Home prices rose in nearly all major U.S. cities in April from March, according to the latest S&P/Case-Shiller Home Price Indices report. But experts disagree on whether we have — finally, after six years of decline — seen the market’s bottom.
“It has been a long time since we enjoyed such broad-based gains,” David Blitzer, chairman of S&P Indices’ index committee, said in that report. “While one month does not make a trend … [the news] is a good sign.”
However, Robert Shiller, co-creator of the S&P/Case Shiller index, was less convinced than some that it was a definitive sign prices have stabilized, saying in an interview with Reuters Insider that while it was encouraging it is still too soon to tell. The article quoted Shiller as saying: “They’ve been falling for six years now, and people have been asking me this question for six years, and there’s always this sense that it’s about to turn up.”
Of course, all real estate is hyperlocal. What are Baristaville real estate agents seeing? We asked two, one based in Montclair and the other in South Orange/Maplewood.
Montclair is showing definite signs of stabilization and even modest appreciation. Between the 2003-era prices, interest rates below 4% and pent up buyer demand, Montclair houses are moving quickly – especially when they are priced right. Last week a house listed in the 500-600 range had 10 offers, going under contract for well over the asking price. Montclair housing inventory is down 30 % from June of last year (140 on the market this June vs 200 last June) and demand is up creating a situation that is ripe for multiple offers; With only 3 months of inventory available it has become a seller’s market in Montclair. Still, homes that are overpriced will not sell and unrealistic sellers will be waiting years before prices are back to their 2006 peak levels.
We are having a really good year so far. In the combined towns of Maplewood and South Orange, we have had 180 closed sales thru June 26 v. 166 through the same period last year. That represents approximately 8.5% more sales this year. Average Days on Market is trending 63 days to sell, down from 75 days to sell in 2011. This represents an improvement of 16%.
And, as I often see, 31% of the homes sold thus far have sold for final asking price or greater. This means 30% of the homes have probably had a bidding war or multiple interest. We have also seen an improvement in the ratio of overall price paid v. final asking price, 96.3% in 2012 year-to-date and 95.9% in 2011. Also great news is that we have another 152 homes Under Contract at this stage and that represents a substantial increase over the trend last year.
The only curious figure is that average prices paid so far this year is $463.6K vs $503K in 2011. While this could be construed as a continuing weakness in the market, I would prefer to think this is a quirk in the game of statistics (flipping a coin should be 50 heads-50 tails, but often is askew early in the counting), when you pull up the details we had a 33% increase in the number of homes listed for under $300K this year vs last year and we had a decrease in the over million $ homes—more importantly a substantial decrease in the average listing price for the homes listed over $1.0M as last year they represented a total value of $5.6M and this year they only totaled $3.7M (this changes the average price paid by an average of $12,000/home).