The real estate market in Hillsborough in December continued to show some signs of recovery, though not as strong as Somerset County overall.  The supply/demand ratio was about the same as December 2008, when the market was heading into the dumps; January of 2009 was a disaster in terms of sales.  December of 2009 saw a market that was tentatively climbing back.  The absorption rate was identical to December 2008 - 9.5 months.  These two indexes bottomed out big time in January of 2009, when the absorption rate reached 20.6 months.

For the year, Hillsborough experienced a nearly 18% drop in the number of properties closed, the greatest decline year-to-year, and the lowest number of sales I've seen in Hillsborough in many years.  This came as the average sale price declined just 3.3%, fueled by more sales in the lower price levels helped by the tax credit.  Early this month, however, the middle price range, from $500,000 to $750,000, showed great vigor with 41 actives and 10 pendings, stronger than the under $300K and the $300,000 to $500,000.  The upper middle ($750,000-1,000,000) had 21 actives and no pendings, and there were six million dollar plus homes on the market and just two pending.  In a sense, the sweet spot in the Hillsborough market is the middle, benefiting most likely from those moving up from the lower ranges due to the new extended and expanded tax credit.

It is too early to predict what will happen in 2010 in this small market, but signs indicate that we have reached bottom in terms of volume and prices.  January will be interesting....

 What started out as a declining market with no real glimmer of hope, after some real ugliness ended up on an encouraging note, as mentioned yesterday in this space.  Two very big numbers stand out.

One, the number of sales closed in 2009 compared to 2008.  In Somerset County in 2008 2795 transactions closed, bottoming out from the 5073 of 2004.  In 2009 3061 sales closed - a 9.5% increase over the preceding year (but still 40% off the peak).  Much of that increase could be attributed to the tax credit, but December closed sales (after the original tax credit was to have expired) were up 24% over December 2008, suggesting a more "organic" improvement.

This improvement was not without its price, literally.  The average sale price from 2008 to 2009 declined 5.6%.  That was the price of the increased sales volume.  Early in the year prices were generally regarded as down about 7% over the preceding year, but that number improved by the third quarter.  If you go back to the "premier bubble year" of 2005, you'll see that the average sale price in Somerset County was $502,259 for the year.  This last year's average of $439,328 is "just" 12.5% off that peak year (if it was your $63,000 you lost, although a paper loss that's not "just").

Homes still sold for an average of 96% of list price and on average in less than three months,  but keep in mind that this means that only when a house is priced within 4% of market value will it sell. 

The year 2010 holds great promise, and if you're thinking about buying or selling real estate, this is the time to "get a move on."  That's a pun.  Call me or email me and have market knowledge help you realize your real estate objectives.

Located in the center of New Jersey, Somerset County market activity in December continued the trend toward an improving market, with many numbers significantly better than December 2008.  Keep this report handy as other sources will be talking about December numbers for a couple of months to come.  Really.

The supply/demand ratio (the ratio of new sales to new listings) rose from 65% in November to 70% in December.   That  means for every 100 new listings 70 listings sold (It had been as low as 30% in 2009).  The absorption rate increased very slightly from 8.9 to 9.0 months; a year ago it was at 11.4 months.  Even though the number of listings taken was virtually identical to November 2008 (230 vs. 232), increased sales have led to lower inventory numbers.  In fact, inventory on January 1, 2010 was the lowest since January 2006. The number of sales made this year in December was more than 15% higher than December 2008. 

Month to month declines in the supply/demand ratio and increased absorption rates are expected as a seasonal phenomenon this time of year, so comparisons to the comparable month last year has greater value than the month to month for this year.

The market in Somerset County has obviously turned the corner, since there have been five consecutive months of better sales numbers than in the same months in 2008, starting in July.  Although individual towns in Somerset County may not have experienced such dramatic improvements - all real estate is local - the general trend is definitely upward.  Watch this space for information on individual towns this week.