Basking Ridge Real Estate Market Update: Absorption Rates

Basking Ridge's Absorption Rates continue to show positive signs for the local market. Currently, if your home is valued under $1 Million, there is between 4-6 months of supply on the market giving current consumption rates - not bad compared to other areas in the country. Analysts target this range as an indicator of a healthy stable market.

Does this mean the prices are going to stop declining? No, probably not. We have to look at the underlying market statistics to see why. While pending sales were up for April, both locally and nationally, local market stats show them retreating in May - we will see how the national numbers look in a few weeks. Further, Closed Sales continue to lag behind the pace set over the last couple of years. Through May of this year, 90 houses have sold compared to 167 a year ago and 171 homes in '06 during the same time frame. What has been the greatest stabilizing factor in Basking Ridge's Real Estate Market has been the slow down of houses coming on the market. By this time last year, 395 new listings had come on the market - 449 in '06; compared to 328 new listings this year. Having less houses enter the market helps greatly; but prices won't stop declining until consumption increases. But overall, the health of the market appears to be improving!

Where's the Living Room?

Say good bye to the room with all of the nice furniture that rarely gets use. You know, the room with the plastic slipcovers on the sofa; OK, no one uses those anymore, but you understand the point. According to a National Association of Home Builders (NAHB) survey, over half of the respondents believe that by the year 2015, average size homes (2,300 sq ft) will be constructed sans living room. Further, upscale homes, 4,000 sq ft, will have a smaller space than the current living room functioning as a parlor or music room instead.

So, what do you do if you currently own a four bedroom center hall colonial and are not utilizing the living room. Change it. We are starting to see individuals use the space as a library or music room as a way to enjoy their hobbies and interests. Don't be afraid to experiment with the space; it doesn't have to store the nice furniture in plastic casing.

Why Now is the Time to Buy a House!

Buy a house now, you must be crazy. Don't you know that home prices are going to keep falling, I wouldn't buy now. Many people would respond to you that way if you told them "Now is a great time to buy a house."

As Realtors, Chantal & I get strange looks all the time when we are talking to people about how now is a great buying opportunity. Plenty of supply, lower prices, and low mortgage rates create what could be one of the best buying opportunities to present itself in the last decade. Gone are the days where you better have pen in hand when you saw a house you liked, because... there is another showing later in the day. Current supply allows buyers an opportunity to view many homes and weigh their options; making the best choice for them. Currently, home prices in Basking Ridge are off about 12%-15% from their peak levels. Mortgage Rates, while not at their lowest levels, are at historically low levels. This adds up to a tremendous opportunity!

But aren't Home prices forecasted to continue to fall? Yes, they are. But, it might not be in your best interest to wait. While home prices should continue to decline, mortgage rates are forecasted to increase at a rate that will negate, the forecasted price declines. In fact, by waiting for those lower home prices, higher mortgage rates may cause you to pay more for your house in the long run than buying in today's market environment.

Basking Ridge Real Estate Market Update: May Home Sales

Home Sales in Basking Ridge improved in May. 23 units closed during May, up from 21 units in April. The Basking Ridge Market though, continues to lag behind the previous year's paces. Sales totals from the previous 3 years for the month of May all were greater; 37 in '05, 44 in '06, and 49 in '07.