Short Hills and Millburn NJ: 4th Q Home Sales

For the first nine months of 2011, the Short Hills and Millburn market marched ahead of 2010, with closings up by 10% along with average prices.  But the harsh weather and volatile financial markets conspired to create a cautious 4th Q end to the year.  We believe the numbers confirm that the 4th Q  is an outlier.   Howard and I take comfort that 2012 has started strong – and just this week we are announcing two new listings.

Here’s what we faced last Fall:  a minor August earthquake, a September hurricane, and the finale,  an October snow storm – thankfully so far no locusts.  Meanwhile,  financial markets suffered from the potential Eurozone break-up and the downgrading of US debt.  We also lost power, a blackout which lasted days and even darkened our Keller Williams office on Chatham Road.

So how did this show up in the numbers.  We believe the full force of the disruption is evident in the October and November numbers.  Home sale closings in Millburn-Short Hills declined nearly 50% in the 4th quarter, dropping from 56 to just 30.  In November there were just seven closings, the lowest activity level in more than five years.  And here is a chart which shows the decline from 2010 levels:

And in tandem with the pause in sales, Months of Home Inventory as well as Days on the Market rose appreciably from prior year levels:

Given the few data points, drawing price trends is difficult.  But with the data available, it appears home prices softened slightly in the 4th quarter.  Last year, 4th quarter selling prices averaged $1,000,000;  this year 4th Q prices averaged $930,000  (we excluded November’s anomalous and sparse data).

Here’s the positive.   The early quarter sale price numbers exceeded the previous year, and  only after the weather calamities did the price numbers soften.  And optimistically, after the build in inventory in October and November, the inventory number declined sharply and ended the year in line with past years – at approximately 5 months.

Again, the good news is that this weather anomaly is confirmed by recent activity at Keller Williams.  As we mentioned, we are announcing two great listings this week,  and both traffic and inquiry is up.

For your further review, we have uploaded onto our website (www.bunnmoxleyhomes.com) an analysis of every home sold in Millburn-Short Hills in the 4th Quarter of 2011.  We find it useful to look at activity during a quarter, rather than a month.  As we have pointed out above, home data is lumpy, and a few sales in one month versus another do not make a trend.  But with interest rates on a 30 year mortgage below 4 percent, with the 10 year Treasury hovering around 2%, and with home inventory at lower levels, we remain quite constructive on the market.

This analysis presents the highlights.  We have run the data in many ways:  by homes over one million, by bedroom, and by neighborhood.  Reach out to us if you want to see a different data slice.  We would be happy to provide it to you.

Summit NJ: 4th Q Home Sales

Summit’s home market started the quarter slowly, but improved by December.  Let us take you through our analysis.

Following Wall Street’s September market meltdown and the Euro fiasco, the level of nervousness at the start of the quarter was high.  Many felt they had lived through the 2008 movie, and no one wanted a sequel.

Predictably, October and November transactions declined sharply from the prior year.  In October closings fell from 13 to just 7, and in November, from 26 to 15.  And Days on the Market almost doubled from prior year levels.  Activity indeed slowed from promising earlier year results.  These two charts show this trend well:

But despite obvious market concerns, Average Original List and Average Sale Prices were just slightly lower for the quarter.  And then these same prices rebounded strongly in December.  Indeed, in the last month of 2011, 7 homes sold for more than $1 million versus 5 in the prior year.  The average sale price increased by 18%, an astounding number, although on a short time frame with limited data points.  But check out these two graphs, which suggest underlying housing strength:

And if this emerging December trend continues, as we suspect it will, keep an eye on home inventory.  At Bunn Moxley Homes of Keller Williams we believe the approaching year end focused many minds, whether for tax reasons or otherwise:  over half the homes sold in December had been on the market for longer than 150 days.  Buyers and Sellers that heretofore were unable to agree on price, finally transacted.  And while the List Price/Sale Price ratio dipped below 90%, the clearing price level improved over last year (indeed, up 18% in December).

We have uploaded onto our website (www.bunnmoxleyhomes.com) our analysis of every home sold in Summit in the 4th Quarter.  We find it useful to look at activity during a quarter, rather than a month.  Home data is lumpy, and a few sales in one month versus another do not make a trend.  But with interest rates on the 30 year below 4 percent, and a 10 Yr Treasury hovering around 2%, and with home inventory at its lowest level in three years, we remain quite constructive on the market.

Understand that this market snapshot hits just the highlights.  We have examined the data in many different ways, by luxury price, by bedroom and by neighborhood.  Free free to reach out to us if you want to see a different data slice of the market, or to understand our perspective.