Scotch Plains, Fanwood NJ Real Estate Market Report – November 3, 2009

 

In this report, we’ve included the comparison of 3rd quarter 2008 to 3rd quarter 2009 to see how SPF’s market is performing relative to a year ago.

 

Here are the raw numbers:

 

3rd Quarter 2009

 

Closed Sales: 101

Average Sales Price: $452,008

Average Days on Market: 66

Sale Price to List Price Ratio: 95.3 percent

 

3rd Quarter 2008

 

Closed Sales: 91

Average Sales Price: $504,572

Average Days on Market: 66

Sale Price to List Price Ratio: 96.5 percent

 

So what does this mean for homeowners and people considering a home purchase in SPF? Well, quite simply there are signs that the market continues to stabilize, but still will take some time to level out. The SPF market was considerably more active in Q3 2009 than one year ago. The number of transactions increased by 11 percent. However, it’s worth noting that the average sales price did still decline by 10 percent. This decline in price is due in large part to the supply of homes on the market still being higher than the demand in SPF, and the decline is consistent with what our last report showed for the “year to date” numbers. The difference between supply and demand is shrinking due to the increase in sales transactions, which should lead to price stabilization if the trend continues.

 

This increase in number of transactions can be likely attributed in part to the first time homebuyer $8000 tax credit that is set to expire on November 30, 2009. Many first time homebuyers decided to make a purchase this year due to this incentive. Also, mortgage financing became less restrictive than a year ago during the worst of the financial market challenges. Also, very low interest rates in the 2nd and 3rd quarters of 2009, helped improve affordability and purchasing power of buyers.

 

Congress is currently debating whether or not to extend/expand the first time homebuyer tax credit, and this decision will likely have a sizable affect on the residential real estate market. If they extend or expand the credit, sales are likely to remain strong. If the credit expires, it may cause a short term slowdown in sales activity until more job creation spurs more home purchases.

 

Sean Carroll is Team Leader of “Team Carroll” at RE/MAX Classic Group, and can be reached via phone at 908-376-1569, by email at Sean@TeamCarrollNJ.com,  or via the web at www.TeamCarrollNJ.com.