First of all, the most amazing statistic to begin with is that half of 2012 is gone. So much has occurred this year whether it be the return of most of our troops, the volatile stock market, your children graduating their respective schools, the Giants winning the Super Bowl, the Devils losing the Stanley Cup, and Linsanity, as well as the upcoming presidential election.
The real estate market has found a revival. Based on statistics from the Garden State Multiple Listing Service, prices are up in three of four categories in Madison, for the first six months of the year compared to January to June of last year. The average asking price of active listings (those that were listed or still listed) is up 8 percent ($945,862 vs. $876,914); average asking price of new listings (the newest listings for the six months) is up 10 percent ($923,933 vs. $838,377); average asking price of under contract listings (those that were placed under contract during the time period) was down slightly 1.4 percent ($710,157 vs. $720,822); and sold and closed listings sale prices are up 9 percent ($732,333 vs.$670,270). The list price to sold ratio remains the same at 96 percent, which has been a stable number for years.
Conversely, but certainly indicative of the market throughout the state, and resulting in the price increase, Madison inventory is down by 15 percent in active listings year to year and 8 percent in new listings in the same time period. Whereas homes under contract are up 15 percent with 26 less days on the market at 56; and sold and closed homes up by just 5 percent and 74 days on the market, also down from the same time period in 2011.
What does all this mean? Economics 101–supply and demand. When there is less of anything available, the price goes up. The perception is the market is improving and without a doubt it is. The true statistic to live by is the solds and closed with the under contract as the secondary. Prices are up in Madison by 5 percent at an average of $732,333. Under contracts are at asking prices of $710,157 which based on the aforementioned 96 percent rule will close at an average of $681,750. Combining that with the closed sales will relate to an average price at $707,042. Still up from last year but closer to 6 percent and fairly significant. This also represents that homes in the 700-750 price range are selling and most of them are four bedroom homes.
What does the rest of the year look like? This summer has been busier than last which is a great indicator for the balance of the year in most years. However this year as history tells us, may differ–it is a presidential election year. I have gone through several since I began in 1985, once the real political push begins, the market stagnates as people play the wait and see game.
The other factor, which will only be a factor if the banks allow it to, is the shadow inventory quagmire. New Jersey is number one in a foreclosure inventory (65 months worth) if the banks decided to release the homes for sale. Hopefully, the banks would be smart enough to keep them from the market or release them in small increments.
Overall, the Madison market is alive and well; and moving forward and as real estate moves forward so does the rest of the economy. So keep those buyers and sellers coming.