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.

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.

Summit is among my favorite towns.  I graduated from Summit’s Kent Place School, and my office now is within walking distance of this wonderful girl’s prep school.   Happily I have not gone far except for a short post-college detour in NYC.  I love Summit, and here are my top personal reasons it remains home.

• Downtown Summit & Convenience:  Over the last 20 years I have marveled as Summit’s downtown evolved.  Today there are numerous first class restaurants, boutique shops like John Hyatt and Plumquin, national franchises like Jacadi or J.Mclaughlin and sidewalk cafes like Pizza Vita.  What a contrast from my early Kent Place days – last week, for example, I enjoyed a dinner at the award winning Roots Steakhouse, followed by a movie, and then a post-show frozen yogurt at Red Mango.  No doubt Summit offers all the conveniences of a larger urban area, but amidst the tranquility of a town of just 21,500. And with Midtown Direct Train service into Manhattan, the commute is just 35 minutes (15 minutes to Newark Airport).  And finally, don’t tell my husband, but my commute is five minutes away…the Short Hills Mall – home to The Apple Store, Neiman Marcus, Vineyard Vines and Hermes.

• Farmer’s Market:  Summit’s Downtown areas hosts a Farmer’s Market on Sundays from the Spring to Fall.  As a foodie, I appreciate fresh local produce and products.  This is a ritual for me.  One can wander among the stalls, and marvel at the cornucopia of fresh vegetables, including the best Jersey tomatoes and corn, just caught seafood and home baked pies. The scallops from Shore Catch, Barnegat Bay, NJ are as sweet as candy  – I buy them weekly.  I often run into neighbors and friends as we stock up for the week.  Dogs are welcome, so its a great place to show off your cute furry family members.

• Superb Schools:  Summit boasts one of the finest public school systems in New Jersey, with some surveys placing it within the top ten.  Supplementing the public school system is a network of outstanding private preparatory schools not far away, including the local Kent Place, Oak Knoll, and Oratory and not far Newark Academy, Delbarton and Pingry.  I graduated from Kent Place and my partner, Howard Bunn, from Pingry.  Nearly 100% of their graduates continue to college, with many matriculating at Princeton, Yale, Duke and other top universities.  (Fun fact: Charlie Gibson’s wife, Arlene Gibson, served as Kent Places’ headmistress for many years before being named the head at Spence in NYC).  And after school activities are endless, ranging from the competitive swimming program ‘Summit Seals’ at the YMCA to ballet and lacrosse.  The Visual Arts Center of NJ is an amazing resource for art classes. While I’m now an empty nester, when my children were younger my second “job” was afternoon chauffeur.  The good news: you don’t have to go to far for excellent programs.

• Recreation:  Summit’s public recreational facilities include a beautiful Par 3 municipal golf course, soccer, football and baseball fields, paddle and tennis courts and even an aquatic center. The list of Summit provided activities for people of all ages is exhaustive.  My husband and I enjoy teeing it up at nearby private golf clubs, Baltusrol and Canoe Brook, two of the finest golf links in the US.  And did I mention ice hockey? The Beacon Hill Club offers an ice hockey program second to none.  So good that I have known people who commute from NYC to Beacon Hill Club for this reason alone.  And across the street from Beacon Hill is the Reeves-Reed Arboretum, a spectacular formal gardens on the National Register of Historic Places.  Keller Williams held its Holiday Party last year in the Arboretum’s old stone house, truly a memorable charming and festive setting.  Did I mention hot yoga, spinning…as you see, I could go on.

• Charming Neighborhoods & Residences:  Of course Summit’s enormous charm comes from its neighborhoods and homes.  Summit is one of the most affluent towns in suburban New Jersey, and enjoys quiet, leafy, and wide streets.  Homes include some of the grandest, rambling Victorians – to Colonial, and Arts & Crafts style residences along Summit’s prestigious Northside neighborhood.  But there are also smaller, but abundantly charming homes near Soldiers Memorial Park and elsewhere.   And for those who can’t quit Summit when its time to retire and downscale – there are a limited number of upscale apartments close to downtown attracting seniors on Euclid Avenue and Summit Place.  My Mother-in-law, Dorthy Moxley, loves her Euclid Avenue three bedroom, and we love having her close.

No doubt Summit is aptly named….there is no more appealing place to live.