According to the National Association of Realtors (NAR): Existing-home sales1, which are completed transactions that include single-family, townhomes, condominiums and co-ops, increased 3.7 percent to a seasonally adjusted annual rate of 5.10 million in March from an upwardly revised 4.92 million in February, but are 6.3 percent below the 5.44 million pace in March 2010. Sales were at elevated levels from March through June of 2010 in response to the home buyer tax credit.
Graphs property of FORTUNE!
Shawn Tully, editor-at-large for FORTUNE Magazine offered this optimistic and powerful argument why now is an excellent time to invest in real estate. Tully opens his argument by introducing us to Mike Castleman, the founder and CEO of a company called Metrostudy. What Metrostudy does, and does well, is collect the number of homes that are vacant and for sale in each city, and the number of months it takes to sell all of them.
Today Castleman is witnessing an extraordinary reversal of the new-home glut that helped sink prices just a few years ago. In the 41 cities Metrostudy covers, a total of 78,000 houses are now either vacant and for sale, or under construction. That’s less than one-fourth of the 343,000 units in those two categories at the peak of the frenzy in mid-2006, and well below the level of a decade ago. “If we had anything like normal levels of buying, those houses would sell in 2½ months,” says Castleman. “We’d see an incredible shortage. And that’s where we’re heading.”
Sinking Fast or Still Afloat?
Would it surprise you if we told you that Ocean County’s Waterfront Home Market is 39 sales ahead of the same time last year (Jan. 1st through March 31st)? What if we told you that even as sales of Waterfront Homes increased this year, the Months Supply of Waterfront Homes has remained steady at just over 21 months? Now, what if we SHOWED you that the Average Sales Price of Waterfront Homes in Ocean County fell from $659,495 in March of last year to $422,419 in March of 2011?
73% vs. 12%
Toms River Real Estate-1st Quarter 2011
This chart displays the sales and inventory of Single Family Homes in Toms River, NJ. The high-lighted area focuses on the first quarter of 2011. As we can see, sales dropped in February before spiking in March but the supply of homes for sale spiked in February and dropped in March (despite the current inventory increasing by over 120 homes)! Both of these factors could be attributed to March traditionally marking the beginning of the “Spring Selling Season”, when we historically see more homes come on the market in anticipation of more buyers entering the market, and January being the “snowiest” month in New Jersey in over 60 years.
Notice the significant differences in the high-lighted areas between February and March of 2010; sales shot up while inventory dropped! This is because we were entering the last 2 months of the “Extended Home-Buyer Tax Credit” here in Toms River. So, with the Federal Government offering up to $8,000 to home-buyers at this time last year, Toms River is only 12 sales behind, year-over-year. Why?
This chart illustrates the four distinct “types” of home-buyers that were active in Toms River during the First Quarter:
In a nutshell; without the artificial demand created by the “Extended Home-Buyer Tax Credit”, home prices have depreciated to levels that have made them attractive to investor buyers (short sales/foreclosures), first time home-buyers, move up buyers and high end buyers alike. Combined with slowly but steadily climbing mortgage interest rates, home-buyers may be jumping off that proverbial fence in Toms River, NJ.
Adult Communities in Ocean County-1st Quarter
This chart displays the sales and inventory of Homes in all of the Adult Communities in Ocean County, NJ. The high-lighted area focuses on the first quarter of 2011. As we can see, sales dipped in February but rebounded strongly in March. Both of these factors could be attributed to a “snowier” than usual January in 2011. The most significant factor to observe is the “Months Inventory”, which SOLD OFF 3 months worth of supply of homes in one single month (March)!
Ocean County's Adult Communities-1st Quarter of 2010
Notice the major differences, between this year and last, are the number of sales in January of this year (137 over 115) and the HUGE DIP in the “Months Inventory” in March of last year. The latter is because we were entering the last 2 months of the “Extended Home-Buyer Tax Credit” here in Ocean County. So, even with the Federal Government offering between $6,500 and $8,000 to home-buyers of Adult Communities at this time last year, Ocean County is 29 sales ahead of last year! Why?
Profile of Sold/Closed Homes in Adult Communities
As we can easily see, there was a SURGE in sales UNDER $100,000 in the Adult Communities of Ocean County in the first quarter of 2011! There were also significant increases in sales between $350,000 and $450,000.
In a nutshell; without the artificial demand created by the “Extended Home-Buyer Tax Credit”, home prices in the Adult Communities have depreciated to levels that have made them attractive to two “distinct” classes of retirees. Remember, beginning January 1, 2011; 10,000 “Baby Boomers” turn 65 each and every day, and will do so for the next 19 years! Obviously, they are finding what they want, need and can AFFORD in the Adult Communities of Ocean County, NJ.
First Quarter of 2011 in Ocean County
This chart displays the sales and inventory of Single Family Homes in Ocean County, NJ. The high-lighted area focuses on the first quarter of 2011. As we can see, sales have steadily increased month-over-month but the supply of homes for sale has remained relatively stable at just over 19 months. Both of these factors could be attributed to March traditionally marking the beginning of the “Spring Selling Season”; when we historically see more homes come on the market in anticipation of more buyers entering the market.
The First Quarter of 2010 in Ocean County
Notice the significant differences in the high-lighted area between February and March of 2010; sales shot up while inventory dropped! This is because we were entering the last 2 months of the “Extended Home-Buyer Tax Credit” here in Ocean County. So, with the Federal Government offering up to $8,000 to home-buyers at this time last year, Ocean County is only 24 sales behind, year-over-year. Why?
Sold/Closed (Year over Year) Ocean County
As we can plainly see, the most active price ranges (between $100,000 and $500,000), saw the most significant changes in the $100,000 to $149,999 and $150,000 to $199,999 price ranges; +54% and +23% respectively.
In a nutshell; without the artificial demand created by the “Extended Home-Buyer Tax Credit”, home prices have depreciated to levels that have made them attractive to investor buyers (short sales/foreclosures) and first time home-buyers alike. Combined with slowly but steadily climbing mortgage interest rates, home-buyers may be jumping off that proverbial fence in Ocean County, NJ.
