Since May of 2020, we 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 have 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 sellers 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 and in all of our towns 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 protected] 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 and the surrounding towns. We are driven by earning great testimonials and referral business from happy clients. You can read our testimonials here.