In our last look at Cranford NJ Real Estate at the end of March, I predicted that the 2nd Quarter Sales to "exceed" the 1st quarter sales. Seasonally, this is almost always the case, but with the first time home buyer tax credit in place through April 30, combined with historically low interest rates, and favorable pricing I expected an even greater surge in market activity.
As we complete the 2nd month of the quarter, it is quite apparent that the 2nd Quarter of 2010 will show a sizable spike in sales activity. In the entire 1st quarter, there were 29 closed sales in Cranford. So far in the 2nd quarter, there were 10 closed sales in April, 9 closed sales in May, and currently 43 listings under contract. This is a staggering number, as most of these properties will likely close before June 30, to comply with the tax credit requirements, thus more than doubling the number of transactions over the first quarter, and increasing 24 percent when compared to the same time period 1 year ago.
To illustrate with actual numbers
6 Months Ending April 2009
Closed Sales: 54
Avg Sales Price: $420,203
Avg Days on Market: 75
Month's Supply: 7 months of inventory. This means that if no new homes came on the market, it would take about 7 months for all homes to be sold at the pace of contract signings during that time.
6 Months Ending April 2010
Closed Sales: 79
Avg Sales Price: $406,689
Avg Days on Market: 73
Month's Supply: Approximately 4.8 months of inventory
Most Real Estate economists consider a 6 month supply to be a balanced market, with anything less than 6 considered a seller's market. You guessed it. That's why we had SO many multiple offer scenarios in Cranford and so many contracts quickly on some of these properties.
***SNEAK PEEK AT MAY*** - The pace of sales has slowed slightly, and at the pace of May contract signings, the inventory has gone to about a 6 month supply, assuming a few more go under contract before end of the month.
How does this affect you if you are a homeowner in Cranford, or looking to buy a home?
The trend right now is that the pace of sales is slowing, but not stopping. We are no longer in a hot seller's market as we were in March and April, but we are by no means in a buyer's market either. Because rates are so low, and prices remain favorable, there is a healthy amount of sales traffic, keeping the inventory fairly steady. If you are selling, you can still sell quickly, and for a price close to asking, but you may get 1 offer instead of 3 if you price your home correctly. If you overprice by more than a few percent, you will still have difficulty selling, because there are enough competing properties for sale in most price ranges.
If you are a buyer, you should still make an offer quickly if the home is priced right, but chances are the should be at least a little less competition for each property.
I expect June to still be a solid month for Cranford home sales, but as we enter the summer, the seasonal trends should hold, and transactions should decrease until September, when they will likely increase again. In terms of whether the prices will go up or down, it all depends on how many new listings come online, and how that affects the supply/demand curve. If we tick up to 7-8 months of supply, prices will dip again. If we remain at 5-6 months supply, prices should hold steady, or rise very slowly.
For more information about the market conditions in YOUR neighborhood, check out www.UnionCountyRealEstateMarket.com