From The Allison Ziefert Real Estate Group
This silly dog photo may look just like my dachshund Archie, but it’s not him. And you may be wondering why I would select this for an article on real estate. Well, this is emblematic of the mood of buyers right now in our market. They are burned out from COVID and the stress of months of trying to compete against multiple other bidders for the same properties. And they are looking to kick back and enjoy the summer.
Since May of 2020, we have experienced not just a seller’s market but an extreme one. Last year, we had almost no seasonality to our market — with barely a summer or holiday slowdown at all. You may have seen homes in your neighborhood selling for huge percentages over list price.
This year the typical August slow down came early. Very abruptly, just after Memorial Day Weekend and coinciding with the relaxing of COVID restrictions in NYC, we noticed a significant change. Houses are not necessarily selling in one weekend. Houses are not necessarily selling with tens of offers but maybe just one or a handful. Houses are not necessarily selling over list price. Price reductions, which had been a rarity post pandemic, are now back.
Why? So many buyers are focused elsewhere — on doing the things and seeing the people that they were not able to until now. They are traveling, socializing, and seeing friends and family. At the same time, sellers who were not comfortable last year going to look for new homes or having buyers through their properties are now ready to sell. And this means more inventory and less competition for that inventory.
The numbers tell the story. Absorption rates, months of available inventory for sale on the market, have ticked up in lots of our towns. For example, in mid April the inventory level in Maplewood was .6 months of inventory. At the end of June it was 1.2 months. In South Orange, in mid April the inventory level was .6 months and at the end of June it was 1.1 months. Same thing in Millburn/Short Hills with a jump to 1.7 months up from 1 month in the same time period. Montclair jumped from .7 months to 1.3 months in the same period as well.
Taking a step back, we are still at a very high point in the market and still in a seller’s market. Inventory may have doubled but less than 2 months of inventory is still extremely low, with a balanced market being 4-6 months of inventory. Appreciation rates at these numbers could be 15-20% annually,
Average sales prices are still very high. Take a look at the average sales price in Maplewood and how it has increased steadily since 2009:
So, for now the frenzy seems to be over. The Fall market may bring buyers back to focusing on real estate, but for now August has come early to our local market. If buying or selling in the area is on your mind, let’s discuss your plans and the current market further. Email me at email@example.com to arrange a time to talk.
The Allison Ziefert Real Estate Group is a top producing real estate team based at Compass in Short Hills, NJ. We are local market experts, specializing in real estate and homes in Maplewood, South Orange, Millburn/Short Hills, Montclair, West Orange, NJ.