We are now 1 month into the new year, and compared to January of 2009, this year so far has been much more active in terms of buyer activity in the marketplace. One year ago, we were right in the thick of bank takeovers, massive Wall Street layoffs, and an unprecedented government stimulus package, part of which broadened and extended a first time homebuyer tax credit, which helped our local market tremendously in the 2nd through 4th quarters.
This year, while we are still battling 10% unemployment, and the effects of a deep recession, the real estate market in Westfield has shown signs that the bottom has passed, and sales remain steady or slightly improved year over year, but at lower prices on average. However, sales of starter homes ($500,000 and under) are selling extremely fast and have actually increased in price slightly in the past 6 months. When priced right, these homes are selling quickly and often with multiple offers, and this has led to a gradual loosening of the market in the upper ranges since people are starting to "move up" again if their jobs and income are secure.
Here is a summary of the year over year comparison of 2008 to 2009 in the Westfield NJ Real Estate Market.
2008
Closed Sales: 288
New Listings: 1446
Average Sales Price: $773,745
Average Days on Market: 76
Sale Price to List Price Ratio: 96 percent
2009
Closed Sales: 305 (an increase of 6 percent year over year)
**New Listings: 2542 (an increase of 75 percent from prior year)**
Average Sales Price: $693,463 (a decrease of 10 percent year over year)
Average Days on Market: 67
Sale Price to List Price Ratio: 96 percent
When examining these numbers, it is easy to see why the average sales price dropped 10 percent, as there was a surge in new listings on the market, especially in the first and second quarter, most likely attributed to the job losses in the financial sector in New York City, as many Westfield homeowners are employed by those institutions, and may have needed to sell their home due to job loss or relocation. As the year progressed, sales increased, and new listings slowed, which balanced the market somewhat, but not before prices dropped 10 percent.
What's Going to Happen in 2010?
No one really knows for sure. All signs point to a very slow recovery, and most likely a flat year for prices and sales. Prices should remain stable, and show slight seasonal increases or decreases, if the data trends hold.
The first time homebuyer tax credit is set to expire at the end of the 2nd quarter. If December sales were any indication, the sales of starter homes at the end of 2010 should decline, as buyers rush to get under contract before then, as they did in November of 2009 when the prior credit was originally set to expire. If the first time homebuyers don't buy at the same rate as they have been, either due to the credit expiring, or rising interest rates, there will likely be a slowdown in how quickly the unsold inventory gets scooped up. This will stifle price appreciation in the short term.
If jobs are created more rapidly, and interest rates stay favorable, one would expect homes to sell at a faster clip, demand to pick up, and prices to rise gradually. Only time will tell.
Sean Carroll is Realtor and Team Leader of Team Carroll at RE/MAX Supreme. To reach Sean for comment or questions, or for more information about the Westfield NJ Housing Market, or local real estate information, logon to www.TeamCarrollNJ.com. Or contact Sean at Sean@TeamCarrollNJ.com