The final numbers for Hillsborough, New Jersey real estate sales in 2008 are finally in.  Hillsborough, after six continuous years of increases in value, saw the market take back a bit - about 3.3%.  In 2007 the average sale price was $393,017.  In 2008 the average sale price was $380,067.  The median sale price in 2008 was $345,000.  That compares to a median sale price in 2007 of $348,000.

What did $345,000 buy in Hillsborough in 2008?  Specifically, a fifty-year-old ranch with three bedrooms and a finished basement.  There were two full baths, one of them in the basement.  There was a single garage, and the kitchen had been updated with granite counters, new cabinets and stainless steel appliances.  The home was situated on about half and acre of level land, with city water and sewer.

Values increased in Hillsborough from 2002 to 2007.  The average sale price in 2002 was $273,227, and in 2007 $393,017.  I'll do the math for you: 44% increase.  The market took back 3.3% in 2008.  Did your stocks do as well/poorly?

What's ahead for Hillsborough?  A lot depends on the mindset and courage of the buyers out there right now.  With interest rates the lowest in half a century, and prices in this area probably as low as they will go, we should see increasing numbers of buyers jump in by next month.

December, the last month in a challenging year, in Hillsborough had some definite positives.  Because just a few more sellers put their homes on the market than buyers were buying, the supply/demand ratio leaped to 91% (a good thing, suggesting a market in balance), the highest in years.  Unfortunately, the number of buyers (20) was the lowest monthly total in several years, but just three below the last two Decembers.

The absorption rate fell to 9.5 months, from 11 in November.  This is a good thing, but it hasn't fallen enough.  We need to see an absorption rate at about six months for a market truly to be in balance.  Right now, it still favors the buyers.  The number of homes available on January 1 was just 190, the lowest since May of 2006.  That includes about two dozen new construction homes, all priced over $600,000.  This is illustrated by the fact that the average list price of new listings in December was $426,241, while the average list price of homes that went under contract in December was $292,005. 

The jury is still out as to what 2009 will bring in the way of real estate activity.  Watch this space for my analysis of the entire last year - average sale prices, etc. 

Despite our most fervant hopes, the December real estate market in Somerset County did not experience a Christmas miracle.  We did see some indication of normalcy as the supply/demand ratio climbed to it highest level of the year, as it has done in preceding years - a seasonal occurence.  This occurs when prospective sellers decided to hold off until the "spring market," (thereby missing well-qualified and motivated buyers) while buyers take advantage of bargains to be had, and this year, mortgage rates at near-record lows. 

The number of sales closed in December was 210, compared to 216 in December 2007, but the damage had been done earlier, so there was a total of 3070 properties closed for the whole year, compared to 3986 in 2007.  The average sale price in 2007 was $499,769, in 2008 $471,743, a decline of 5%.  The median sale price also fell about 5%, from $385,000 in 2007 to $365,900 in 2008. 

This gloomy report has a silver lining. The absorption rate actually improved over November, closing out at 11.4 months, compared to 12.7 in November, and 11.6 in December 2007. 

What did other communities in Somerset County experience?  And what is my prognostication for 2009?  Stay tuned....