept a fair offer, they will just move on, and wait until they see another one that is priced well, rather than make a bid on the next house available, or overpay because there is more selection, and less urgency
Here is another very important statistic, which is number of expired listings in Westfield which failed to sell:
2004 – 39 expired listings
2005- 65 expired listings
2006 – 106 expired listings
2007 – 112 expired listings
2008 – 128 expired listings
To help you understand what all of this means, here are some general observations when examining this data:
- Westfield sellers who price their homes competitively and at today’s market value will sell their homes successfully in approximately 75-83 days, for approximately 96% of list price
- Sellers who overprice their homes are 3 times more likely not to sell their home than at the market peak, and will likely stay on the market much longer.
- These numbers are averages only. Homes for first time buyers have been selling more strongly than “move up” homes, and the price declines in homes priced from $650,000 to $900,000 have been more severe than the less expensive homes. Be sure to get an accurate market analysis or appraisal before listing your home for sale.
- Westfield buyers will be purchasing their home today at anywhere from a 10-25% lower price than they would have had just a few years back, depending upon the price range of the home, and the neighborhood of the home they are buying. If a home is properly priced, there will likely be high interest, so offer fairly. If the home is not priced properly, use the comparable data to negotiate the best possible price.
- Westfield has remained a stronger market than many other local towns because of the strong school system, access to transportation, and limited “investment, or speculative” buying during the real estate boom. The primary driver of the market and prices going forward will be employment, both locally and in New York City.