Time flys by! It`s October now and the Phillies are in the playoffs again, trying to get to the World Series and Eagles fans in South Jersey are feeling hope and joy, wishing the Birds reach and win a Superbowl this season!
The leaves are turning and starting to fall from the trees at a faster pace now each week.
As season`s change, so do real estate markets, and this one we experienced the last 2 year has been unique for me in my 47 years of being a realtor. Higher mortgage rates, along with elevated sales prices and a lack of housing inventory, have continued to impact market activity during the recent summer homebuying season.
The average 30-year fixed-rate mortgage has remained above 6.5% since May, to around 7.25% now in September and October, and recently look at these helpful recent national statistics ending in August this year:
The real estate market nationally hitting a two-decade high in August, according to Freddie Mac. As a result, existing-home sales have continued to slow nationwide, dropping 2.2% month-over-month as of last measure, with sales down 16.6% compared to the same time last year, according to the National Association of REALTORS® (NAR). Single Family Closed Sales were down 33.0 percent to 4,965. Townhouse-Condo Closed Sales were down 37.5 percent to 1,544. Adult Communities Closed Sales were down 24.9 percent to 555. Single Family Median Sales Price increased 13.0 percent to $565,000. Townhouse-Condo Median Sales Price increased 21.9 percent to $414,500. Adult Communities Median Sales Price increased 7.9 percent to $356,000. Falling home sales have done little to cool home prices by the end of August 2023, however, which have continued to sit at record high levels nationally thanks to a limited supply of homes for sale.
According to National Association of Realtors, there were 1.11 million homes for sale heading into August, 14.6% fewer homes than the same period last year, for a 3.3 months’ supply at the current sales pace. The shortage of homes for sale has boosted competition for available properties and is driving sales prices higher, with NAR reporting a national median existing-home price of $406,700, a 1.9% increase from last year of the same time.
September has seen a slight slow down with the recent rate increases in certain market segments, but the demand is still strong on the mainland areas of Atlantic County, Cape May and Cumberland County for homes in good condition in the price range of $425,000 and below. The second home market has slowed down in the beach communities in the $600,000 and over market. I notice homes that need paint, repairs, are not selling as fast as they were one year ago, actually taken three times longer to sell in certain towns. So if your thinking of selling soon, pricing your home soon to sell on the market, listing at the correct price is very critical.
Real estate has to be look at locally too, not just national stats. Here are some local stats to help, which are provided from the New Jersey Association of Realtors ending in August 2023 compared to same time last year in August 2022.
Atlantic County– Single family homes–New listings–down 23.5% Closed sales-down 23.2%, Median Sales price up 2.1% from $328,000 to $335,000. The big winner in the last year were homeowners selling in 55 plus communities–new lisitings were up 38.1 % and the demand to buy was strong with a 39.9% increase. Median sales price there rose from $297,000 to $320,800 up 8%. With condos and townhouses in Atlantic County the inventory was down 15.5% from last year but the average sales price rose to $202,000 that is up 13.8%. So limited quality of homes for sale, keeps the prices up.
Cape May County- Single family homes–New listings–down 17.6% Closed sales–down 14.4%, Days on the market until sold increased 43.2%, however median sales price rose 8.6% to $499,450.00.
Condos-Townhouses down 11.8% and again due to low inventory the average median sales price rose up 1.2% to $612,500. 55 plus-adult community sales are up 7.4 %.
Cumberland County- Single family homes– New listings–down 22.4% and closed sales down 22% because of smaller inventory, median sales price is up 2.9% despite the interest rates rising to $226,450.00. The Townhouse-Condo market here had a 30.1% positive increase in the median sold price year to date to $203,000. Adult community sales jumped up 34.7% more with a median sales price of $184,500. Happy to say as well, that our HomeSmart office will have a branch office soon on Landis Ave in Vineland, NJ opening.
USDA allows for $0 down payment in rural areas. They have expanded their eligible areas to include Absecon, Brigantine, all of Egg Harbor Township. The income limit is $115,150 for 1-4 person family and $152k for 5+ person family.
Also on the subject of buy downs vs. paying more points? Rates on a 2-1 buydown today would be 7.25%, so in year 1 you would pay 5.25% and in year 2 you would pay 6.25%. However, Jim mentions “money needs to be put aside at closing via seller concession or from the buyer for the money not paid during those years. Typically, I prefer the buyer pays points, if they are going to stay in the home for more than 7 years instead, so that the rate stays lower for a much longer period, they whole length of the 15 to 30 year term.”
Bottom line is with the fall season here and pumpkins appearing more and leaves falling now, homes are still moving well for sellers, but it is important to use stats that are current to help you set realistic pricing for the most net results to you. Buyers have some new programs that may help, and as inventory slowly increases, things will improve for buyers.
Have a great fall season everyone and Happy October 1st!
Gary Simmens– Broker/Associate/Manager
HomeSmart First Advantage Realty
13 NJ Office locations–Direct/Cell: 609-338-1339